The Schrems II case was halted by the Irish high court in October 2017 so that certain questions could be referred to the Court of Justice of the European Union. Then, in May 2018, the high court finalized and submitted eleven questions to the CJEU. Facebook launched an appeal of the high court’s ruling directly to the Irish Supreme Court (skipping the court of appeals). The Supreme Court decided on the last day of July 2018 that it would hear this appeal.

This case, along with simultaneous efforts by EU institutions to have the U.S. live up to its commitments under the Privacy Shield, have put the flow of cross-border data between the EU and U.S. under the magnifying glass. Given the stakes for companies with revenue streams dependent on monetizing personal data, it is no wonder this case is under such intense focus from many sides.

Facebook, the original defendant in Max Schrems’ push to stop the flow of his personal data to the U.S., was the appellant. The Supreme Court started its judgment on whether to hear the appeal by noting its prior decisions in which it had clearly stated that any Irish court could refer a question to the CJEU for a definitive interpretation of EU law. This would not be considered a decision made by the high court, which under the Irish constitution can be appealed up to the Irish Supreme Court.

As the judgment stated, “A request by a national judge to the Court of Justice for an interpretation of articles of the Treaty [on the Functioning of the EU] is not, in any sense, an appeal to a higher court.” Even if it was to be considered a decision by the high court, “the right of appeal to this Court from such a decision must yield to the primacy of article 177 of the Treaty.” The Court noted the CJEU cases and extrajudicial writings of the president of the CJEU that held there was only a very limited ability within member state courts to appeal a referral to the CJEU as the purpose of the referral was dialogue, which unfettered national court appeals would hinder.

Facebook differentiated this case in that the referral to the CJEU would result in determinations on matters that would then not be appealable within the Irish court system. In its decision, the Court summarized the ten grounds of Facebook’s appeal as being categorizable into four groups. The first had to do with the validity of the referral, with grounds being that the high court was bound by the findings in the Privacy Shield decision by the European Commission on the “adequacy of protections in the context of governmental surveillance,” the impact of the repeal of the Data Protection Directive and start of the General Data Protection Regulation, and the wording of one of the referred questions.

The second group of grounds for appeal was for the high court’s findings on U.S. law, specifically that there is mass indiscriminate processing, that surveillance is legal unless forbidden, the problems with standing, and difficulties with invoking legal remedies. The Supreme Court considered each of these as findings of fact, not law. The third group of grounds related to the inability for EU data subjects to be protected by Article 47 of the Charter of Fundamental Rights of the EU, which gives a right to an effective remedy. The final ground was the high court’s failure to consider evidence affecting its conclusions.

The Supreme Court was unsure to what extent the finding of facts by the high court could impact the ruling by the CJEU. It was unclear how much evidence the CJEU gathered on its own versus what was presented to it in prior cases such as Schrems I, in which the Safe Harbor agreement was overturned. Because the findings of fact could influence the decision of the CJEU, the Court believed Facebook could have a legitimate interest in having it review those findings of fact, limited by the restrictions of such an appeal.

The Court believed that it should grant the appeal in part because, with the interplay between Irish law and CJEU jurisprudence, it was not clear if an appeal should even lay (be possible) and, if so, how limited it should be. Significantly, because the factual findings of the high court would be used by the CJEU in its judgement, these findings of fact would not be appealable within the Irish court system.

Regarding the facts, the Court said, “this Court should proceed on the basis that it is at least arguable that Facebook might be in a position to persuade this Court that some or all of the facts under challenge should be reversed.” The Court then granted Facebook leave to appeal directly to it “on the basis that the legal issues meet the general importance criterion and the factual issues meet the interests of justice requirement.”

The Court noted several other points. First, Facebook must be clear as to what orders it is proposing, as to have the Court reverse some of the questions referred and indeed the referral itself would be contrary to established law. Second, the Court was very clear on the need to reach its own judgment on this matter before the CJEU hearing on the referred questions and as such plans to hold its own hearing before the end of this year. It will then render its judgment in the appeal sometime thereafter.

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