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Newsletter. Litigation on Covid 19 Lockdown. Mexico

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Newsletter. Litigation on Covid 19 Lockdown. Mexico

  1. 1. More information: jorge.dehoyos@dha.mx rolando.escalante@dha.mx jaleyna.delapena@dha.mx Ciudad de México Guadalajara Tijuana Mexicali Los Cabos www.dha.mx MEXICAN FEDERAL COURT ORDERS THE RE-OPENING OF SUPPLIERS TO ESSENTIAL BUSINESSES Covid 19 Taskforce 1. On March 31, 2020, as a measure intended to mitigate the spread of the COVID-19, the Mexican Federal Government ordered the temporary shut-down of all businesses deemed non- essential to the national economy. In the event of the health contingency caused by the SARS-CoV2 virus, 2. The administrative order issued by the Secretary of Health Secretary included a list of all the sectors of industry, commerce and services that it considered essential, and could therefore continue to operate, provided that all health measures were followed. 3. The list of essential businesses include, among others, the food industry, medical, paramedical, medical equipment, hazardous waste disposal, cleaning and sanitation, financial services, distribution and energy supply, gas stations and gas, potable water, soft drinks, food markets, sale of prepared food; transportation of passengers and cargo; agricultural production, fishing, livestock, food industry, chemical industry, cleaning products, hardware stores, courier services. 4. All businesses and industries not included in the list issued by the Health Secretary must suspend all operations during the health emergency. 5. The order issued by the Secretary of Health has a grey area. It did not provide clarity with regards to businesses that were deemed “non-essential”, but that are indispensable for the operation of businesses that are. The order, as issued, creates uncertainty among key suppliers and companies that are part of the supply chain of "essential" businesses. 6. In the State of Mexico, the Chief of Sanitary Regulation of the Institute of Health, in a measure meant to enforce the order issued by the Federal Government, imposed a shut-down order, paralyzing the operation of a pallets manufacturer. Pallets are indispensable for the massive distribution of food in the national territory. 7. The DHA team requested that a federal court review the administrative decree on behalf of the company, and that it issue an order allowing for the immediate opening. The core argument of the federal complaint was that key suppliers of "essential" businesses should also be allowed to operate so that essential businesses can continue to operate.
  2. 2. More information: jorge.dehoyos@dha.mx rolando.escalante@dha.mx jaleyna.delapena@dha.mx Ciudad de México Guadalajara Tijuana Mexicali Los Cabos www.dha.mx 8. The Sixteenth District Judge for the State of Mexico, sitting in Naucalpan de Juárez, allowed the complaint to proceed expeditiously, and ordered the immediate lifting of the shut-down order pending a final determination of the issues. 9. In the judge’s opinion: " the activity performed by the [petitioner] is to be considered as essential, because it is an extension of said food industry, because it is a supplier of operations intended to complete the supply chain for essential goods (agricultural products, foodstuff, medicines, medical equipment), a major source of platform services to move goods within the supply chain so these can reach the supermarket chains and/or the end consumer." 10. The above criteria sets an important precedent for other companies that are part of the supply chain in several essential activities. The reopening of the company was achieved by the litigation team led by Jorge E. de Hoyos , Rolando Escalante and Jaleyna de la Peña, partners of the firm.

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