HOW TO DETERMINE THE JURISDICTION IN A CONTEST IN WHICH THE STATE AND AN INDIVIDUAL ARE INVOLVED, WITH THE LATTER BEING OF CIVIL, COMMERCIAL OR ADMINISTRATIVE NATURE?
The Plenary Session in Civil Matters of the First Circuit, through contradiction of thesis, saw fit to resolve the criterion that should prevail in the legal contests in which a contract for the acquisition of property between the State and an individual is claimed, where to this end there was a discrepancy between criteria on the grounds that a Collegiate Tribunal determined that any dispute that arose between the State and an individual should be an administrative matter, since an administrative act has its own conflict resolution processes in terms of the applicable administrative legislation. The opposing discrepant criterion concluded that although the State, by its own nature, is an administrative entity that should be governed by such Law, it is nonetheless true that it can also be considered as a legal entity on equal terms with private persons, hence, in such matters, the Plenary Session concluded that in order to determine which judicial body has jurisdiction, the following should be considered:
In accordance with the first paragraph of Article 1 of the Organic Law of the Federal Court of Justice for Tax and Administrative Matters (currently Article 1, paragraph 2, of the Organic Law of the Federal Court of Administrative Justice) the aforementioned judicial body is a contentious-administrative court, endowed with full autonomy to issue its judgments, with the organization and powers that the law itself establishes.
The material jurisdiction of the aforementioned court is provided for in Article 14 of the regulation cited in the preceding paragraph (currently Article 3 of the Organic Law of the Federal Court of Administrative Justice).
In accordance with the aforementioned provisions, the now Federal Court of Administrative Justice is authorized to hear, in essence, court cases in which the nullity of definitive resolutions regarding administrative acts or procedures related to the various matters summarized in the sections it contains is claimed, most notably number VII of Article 14 of the previous organic law and Article 3, section VIII, of the new law, with regard to the interpretation and fulfillment of public works contracts, acquisitions, leases and services celebrated by the dependencies and entities of the centralized and state-owned federal public administration, and the productive enterprises of the State, as well as those under the responsibility of the federal public entities when the laws expressly indicate the jurisdiction of the court.
In the case at hand, it should be pointed out that, in accordance with the rules that govern the contentious-administrative action, the fundamental presupposition that must be met by a resolution, act or omission, whose legality is intended to be put into question through a nullity trial brought before the aforementioned administrative court, is that it has originated or provoked a conflict between the centralized and state-ownedl public administration, and the productive enterprises of the State and the governed, in a supra-subordination relationship.
In effect, the State, by means of the legal entity persons, can act with a dual nature, as a public entity or as a private legal entity.
Based on the aforementioned considerations it can be concluded that a contentious-administrative trial constitutes a means of judicial control of the acts or omissions emanating from the entities that make up the state or federal public administration, vested with their supreme authority, that is, as authorities with administrative power in a supra-subordination relationship (superiority) with respect to the governed addressed or affected.
The fundamental presupposition that must fill an act or omission intended to be challenged through a nullity trial heard by the Federal Court of Justice for Tax and Administrative Matters (without prejudice to the subject matter) and now the Federal Court of Administrative Justice, is that the entity of the federal public administration that issued it, has acted with supreme authority, that is, within a supra-subordination relationship with respect to the individual, and not based on a coordination relationship with the latter, in which both parties act on an equal footing, and therefore, they are holders of equal rights and obligations.
That is, the jurisdiction of the aforementioned court is limited to the knowledge of acts of authority issued unilaterally, which materializes when what is questioned is an administrative act, understood as the unilateral and external declaration of will, which expresses a decision of authority in the exercise of public authority, which recognizes, creates, modifies, transmits, declares or extinguishes rights or obligations, in a supra-subordination relationship with respect to the individual.
That said, the Organic Law of the Federal Judicial Power provides for the jurisdiction of the various District Courts. In Article 52, section I, of the aforementioned law it is noted that the District Courts in Administrative Matters will be responsible for hearing disputes arising from the application of federal laws when deciding on the legality or subsistence of an act of authority or a procedure followed by administrative authorities.
