It has been more than 65 years since Cuba’s communist government came to power and confiscated large swaths of assets owned by U.S. businesses in Cuba. On Monday, the Supreme Court will hear oral arguments in a pair of cases brought by two of those U.S. businesses, which are seeking to recover those decades-old losses under a 1996 law that targets the Cuban regime. The law at the center of both cases is the Cuban Liberty and Democratic Solidarity Act, also known as the LIBERTAD Act or as the Helms-Burton Act, after its sponsors. Title III of the Helms-Burton Act allows U.S. nationals to bring lawsuits in federal court against anyone who “traffics in property which was confiscated by the Cuban Government on or after January 1, 1959.” Another provision of the law gives the president the power to suspend the right to bring a lawsuit when he believes that doing so is “necessary to the national interests of the United States and will expedite a transition to democracy in Cuba.” Presidents repeatedly suspended the right to bring a lawsuit until President Donald Trump in 2019 opted not to renew the suspension. The first case on Monday, Havana Docks Corporation v. Royal Caribbean Cruises, was filed in Florida in 2019 against four cruise lines – Royal Caribbean, Norwegian, Carnival, and MSC. Havana Docks, a U.S. company, alleged that between 2016 and June 2019 the cruise lines had trafficked in property that had belonged to Havana Docks – specifically, the company’s right to use and operate the Havana Cruise Port Terminal, which the Cuban government confiscated in 1960. A federal district judge in Miami entered judgments of over $100 million against each of the four cruise lines. The cruise lines then appealed to the U.S. Court of Appeals for the 11th Circuit, which – by a vote of 2-1 – reversed. In his opinion for the majority, which was joined by Chief Judge William Pryor, Judge Adalberto Jordan pointed to what he characterized as “Havana Docks’ limited property interest” in the use and operation of the docks, which was only intended to last until 2004, well before the “alleged trafficking by the cruise lines” occurred. “We do not believe,” Jordan concluded, “that Congress, in enacting Title III, meant to convert property interests which were temporally limited at the time of their confiscation into” complete and permanent property interests “such that the holders of such limited interests could assert trafficking claims through what Buzz Lightyear called ‘infinity and beyond.’” Judge Andrew Brasher disagreed, calling the majority’s decision “counterfactual.” “Nothing in the statute,” he wrote, “requires that a claimant establish that, absent the confiscation, it would have a current, present day property interest in its stolen property.” Havana Docks asked the Supreme Court to weigh in, which it agreed to do last year. In its brief on the merits, the company emphasized that it “built, owned, and operated Havana’s dock facilities pursuant to promises that it could recover its costs by operating the docks for at least a 99-year period, anticipated to end in 2024 if not extended,” with the additional promise from the Cuban government that it would receive compensation for “the full value of those facilities” if the docks were seized. Between December 2015 and June 2019, the company wrote, the four cruise lines between them brought more than 1 million tourists to the docks in Havana. For that, Havana Docks said, the cruise lines paid the Cuban government more than $130 million, while taking in more than $1 billion. Havana Docks, it stressed, received nothing. Havana Docks contended that the text of the Helms-Burton Act “should make this an easy case.” The act, it wrote, creates liability for trafficking in confiscated property to anyone – such as Havana Docks – who owns a claim certified in 1971 by the Foreign Claims Settlement Commission, a government agency set up to hear claims against foreign governments. The interests of U.S. companies like Havana Docks, it said, “remain ‘property which was confiscated’ because Cuba stole them, and Title III’s protections continue from enactment to this day and beyond until U.S. nationals’ claims are satisfied.” By contrast, Havana Docks wrote, the rule established by the court of appeals “provides only fleeting and incomplete protection for U.S. nationals’ claims.” “Nothing in the Act’s text or intended operation requires the claimholder to prove it would have possessed a present interest in the property when trafficked,” Havana Docks contended. To the contrary, it argued, “‘[t]he text of the statute says that the trafficking must occur when a plaintiff “owns the claim,” not when the plaintiff would have owned the property.’” The Trump administration, which filed a “friend of the court” brief supporting Havana Docks, echoed the company’s arguments. It told the justices that when Congress passed the Helms-Burton Act, the commission had already certified claims for many interests confiscated in Cuba, “though the underlying property interests often would have expired. Yet under the court of appeals’ analysis, the right of action for those claim owners would have ceased to exist before Title III was ever adopted. It is implausible,” U.S. Solicitor General D. John Sauer wrote, “that Congress expressly included such interests within the statute while simultaneously precluding any suit based on the existing claims.” In their brief, the cruise lines responded that “[e]veryone on this side of the bay agrees” that Havana Docks “should get paid for what was taken from it.” The problem, the cruise lines argued, is that the company is seeking “to recover—multiple times over—for the loss of property rights it never owned from entities that did not visit the property until years after the concession expired for purposes unrelated to HDC’s” right to use the property.   