Covington & Burling LLP

11/29/2023 | News release | Distributed by Public on 11/30/2023 18:51

Recent Developments in Mexico’s Supreme Court

Key Points

  • Mexico's Supreme Court ("SCJN") has decided or will decide on the fate of key policies promoted by President López Obrador.
  • Lacking a super majority in Congress to amend the Constitution, López Obrador has seen several of his legislative bills declared unconstitutional, like an overhaul of the electoral system, while others are still pending full review by the SCJN, such as the Electric Power Industry Law.
  • Open confrontation between the President and the SCJN has become more evident this year. A slate of candidates summited early November by the President to fill an open seat in the SCJN heralds closer alignment with Morena-the President's party-and reflects how the SCJN is central for cementing the future of López Obrador's self-described "Fourth Transformation of Mexico."
  • The composition of the SCJN will play a decisive role well beyond the end of the López Obrador administration (September 2024) in areas that are critical for the overall business climate, such as energy, tax policy, antitrust, the role of the armed forces in public security, telecom, cybersecurity and artificial intelligence regulation, among others.

López Obrador and the SCJN

On November 7, 2023, the former President of Mexico's SCJN, Arturo Zaldívar resigned prematurely, a year before the end of his term and after serving in the Court for 14 years. The day after his resignation, Mr. Zaldívar joined the campaign of López Obrador's favored candidate to succeed him as president, Claudia Sheinbaum. Mr. Zaldívar's resignation caused a political uproar and was widely perceived as a move that allows López Obrador to get a new SCJN Minister for a full new term. The Constitution only permits ministers to resign for "serious reasons," and it is expected that Zaldívar will have a prominent role in a future Morena administration, including that of Attorney General after the two-year cool-off period required by the Constitution.

Out of 11 magistrates on the SCJN, four have entered the bench during López Obrador's tenure, following Senate confirmation: Juan Luis González Alcántara y Carrancá (12/2018), Yasmín Esquivel Mossa (03/2019), Ana Margarita Ríos Farjat (12/2019), and Loretta Ortiz Ahlf (12/2021). This new vacancy in the Court allows the President to nominate a fifth Supreme Court minister, who will serve for a 15-year term.

The President accepted Zaldívar's resignation and, on November 15, 2023, sent to the Senate his slate of candidates to replace him. The candidates are all women who currently work in his administration, are members of his Morena party and are aligned to his political ideology and government program. Two of them are also related to important members of the party (one is the sister of the Interior Minister and the other is the sister of the Major of Mexico City).

Opposition parties have voiced strong criticism of the candidates presented by López Obrador, making Senate confirmation difficult. The Senate has 30 days to confirm one of the candidates. If it does not, López Obrador must submit a second slate, kicking off a second 30-day period. If the Senate again rejects the slate, the President will be able to choose the new magistrate without Senate confirmation.

López Obrador will end his administration having chosen at least five SCJN ministers. His successor, who will take office in October 2024, will be able to nominate, during his/her six-year term, at least three additional ministers. The SCJN needs eight votes to declare laws unconstitutional and four to block them on other grounds.

Zaldívar's resignation could also bring changes to the composition of the Supreme Court's two chambers. One of the ministers aligned with López Obrador has requested to move from the Second Chamber, which usually handles cases regarding labor and administrative law, to the First Chamber, which deals with civil and criminal law cases.

As mentioned earlier, tensions between the SCJN and the President increased over the past year. The SCJN's current President, Norma Piña in particular, and the SCJN in general, have faced continuous public criticism from López Obrador in his daily morning press conferences, where he frequently questions their decisions. López Obrador has said the SCJN "serves de interest of elites and oligarchs and is independent but only from the people who they serve."

The government's pressure on the SCJN has also taken the form of budget cuts. Last month, Mexico's Congress voted to terminate 13 trusts held for the Judiciary (worth some US$820 million), and have those funds assigned to the Executive. The SCJN claims the elimination of the trusts will affect workers in the Judiciary, pointing to their pensions and other social security benefits.

The President has publicly advocated for ministers, magistrates and judges of the Judiciary to be elected by citizens. López Obrador intends to send to Congress a constitutional reform to the Judicial System to be voted in his lame-duck session during September of 2024. Importantly, Morena's presumptive candidate Claudia Sheinbaum has publicly supported the President's proposal.

The June 2024 election will not only decide the next president, but also the 628 seats that make up the Mexican Congress. The President is focused on Morena's obtaining the qualified majority necessary to carry out constitutional reforms. López Obrador continues to enjoy a high acceptance rate of around 60 percent, while Sheinbaum leads in the polls. The SCJN's decisions and Morena's lack of a congressional supermajority to undertake constitutional reforms have been critical counterweights to the policies of the López Obrador administration. Next year's election and a reconfiguration of the SCJN's composition may change these conditions. Monitoring new developments will prove critical to any new business development strategy in Mexico.