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14 decisions

Mexico

Jan 13, 2021

Vap Labs v. Mexico

Vap Labs asked the Federal Commission for Protection Against Health Risks (COFEPRIS) about the requirements needed to import and commercialize electronic cigarettes (e-cigarettes). COFEPRIS responded that the commercialization of e-cigarettes was banned under the scope of Article 16(vi) of the General Law on Tobacco Control, which states: “It is prohibited to trade, sell, distribute, display, promote or produce any object that is not a tobacco product which contains some of the brand elements or any type of design or auditory sign that identifies it with tobacco products.” Vap Labs filed an Amparo action based on alleged violations of constitutional principles. The District Court agreed and ordered COFEPRIS to authorize the importation, sale and marketing of e-cigarettes in Mexico. The COFEPRIS and the Chamber of Deputies of the Congress of Mexico requested the revision of the District Court's decision. They argued that the District Court decision should be void since the import and commercialization ban incorporated in Article 16(vi) does not violate the Mexican Constitution; Article 16(vi) instead establishes reasonable and proportionate restrictions on the exercise of Vap Labs economic freedom. The Supreme Court of Justice for the Second Chamber agreed and ordered the District Court's decision revocation and amendment, declaring Art. 16(vi) constitutional. This is the fifth decision on this issue of the Second chamber. Similar to a previous case, the Court distinguished between systems that operate exclusively with tobacco and those that do not. The Supreme Court of Justice for the Second Chamber clarified that Article 16(vi)’s ban applied only to e-cigarettes, and not to heated tobacco products as these were tobacco products. This ruling applies only to the plaintiff who was a party to this case. See also Saborn Hermanos Sociedad Anonima v. Mexico, 853/2019, Mexican Supreme Court (2020).

Mexico

Nov 25, 2020

Saborn Hermanos Sociedad Anonima v. Mexico

Saborn Hermanos Sociedad Anónima, a chain of cafés, asked the Federal Commission for Protection Against Health Risks (COFEPRIS) about the requirements needed to manufacture, import, and commercialize electronic cigarettes (e-cigarettes). COFEPRIS responded that the commercialization of e-cigarettes was banned under the scope of Article 16(vi) of the General Law on Tobacco Control, which states: “It is prohibited to trade, sell, distribute, display, promote or produce any object that is not a tobacco product which contains some of the brand elements or any type of design or auditory sign that identifies it with tobacco products.” Saborn filed an Amparo action alleging a violation of the principles of equality and non-discrimination. The District Court agreed and declared Article 16(vi) contrary to the Political Constitution. However, the COFEPRIS and the Chamber of Deputies of the Congress argued before the Supreme Court of Justice for the Second Chamber that Article 16(vi) establishes reasonable and proportionate restrictions on the exercise of Saborn’s economic freedom. The Supreme Court of Justice for the Second Chamber agreed and ordered the District Court's decision revoked.  This is the fourth decision regarding this issue in the Second chamber, but this marked the first time that the Supreme Court of Justice for the Second Chamber declared Art. 16(vi) constitutional. However, it distinguished between systems that operate exclusively with tobacco and those that do not. The Supreme Court of Justice for the Second Chamber clarified that Article 16(vi)’s ban applied only to e-cigarettes, and not to heated tobacco products as these were tobacco products. This ruling applies only to the plaintiff who was a party to this case.

Mexico

Oct 2, 2019

[Unnamed Actor] v. México

An agent from the Federal Commission for the Protection Against Sanitary Risks (COFEPRIS) confiscated electronic cigarettes from the plaintiff under Article 16(VI) of the General Law on Tobacco Control, which states: "It is prohibited to trade, sell, distribute, display, promote or produce any object that is not a tobacco product which contains some of the brand elements or any type of design or auditory sign that identifies it with tobacco products." The plaintiff filed an Amparo action challenging the interpretation of Article 16. The Ministers of the Second Chamber of the Supreme Court of Justice of the Nation (SCJN) decided unanimously that it is unconstitutional to ban the sale of electronic cigarettes while, on the other hand, the sale of tobacco products is allowed in Mexico. The Court considered that even though the law seeks to protect the right to health, this cannot be done at the cost of an excessive affectation of other goods and rights. The Ministers agreed that prohibiting the sale of electronic cigarettes while the sale of tobacco products is allowed violates the right to equality, and that the measure is not the least restrictive to guarantee other constitutionally protected rights. As a result, they revoked the order from COFEPRIS and ordered the return of the seized goods to the plaintiff.

This ruling applies only to the plaintiff who was a party to this case. However, if the same court issues five judgments with identical holdings, the decision would be binding nationally. This is the third such decision by the Second Chamber.