In relation to the jurisdiction regulated in Article 52, section I, of the aforementioned law, which refers to acts of authority, the Second Chamber of the Supreme Court of Justice of the Nation issued the jurisprudence published in the Judicial Weekly of the Federation and its Gazette, Ninth Period, Volume 31, January 2010, p. 312, with the following summary:
ADMINISTRATIVE CESSION OF CONTRACTS OF PUBLIC WORKS AND SERVICES RELATED THERETO, AND OF ACQUISITIONS, LEASES AND SERVICES OF THE PUBLIC SECTOR, DECREED BY THE AGENCIES AND ENTITIES OF THE FEDERAL PUBLIC ADMINISTRATION. IT IS CHALLENGEABLE IN A CONTENTIOUS-ADMINISTRATIVE TRIAL BEFORE THE FEDERAL COURT OF JUSTICE FOR TAX AND ADMINISTRATIVE MATTERS.- Article 14, section VII, of the Organic Law of the Federal Court of Justice for Tax and Administrative Matters establishes that this judicial body will hear the trials brought against final decisions, administrative acts and proceedings on administrative matters on interpretation and fulfillment of public works contracts, acquisitions, leases and services held by the agencies and entities of the federal public administration, through a contentious-administrative trial regulated in the Federal Law on Contentious-Administrative Proceedings, therefore it is concluded that the administrative cession of public contracts decreed on the basis of Articles 54 of the Law of Acquisitions, Leases and Services of the Public Sector and 61 of the Law of Public Works and Related Services to the Same, is challengeable in a contentious-administrative trial before the Federal Court of Justice for Tax and Administrative Matters, due to non-compliance; in turn, the final judgment issued in the referred trial may be claimed in direct amparo before a Collegiate Circuit Court, based on Articles 44, 46, 158 and 159 of the Law of Amparo and Article 37, section I, subsection b), of the Organic Law of the Federal Judicial Power, which will exercise a constitutional control over the settled regarding the administrative cession.”
In the executory document from which derived the jurisprudential criterion, the Second Chamber of the Highest Court held that, although it is true that Article 52, section I, of the Organic Law of the Federal Judicial Power grants to District Judges in Administrative Matter a generic attribution to hear trials in which the legality of an administrative act is to be decided, the truth is that there is a special law, namely the Organic Law of the Federal Court of Justice for Tax and Administrative Matters (subsequently enacted) and currently invalid, which provides that the acts of authority issued with supreme authority related to public works contracts must be challenged through a contentious-administrative trial before the Federal Court of Justice for Tax and Administrative Matters (now Federal Court of Administrative Justice).
This criterion is further reinforced by jurisprudence 2a./J. 62/2015 (10th), of the Second Chamber of the Supreme Court of Justice of the Nation, published in the Gazette of the Judicial Weekly of the Federation, Tenth Epoch, Book 18, Volume 2, May 2015, p. 1454, with the following summary:
“PUBLIC WORKS CONTRACTS. IT IS FOR THE FEDERAL COURT OF JUSTICE FOR TAX AND ADMINISTRATIVE MATTERS TO RULE ON THEIR INTERPRETATION AND COMPLIANCE, WHEN ENTERED INTO BY FEDERAL OR MUNICIPAL ENTITIES, THROUGH STATE RESOURCES.”
For its part, it should be noted that the diverse Article 57 of the aforementioned organic legislation provides that the Civil District Courts in Civil Matters will hear civil disputes.
In accordance with the above-mentioned points, when any dispute arising from the interpretation or fulfillment of an administrative contract (such as public works and rendering of services contracts) arises, the first thing to be determined is whether that dispute comes from an act in which the contracting entity made use of some of its supreme authority, or if it comes from some action in which the two contractors were acting on an equal plane.
The importance of taking this fact into account is that, if the dispute comes from the use of a special power, the act of the contracting entity must be considered as coming from authority and it must be challenged through the resources or trials that the applicable laws grant for such purposes.
On the other hand, if the dispute arises from an act in which the contracting parties acted on an equal footing, it may be resolved by means of settlement foreseen for this type of dispute (for example, a civil trial).
Based on the elements previously established, to determine the jurisdiction of the claim against a contract made between the State and an individual, the nature of the action must be taken into account, which can be determined by analyzing the benefits claimed, the events recounted, the evidence provided and the articles supporting the claim, and correspondingly dispense with the analysis of the legal relationship that occurs between the parties, by virtue of the latter being the object to decide the merits of the case.
This criterion is contained in the jurisprudence published in the Appendix to the Judicial Weekly of the Federation 1917-2000, Volume 7, Conflicts over Jurisdiction, p. 296, with the following summary.
