In the Official Daily of the Federation of August 20, 2011, various amendments to the following regulations were published: (i) the Federal Code of Civil Procedure, (ii) the Federal Civil Code, (iii) the Federal Antitrust Law, (iv) the Federal Consumer Protection Law, (v) the Organic Law of the Judiciary of the Federation, (vi) the General Law on Ecological Balance and Ecological Protection, and (vii) the National Commission for the Protection and Defense of Financial Services Users, with the purpose of including in such legislation the concept of the “Class Action Suit”.
These Class Actions make reference to the Class Action rights that have existed in the United States of America for many years and that empower one person or a small group of persons to present, before the courts, the interests of a much larger group with the goal of obtaining a judgment or damages against a person, corporation or other entity.
In this regard, the amendments referred to above were implemented at a Federal level pursuant to the above mentioned laws, which are related to the following legal subjects:
- Consumer protection;
- Ecologic balance;
- Protection and defense of the consumers of financial services; and,
- Economic Competition.
Within these amendments, three types of Class Actions were established:
1. The Diffuse Action (Acción Difusa) which consists of the right held by an indeterminate class to claim damages before a court for harm suffered by the class, consisting in either the restitution of the physical items damaged to their original state before the harm suffered or other damages in satisfaction of the rights or interests of the class, regardless of the existence of a previously existing legal obligation between the class and the tortfeasor.
2. The Class Action, stricto sensu, functions to protect the interests of the class that is either a defined or determinable class, sharing a common circumstance and with the goal of obtaining a judgment against the tortfeasor, including the reparation of the harm incurred consisting in the performance of one or more actions or an injunction against the performance of the same, including the individual restitution of damages to each individual member of the class. Contrary to the Diffuse Action, the Class Action, stricto sensu, requires a previously existing legal obligation between the class and the tortfeasor.
3. Finally, the Individual Homogenous Class Action (Acción Individual Homogénea) exists to preserve individual rights and interests raised individually but also pertaining to a larger group, with common interests, with the purpose of obtaining the specific performance of a contract or its nullification, with all the consequences and full effect of the applicable law.
As one can see, the range of entities, topics, and categories who may join a Class Action is very broad, as it goes so far as to provide a group that feels itself harmed and which finds itself without any easily determinable common linkage with the legal right to raise a claim in the name of a class; including an individual and concrete action when said action has many incidences, as well as allowing for the more literal Class Actions where the class is determined, or easily determinable, to initiate a legal claim against a tortfeasor for various causes of action for which the class feels an action is warranted.
Who may claim? The following are specifically allowed to exercise the rights conferred on a class:
On behalf of the authorities:
a) The Office of the Federal Attorney General for Consumer Protection,
b) The Office of the Federal Attorney General of Environmental Protection,
c) The National Commission for the Protection and Defense of Users of Financial Services,
d) The Federal Competition Commission, and
e) The Attorney General of Mexico.
On behalf of the classes:
a) The common representative of the class formed by at least thirty members, and
b) Civil organizations, constituted at least one year prior to the raising of the Class Action in question, that has within its authority the ability to promote and defend the interests of which the class is concerned, and which are duly registered before the Federal Judiciary Council.
The requirements necessary for a Class Action Suit are:
a) That it involves actions that bring harm to consumers, enjoyers of property, consumers of public or private services, the environment, or actions harming consumers as a result of illegal uncompetitive concentrations by corporations or economic agents or for monopolistic practices, and
b) That there exists a correlation between the purpose of the action sought and the harm suffered by the class.
The proceedings that are initiated under these new rules will provide the tortfeasor with 15 days to answer and there shall be an meeting of the parties to reach an agreement; failure to do so will result in the initiation of a legal proceeding, upon the conclusion of which the court will issue its judgment.
The judgments may be of the following different types:
a) In Diffuse Actions, the judge may only order that the tortfeasor provide restitution for the damage suffered by the class, and
b) In the case of Class Actions, strictu sensu, and in those brought individually, the judge may order the tortfeasor to provide restitution for the damage suffered or as the case may be, cover the individual harms of the members of the class.
These modifications also allow for the following other judicial remedies in any of the three types of Class Action Suits, to be requested of a court:
a) Injunction order to stop the acts or activities that are causing or have caused either an imminent or irreparable harm upon the class.
b) An order of specific performance of acts or activities whose omission has or will cause either an imminent or irreparable harm upon the community, and
c) The removal from the market or the securing of instruments, assets, copies and products directly related to the irreparable harm that has been or will be suffered by the class.
In conclusion, the Class Actions have a different nature than those regulations which are currently available under Mexican Law. Under the new Class Action legislation the same cause of action may be brought by one single class of persons. As has been the case in the United States of America, these types of actions gain a certain amount of strength which transcend into the political realm to the detriment of tortfeasors.
At Jáuregui y Del Valle, S.C., we have a team of professionals well versed in U.S. Law, knowledgeable in U.S. Class Action Suits, which enables us to lend professional legal services to our present and future clients, in these types of actions which we believe will increase in relevancy in the future.
1 Pursuant the modifications made to the Federal Code of Civil Procedure, a class is understood as consisting of at least thirty people whose individual interests have been affected by the activity, act or omission by an economic agent, corporation, person or authority.
2 A determined or easily determinable class for purposes of joining in a Class Action can be, for example, the members of an association, or an ejido.
3 The “Individual Homogenous” Class Action has a different meaning that that of a Diffuse Class or a Class Action, stricto senso. An example of an Individual Homogenous Class Action would be one where an airline ticket holder raises an action on behalf of her fellow ticketholders for a cancelled flight.