Mexico

Jul 2, 2019

Jaunait Consulting v. México

The Supreme Court of Justice of the Nation (SCJN) determined that electronic cigarettes cannot be banned under the interpretation of Article 16(VI) of the General Law on Tobacco Control, which states: "It is prohibited to trade, sell, distribute, display, promote or produce any object that is not a tobacco product which contains some of the brand elements or any type of design or auditory sign that identifies it with tobacco products." The Court found that this interpretation is unconstitutional since (i) the sale of tobacco products is allowed, and (ii) banning non-tobacco products without a proper justification violates the principles of equality, legality, proportionality, and non-discrimination.

This ruling applies only to the plaintiff who was a party to this case, Juanait Consulting. However, if the same court issues five judgments with identical holdings, the decision would be binding nationally. This is the first such decision by the First Chamber.

Mexico

Nov 15, 2017

Vapeadores de México v. México

Vapeadores de México asked the Federal Commission for the Protection Against Sanitary Risks (COFEPRIS) to whether the import, distribution, and sale of e-cigarettes and e-liquids required the issuance of an authorization or license and/or health permit and what requirements must be met. COFEPRIS responded that the General Law on Tobacco Control does not contemplate that and that the importation and sale of those products are banned under the scope of Article 16(VI), which states: "It is prohibited to trade, sell, distribute, display, promote or produce any object that is not a tobacco product, that contains some of the brand elements or any type of design or auditory sign that identifies it with tobacco products." Unhappy with the response, Vapeadores de México filed an Amparo action alleging violations of the constitutional principles of equality, legality, and non-discrimination.

The Ministers of the Second Chamber of the Supreme Court of Justice of the Nation (SCJN) decided in unanimity that it is unconstitutional to ban the sale of electronic cigarettes while, on the other hand, the sale of tobacco products is allowed in Mexico. The Court upheld previous courts' decisions, considering that even though the law seeks to protect the right to health, this cannot be done at the cost of an excessive affectation of other goods and rights. The Ministers agreed that prohibiting the sale of these products in order to protect public health and the environment violates the right to equality and the proportionality principle since, at the same time, the sale of tobacco products is allowed.

This ruling applies only to the plaintiff who was a party to this case, Vapeadores de México. However, if the same court issues five judgments with identical holdings, the decision would be binding nationally. This is the second such decision by the Second Chamber.

Mexico

Oct 2, 2015

Neri, José Armando Contreras v. Mexico

In 2012, the Federal Commission for the Protection Against Sanitary Risks (COFEPRIS) imposed a fine of more than 60 thousand pesos on a retailer who offered electronic cigarettes in a commercial establishment. Unhappy with the sanction, seller José Armando Contreras Neri filed a lawsuit challenging Article 16 of the General Law on Tobacco Control which states: "It is prohibited to trade, sell, distribute, display, promote or produce any object that is not a tobacco product which contains some of the brand elements or any type of design or auditory sign that identifies it with tobacco products."

The Supreme Court of Justice of the Nation (SCJN) determined that the sale of products related to tobacco, such as electronic cigarettes, cannot be prohibited. The Court reasoned that despite the fact that the law seeks to protect health, this cannot be done at the cost of an excessive affectation of other goods and rights. The Ministers agreed that prohibiting the sale of these products to protect public health and the environment violates the right to equality, since at the same time the sale of tobacco is allowed. Thus, they revoked the judgment that prohibited the retailer from selling electronic cigarettes and the fine imposed by COFEPRIS. The seller may continue with the offer of electronic cigarettes as long as it does so in accordance with the laws that regulate the sale of conventional cigarettes.

This ruling applies only to the plaintiff who was a party to this case, José Armando Contreras Neri. However, if the same court issues five judgments with identical holdings, the decision would be binding nationally. This is the first such decision by the Second Chamber.

Mexico

Mar 28, 2011

Balderas Woolrich v. Mexico

The plaintiff, a Mexican national, presented an appeal for legal protection, arguing that 1) certain modifications and derogations of the General Health Law (Ley General de Salud) in favor of tobacco consumption constitute a violation of the constitutional right to health and of the American Convention on Human Rights and 2) the present  tobacco control law, General Law for Tobacco Control (Ley General para el Control del Tabaco), does not establish sufficient protections for the right to health and does not comply with the minimum levels of protection required by the Framework Convention on Tobacco Control. Although the Court determined that the claims do affect the legal interest of the plaintiff and recognized the right to health, the Court dismissed the case on procedural grounds. 

Mexico

Jun 29, 2009

Winsa S.A. v. Mexico

A Mexican food establishment, Winsa, filed an appeal for legal protection, claiming the Law Regulating Commerce in the Federal District (Ley para el Funcionamiento de Establecimientos Mercantiles en el Distrito Federal) was unconstitutional and violated the Mexican Constitution, which guarantees the right to equal protection. The articles at issue mandate that places selling food and drinks to the public for local consumption must be free of all tobacco smoke.  The Court held that since these articles applied to all commercial establishments and there was no discrimination, the articles were not in violation of the Constitution.