“SUBJECT-MATTER JURISDCITION. IT MUST BE DETERMINED TAKING INTO ACCOUNT THE NATURE OF THE ACTION AND NOT THE SUBSTANTIAL JURIDICAL RELATIONSHIP BETWEEN THE PARTIES.-In the Mexican legal system, as a general rule, the jurisdiction by reason of the subject-matter of the judicial bodies is distributed between different courts, which are assigned a specialization, leading to the existence of agrarian, civil, tax, criminal, labor courts, and so on, and, therefore, each one of them must hear matters related to their specialty. If this scenario gives rise to a conflict of jurisdiction, the latter must be resolved solely on the basis of the nature of the action, which, on a regular basis, can be determined through a careful analysis of the benefits claimed, the events recounted, the evidence provided and legal precepts that support the claim, provided this last piece of information is available, since it is obvious that the plaintiff is not obliged to mention it. But, in any case, it is necessary to dispense with the analysis of the substantial legal relationship that links the plaintiff and the defendant, since it constitutes a question related to the merits of the case, which must be decided exclusively by the judicial body and not by the competition court, because if the latter intervenes, it would be prejudging and making use of a power that the law does not confer upon it, given that its decision would bind the judicial bodies in conflict. This way of resolving the subject-matter jurisdiction conflict causes the competent court to retains its jurisdiction unobstructed, in order to resolve what is rightfully applicable.”
That said, it is relevant to determine, based on the nature of the benefits claimed, which must have their origin in a contractual relation, in which reciprocal obligations are agreed upon by the parties when concluding the bilateral contract for the provision of broadcasting services in complementary media, acting on an equal plane, which must be elucidated on the basis of that premise, since there are no elements that lead to assume that the benefits claimed are the result of an authority or administrative act issued by the defendant.
In effect, the disputes that were promoted by legal entities of private law, were not intended to challenge a final decision, administrative act or procedure of this nature, issued by the claimed federal agency in exercise of the legal powers conferred on it, but exclusively to claim the payment of sums of money to which the defendant is allegedly bound by reason of the aforementioned contracts concluded by the parties to the conflict.
Thus, the relevant aspect of the case is the position of the parties in the dispute, essentially as to establish whether the obstinacy, justified or unjustified, to not make the payment claimed, requested from the defendant, has the character of a negative action vested with supreme authority, or, if it is exclusively the breach of a concerted obligation at a coordination level, that is, between equal parts.
The capacity with which a public authority acts against the individuals with whom it contracts, links it to conduct its action in compliance with the law and status with which it assumed a series of obligations and rights contractually, that is, to comply with both the provisions of a public nature, in which their attributions and scope of action are established, as well as the applicable private legal provisions, which also govern its action, since, due to their functions, in certain cases, they must interact at the coordination level with the governed.
Indeed, the State, in order to comply with its public and social functions, is not always in a physical possibility to do it by itself, so when this happens, it is forced to turn to individuals who, as legal entities under private law, are suitable to provide the goods and services required to meet its purposes, which does not imply that the legal relationship established in all cases is one of supra-subordination.
In these cases, when the State makes use of public resources, is not authorized, through its various bodies, to contract with individuals in a discretionary manner, but must do so in accordance with the provisions of number 134, paragraphs 1 and 3, of the Political Constitution of the United Mexican States, for this reason, when the agencies and entities of the federal public administration enter into administrative contracts with individuals, such as those regulated by the Law of Acquisitions, Leases and Services of the Public Sector and the Law on Public Works and Related Services to the Same, as well as the Federal Law on Budget and Treasury Responsibility, they act with a dual nature, that is, as entities of public law and with the capacity of legal entities under private law.
The first due to the fact that in the exercise of the powers and obligations that are legally conferred upon them, they carry out the procedures provided for in the corresponding legislation, to award, generally through public bidding, contracts for the acquisition or lease of goods, services or public works and, as a consequence, enter into agreements or contracts with the awarded party.
It must not be forgotten that the intrinsic nature of the contract is of civil origin, since it is a question of forming a concurrence of wills between the parties, which upon signing them binds them to acquire reciprocal rights and obligations. And additionally, in the case of administrative contracts, given its purpose of public order, the law foresees situations in which the ordinary legislator, given the nature and purpose of the contracting he regulates, considered appropriate to place the contracting agency or public entity at a supra-subordination level with respect to the contractor (individual), and for that purpose he included provisions that in civil law would be considered exorbitant and inequitable, such as, among others, the power of unilateral termination of the contract only in favor of the contracting State organ, and that of terminating it in advance for reasons of public interest, without having to resort to the judicial authorities.
