## Facts

- Mr Mulder, a Dutch dairy farmer, joined a temporary non-marketing premium scheme introduced under the Common Agricultural Policy (CAP) to reduce milk overproduction.
- Participants halted milk marketing for a defined period and were promised that, on resumption, their quota reference quantities would be calculated on the basis of past production.
- During Mulder’s withdrawal, subsequent CAP regulations amended the calculation method, substantially lowering the reference quantities available to returning producers.
- The change effectively reduced Mulder’s milk quota, prompting him to argue that earlier measures had created a firm expectation that his original quota would be maintained.
- National proceedings led to a reference to the European Court of Justice (ECJ) in Case C-120/86 concerning the compatibility of the amended rules with EU law.

## Issues

1. Whether the amended CAP provisions that diminished Mulder’s quota violated the EU principle of legitimate expectations created by prior regulations.
2. Whether overriding public-interest objectives within the CAP could nevertheless justify the interference with those previously conferred quota rights.

## Decision

- The ECJ held that the principle of legitimate expectations applies to milk-quota schemes under the CAP.
- Farmers who temporarily withdrew from marketing in reliance on earlier regulations were entitled to expect maintenance of their reference quantities on return.
- Community institutions may depart from such assurances only for objective, compelling reasons that are necessary and proportionate to the aim pursued.
- As no adequate justification for the abrupt reduction was demonstrated, the contested measures infringed legal certainty and the legitimate expectations of affected producers.

## Legal Principles

- Legitimate expectations arise when EU institutions give clear, unconditional assurances or follow consistent administrative practice upon which individuals reasonably rely.
- Protection requires lawful reliance and sufficient clarity of the assurance; once established, legal certainty safeguards the resulting rights.
- Even in policy areas susceptible to frequent adjustment, such as the CAP, measures altering vested rights must be proportionate and transparently justified.
- The institution invoking a public-interest objective bears the burden of proving that any derogation from prior assurances is necessary and proportionate.

## Conclusion

The ECJ ruled that CAP producers who relied on earlier quota rules possessed enforceable legitimate expectations; Community measures reducing those quotas without convincing, proportionate justification breached EU principles of legal certainty and fairness.

Mulder (Case C-120/86) [1988] ECR 2321