Mexico

Jun 29, 2009

Hamdan Amad, Faudi, et al. v. Mexico

The plaintiffs, a group of Mexican citizens, presented an appeal for legal protection claiming that, as persons addicted to smoking, the smoke-free laws violated their constitutional rights by making all closed public spaces smoke-free. The Court dismissed the claim finding that the plaintiffs' addiction to tobacco did not justify their smoking in closed public spaces and that they had the freedom to smoke in other spaces.

Mexico

Jan 29, 2009

Operadora de Centros de Espectáculos, S.A. de C.V. v. Mexico

The plaintiff, an entertainment firm, requested an appeal for legal protection against a clause in a law on commercial establishments, which prohibits the sale of tobacco in entertainment venues. The plaintiff claimed this provision violated the right to commerce. The Court found that the law did violate the right to commerce because the limitation violated the principle of proportionality and necessity.  

Mexico

Sep 28, 2008

Comercial Hotelera Mexicana de Occidente, S.A. v. Mexico

The plaintiff, Comercial Hotelera Mexicana de Occidente, S.A. de C.V., a Mexican hotel chain, filed an appeal for legal protection against Article 10(XV) of the Law for the Operation of Commercial Establishments in the Federal District (Ley para el Funcionamiento de Establecimientos Mercantiles del Distrito Federal), a clause that prohibits the sale of tobacco and all its derivatives in commercial establishments in both the hotel and restaurant industry. The plaintiff argued that this clause violated the right to commerce found in Article 7 of the Mexican Constitution. The Court found that the law did violate the right to commerce because the prohibition only applies to a few commercial establishments.  Because the law did not regulate any other industries, the Court concluded that the law was discriminatory and constituted an unjustifiable and inefficient means of decreasing tobacco consumption. 

Mexico

Dec 20, 2004

Televisión Azteca, S.A. de C.V. v. Mexico

The plaintiffs presented an appeal for legal protection, alleging that an article of the General Health Law violated the right to a hearing.  The Ministry of Health had issued this article to regulate the advertisement of tobacco and alcoholic beverages. The Court found that the law had followed the administrative procedures necessary for sanitary control and public health laws, holding that the Ministry of Health is competent to create such a regulation and dismissed the plaintiff's claim. 

Mexico

May 19, 2004

Philip Morris México, S.A. de C.V. v. Mexico

Philip Morris Mexico presented an appeal for legal protection claiming that an advertising regulation exceeded the scope of the originating law.  The law establishes that the Ministry of Health must authorize any advertisement or promotion regarding health-related products, such as alcohol and tobacco. The regulation states that this authorization is necessary not only for tobacco products, but for any products pertaining to a tobacco brand. The Court held that the regulation does not exceed the scope of the law because indirect advertisement and the use of brands can lead to the consumption of products like tobacco that are harmful to people's health. 

Mexico

Dec 16, 2002

Feldman v. Mexico

The claimaint, a US citizen and permanent resident of Mexico, operated a cigarette exporting business from Mexico. He sought damages from Mexico, alleging that various government taxation measures had resulted in a creeping expropriation of his property in contravention of Article 1110 of the North American Free Trade Agreement (NAFTA). The claimant further alleged that Mexico's taxation measures violated NAFTA Articles 1102 (national treatment) and 1105 (minimum level of treatment).

The facts of the case are somewhat convoluted; essentially, at all material times Mexico imposed a tax on the domestic sale and production of cigarettes, but no tax exported cigarettes. Domestic producers and re-sellers of cigarettes were still required to pay the tax, but were entitled to a rebate on export.

Due to industry agreements in the domestic market, the claimant's company was not able to buy cigarettes directly from producers but was forced to purchase them from bulk sellers such as Walmart. The cigarettes purchased by the company included the amount of the domestic tax, but the claimant was not always able to obtain the rebate on export because the invoices it supplied did not separately identify the amount of the tax. This led to a long-running dispute with the Mexican government: at various times the company was paid rebates notwithstanding the deficient invoices; at other times it was not. The law always remained the same but the enforcement of it changed from time to time. Finally, in December 1997, the law was amended to bar rebates to cigarette resellers such as the claimant's company, limiting rebates to the "first sale" in Mexico.

The Tribunal found that Mexico's taxation measures did not result in an indirect expropriation of the claimant's property because, amongst other things, the taxation measures were within the police power of the state: not every business problem experienced by an investor amounts to an expropriation. Further, neither NAFTA nor customary international law required Mexico to permit a "grey market" in cigarettes. The taxation measure could be rationally explained as directed to discouraging smuggling back into Mexico and to maintain high cigarette taxes to discourage smoking.

Notwithstanding that the claimant was unsuccessful on the expropration claim, the Tribunal found in his favor on the national treatment claim. The Tribunal found that there were domestic resellers in like circumstances with the claimant that were accorded more favorable treatment, because they were granted rebates at a time when the claimant was refused them. The claimant was accordingly awarded $9,464,627.50 Mexican pesos in damages, plus interest.

Note that Tribunal Member Mr Jorge Covarrubias Bravo dissented from this decision. The dissenting opinion, the Spanish language version of this decision, and other related decisions, are all uploaded here under "Related Documents".

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