However, it must be considered that the government agency or entity assumes reciprocal obligations against the individual, consisting, mainly, in the payment of the goods acquired, services received or works executed, which, it must carry out regardless of its legal powers. That is to say, it is not obliged due to it being a public entity, but derived from the fact that the payment obligation was agreed upon in a concurrence of wills as consideration for its position. Therefore, if the payment is appropriate because the supplier or contractor punctually complied with what it was obliged, this circumstance is definitely alien to the fact that it is an agency or public entity, as well as the scope of the powers granted to it by the law.
Due to the above, if the public entity incurs a breach of the contract, by refusing to make the payment to which it is bound, its failure to comply with the payment cannot be considered an administrative act of a negative nature, but a mere breach of contract that corresponds to the scope of civil law, regardless of whether the applicable administrative law is in charge of imposing as a sanction the payment of financial expenses, which is an administrative concept, but in the issues that gave rise to the discrepant criteria, the latter is an ancillary obligation to the main one, that is the payment of pesos.
In this scenario, if the defendant, public entity, refused to cover what was agreed in the contract, the breach of that obligation could only be demanded by the creditor via civil proceedings, even though it is an administrative contract, as there is not an administrative legal provision of an adjective nature that grants a specific action in that area (administrative).
The foregoing is so, because the trial before the Federal Court of Justice for Tax and Administrative Matters (now the Federal Court of Administrative Justice), is a control body that regulates the legality of the acts of federal or local authorities when they make use of federal resources; hence, with only one exception, only individuals affected by administrative acts can request that trial.
The aforementioned exception, as a scenario in which an authority is entitled to request a trial before the Federal Court of Justice for Tax and Administrative Matters, is provided for in Article 14, last paragraph, of the Organic Law of the Federal Court of Justice for Tax and Administrative Matters. That provision establishes that the contentious-administrative trial has as an essential objective the annulment of definitive resolutions, administrative acts and procedures performed by federal authorities, in which case those authorities cannot request said judgment, but only when a ruling has been issued in favor of an individual, by means of the mechanism known as lesivity judgment (1). Therefore, a contentious-administrative trial to retrieve payments derived from a contract would not be appropriate, as it does not originate from a resolution issued by the contracting party as a public law entity, but from the breach of a contract for the provision of services, whose acts or abstentions are not susceptible to be claimed by contentious-administrative means.
Thus, the failure to comply with any of the contractual obligations is only a defaulting behavior of the obligated party, which gives rise, when this conduct is incurred by the contracting government entity, to not question it through the federal administrative jurisdiction, but in the field of civil law, through an ordinary civil federal trial, which must be requested before a District Court in Civil Matters, as an instance court.
Then, if in the trials from which the issues that the disputing courts heard, the plaintiff did not demand as a benefit the annulment of a final decision or an administrative act or proceeding of that nature revealed to him, but the payment of an amount of money, derived from the breach of contract, as principal, then, it is not the Federal Court of Justice for Tax and Administrative Matters (currently the Federal Court of Administrative Justice) that should hear the case, but a District Court in Civil Matters in Mexico City.
In addition, the fact that the contract for the provision of broadcasting services in complementary media is underpinned by legislation of an administrative nature (Article 69 of the Federal Budget and Treasury Responsibility Law, Title 4, of the execution of contracts for the provision of professionals services for a fee), and has been held by a federal public administration entity (Ministry of Health), is not sufficient reason to consider that all disputes that arise in connection to its interpretation and compliance should be heard by said administrative court, but, as analyzed, the specific scenario presented in each case must be weighed, in order to determine the nature of the action exercised.
Therefore, this Plenary Session in Civil Matters of the First Circuit considers that the criterion that should prevail in this dispute is that the jurisdiction to hear the relative litigation, with the characteristics presented here, corresponds to a District Judge in Civil Matters in Mexico City, based on the provisions of Article 53, section I, of the Organic Law of the Federal Judicial Power.
Under this analysis, as can be seen from the above, a dispute between a State and an individual should be heard by the competent judge based on the analysis of the issues claimed, so, if you find yourself in a similar problem, take into account that Bandala & Asociados, is a firm that has certified staff, with the highest standards of quality, professionalism and commitment to safeguard your interests.
