Implications of the Introduction of Class Action Lawsuits

Beginning March 1, 2012, companies doing business in Mexico started to face the risk of class action lawsuits in Mexican federal courts. In accordance with legislative amendments, private parties, government entities and certain NGOs are now able to bring environmental claims as collective lawsuits. “Class Actions allow communities comprised of 30 people or more to bring a collective action against any party that is causing or has caused environmental harm,” says Federico Ruanova Guinea, Environmental Practice Group Coordinator at Baker & McKenzie. “This means that if a community, for example an ejido, has reason to believe that a company is causing harm to the environment, contaminating the water, diminishing air quality or polluting soils, it may bring this type of civil action in order to seek corrective actions, meaning that a judge would be asking to correct the harm caused by restoring the affected area to what existed prior to the harm being caused.” Ruanova Guinea explains that, nowadays, any organization or party can file a class action lawsuit against an entity they believe is harming the environment because, in contrast to what occurred in the past, they do not need to prove that they are being directly affected by the actions of such entity.

“The premise for a collective action lawsuit to be filed is that there has to be evidence of actual harm caused, resulting from an action or an omission on the part of an individual or entity that is generating environmental harm. There are, of course, other legal recourses that parties can initiate prior to an activity taking place. For example, they can object to or appeal an environmental permit. It has been established in our legal system for a long time that if a company secures an environmental impact authorization, any third party that believes there is the potential for environmental damage, can in fact file a recourse contesting an authorization,” he adds. Given that class actions are usually very expensive, time consuming and entail bad publicity for a defendant, Ruanova Guinea advices companies to always be in full compliance with applicable laws and regulations.