(CN) - After failing to properly study the environmental effects of airport expansion projects, Austria may be liable for decreasing property values, Europe's highest court ruled Thursday.
Austria took over the Vienna airport in 1995 and expanded it several times without ever making environmental impact reports as required by EU law. The airport - often referred to as Schwechat - handled More than 22 million travelers and 244,000 aircraft movements in 2012.
Jutta Leth - who owns a home in the airport's security zone - sued both the federal Austrian government and the state of Lower Austria for $144,000, claiming that increased aircraft noise has decreased her home's value. She also requested a declaration that the governments are liable for any future damages resulting from the illegal expansions.
Austria's Supreme Court asked the Court of Justice of the European Union whether a government's duty to carry out environmental impact reports is intended to protect homeowners like Leth from purely monetary damage caused by projects.
The EU high court concluded Thursday that these matters must be resolved on a case-by-case basis.
"The prevention of pecuniary damage, in so far as that damage is the direct economic consequence of the environmental effects of a public or private project, is covered by the objective of protection pursued by [EU environmental law]," the ruling states. "As such economic damage is a direct consequence of such effects, it must be distinguished from economic damage which does not have its direct source in the environmental effects and which, therefore, is not covered by the objective of protection pursued by that directive, such as, inter alia, certain competitive disadvantages."
While member states are expected to "nullify" violations of the law - in this case, the airport expansions carried out without proper environmental assessment - it is up to the national courts to decide how to fix the situation, the Luxembourg-based court concluded.
"The court has repeatedly held that individuals who have been harmed have a right to reparation if three conditions are met: the rule of European Union law infringed must be intended to confer rights on them; the breach of that rule must be sufficiently serious; and there must be a direct causal link between that breach and the loss or damage sustained by the individuals," the justices wrote. "Those three conditions are necessary and sufficient to found a right in individuals to obtain redress on the basis of European Union law directly, although this does not mean that the member state concerned cannot incur liability under less strict conditions on the basis of national law. It is, in principle, for the national courts to apply the criteria, directly on the basis of European Union law, for establishing the liability of member states for damage caused to individuals by breaches of European Union law, in accordance with the guidelines laid down by the court for the application of those criteria."
The court also noted that EU environmental law does not lay down substantive rules for balancing environmental effects with other factors, though it does require impact assessments for public and private projects. The law furthermore does not prohibit advancing projects that may harm the environment.
"Consequently, it appears that, in accordance with European Union law, the fact that an environmental impact assessment was not carried out ... does not in principle by itself confer on an individual a right to compensation for purely pecuniary damage caused by the decrease in the value of his property as a result of environmental effects," the ruling states. "However, it is ultimately for the national court, which alone has jurisdiction to assess the facts of the dispute before it, to determine whether the requirements of European Union law applicable to the right to compensation, in particular the existence of a direct causal link between the breach alleged and the damage sustained, have been satisfied."
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