One BIG Step Gets All Closer Toward Class Actions in Mexico

6 10 2010

 

SCtMX

The Suprema Corte de Justicia, Mexico's highest court and head of the Federal Judiciary. Federal courts would have exclusive jurisdiction for class actions in MX.

 

Special thanks to  good  friend & colleague Cecilia Ibarra  for bringing the topic to my attention


42 words. Congress in Mexico amended article 17 of the Federal Constitution (CPEUM, Constitución Política de los Estados Unidos Mexicanos) by adding just 42 words. But the — hopefully positive — impact can be enormous: it sets the stage for the introduction of class actions — denominated acciones colectivas or collective actions, per its literal translation — in federal courts of the country.

Class actions — or Collective actions are “lawsuit[s] filed by one or more people on behalf of themselves and a larger group of people “who are similarly situated,”” as defined by LAW.COM Dictionary.

The amendment, published in the Official Gazette (DOF, Diario Oficial de la Federación) on July 29, 2010, entered into force the day after, and gives Congress one year from the latter date to enact implementing legislation that make class actions practicable in Mexico. The added paragraph reads:

El Congreso de la Unión expedirá las leyes que regulen las acciones colectivas. Tales leyes determinarán las materias de aplicación, los procedimientos judiciales y los mecanismos de reparación del daño. Los jueces federales conocerán de forma exclusiva sobre estos procedimientos y mecanismos.

[Free translation: “Congress will pass laws regulating collective actions. Such laws will determine the subject–matter in which collective actions will apply, the court proceedings and mechanisms for payment of damages. Federal judges will have exclusive jurisdiction over this proceedings and mechanisms.”]

The constitutional amendment gives exclusive jurisdiction for class actions to the federal judiciary. Main reasons could be uniformity in the process, and the fact that the Federal Judiciary Branch has by far more resources than any or all of the local courts.

The practice of law in Mexico may change with a new niche. Lawyers in MX will probably turn to their North–of–the–Border colleagues for inspiration and example. Implementing legislation would probably touch on attorney’s fees and related issues; I would not be surprised if they even go to the detail of capping contingency fees.

A probable side effect of the change is that American courts may be more willing to dismiss a case before them based in forum non conveniens motions by defendants, now that Mexican courts would be able to offer an additional remedy that will be familiar to the U.S. judges — even though not applicable to the instant case entertained by the American court.

Success or failure of class actions in Mexico will depend in good measure on the amendments to the Federal Code of Civil Procedure and all secondary legislation by Congress. One of the main challenges for the Mexican judiciary on the issue will be to have an effective case management infrastructure to deal with class actions with potentially thousand of case members acting in a case.

New opportunities will come for plaintiffs and attorneys. We will keep an eye on it.

To think list:

  • Congress decided to vest exclusive jurisdiction for class actions in Mexico on Federal judges — presumably District Judges. States are purposely left out, probably for uniformity’s sake and better resources by the Federal Judiciary.
  • The practice of law in Mexico may change with a new practice niche.
  • Will MX Congress mirror US Class Action legislation when implementing the constitutional amendment? If so, which one?
  • One of the main challenges for the Mexican judiciary on the issue will be to have an effective case management infrastructure to deal with class actions with potentially thousand of case members acting in a case.
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