For the cruise lines, the answers to two key questions determine whether a company can recover under this provision of the Helms-Burton Act: first, what property interest did the Cuban government take from the plaintiff; and did the defendant traffic in that confiscated property interest? Here, the cruise lines argued, both answers lead to the conclusion that Havana Docks cannot seek damages from the cruise lines. As an initial matter, the property interest that Havana Docks owned was a narrow one: the non-exclusive right to run cargo operations at the port of Havana until 2004. After that, the cruise lines said, Havana Docks “simply had no entitlement to profit from use of the docks for cargo services—confiscation or not.” Moreover, the cruise lines continued, their use of the docks from 2016-2019 to load and unload passengers could not have infringed on Havana Docks’ property interest or violated Title III. The cruise lines pushed back against Havana Docks’ suggestion that the dispute effectively hinges on the FCSC’s certification of Havana Docks’ claim back in 1971. Although the Helms-Burton Act “assigns FCSC claims a critical role,” they acknowledged, “Congress did not create liability for trafficking in FCSC claims; it created liability for trafficking in confiscated property itself.” And in any event, the cruise lines continued, the claim that the FCSC certified specifically recognized that the Cuban government had confiscated a limited property interest – “‘a concession for the construction and operation of wharves and warehouses in the harbor of Havana,’ which was ‘to expire in the year 2004.’” “No one would have or even could have intervened in those proceedings on the theory that, someday in the future, they would be a defendant under a future statute.” The second case slated for argument on Monday, Exxon Mobil v. Corporacion Cimex (Cuba), stems from the Cuban government’s confiscation in 1960 of oil and gas assets – including a 35,000-barrel-per-day refinery and more than 100 service stations – belonging to subsidiaries owned by Exxon (then known as Standard Oil). Exxon has never received any compensation for that confiscation. Exxon brought a lawsuit in 2019 in federal court in Washington, D.C., under Title III of the Helms-Burton Act against three entities owned by the Cuban government, contending that they violated the law by trafficking in confiscated property owned by Exxon – by (among other things) extracting, importing, and refining crude oil, and operating service stations using property that had been owned by the Exxon subsidiaries. The Cuban companies asked the federal district court to dismiss the case, contending that they were shielded from suit under the Foreign Sovereign Immunities Act, which generally bars lawsuits in U.S. courts against foreign governments and their “agenc[ies] and instrumentalit[ies].” U.S. District Judge Amit Mehta ruled that the Helms-Burton Act does not itself trump the FSIA; instead, he wrote, Exxon would have to show that an exception to the FSIA applied. The FSIA’s “expropriation” exception, which allows lawsuits to go forward in cases involving property rights taken in violation of international law when there is a connection between the defendant, the expropriated property, and some kind of commercial activity in the United States, did not apply, Mehta concluded. However, Mehta continued, the FSIA’s “commercial activity” exception, which allows lawsuits that are (among other things) based on a foreign act taken in connection with a commercial activity by a defendant outside the United States that caused a direct effect in the United States, did apply to one of the Cuban companies because of its operation of gas stations in Cuba that process money transfers from U.S. residents to Cuba and sell products imported from the United States. A divided panel of the U.S. Court of Appeals for the District of Columbia Circuit agreed that the FSIA generally bars lawsuits against Cuban state-owned companies in U.S. courts, so that Exxon needed to show that an exception to the FSIA applied, and that the expropriation exception does not apply. But in an opinion by Chief Judge Sri Srinivasan, the majority sent the case back to the district court for another look at whether the Cuban company’s money transfers and sales of U.S. goods at its gas stations have effects in the United States “and whether the effects are sufficiently ‘direct.’” Senior Judge Raymond Randolph dissented. He would have held that it did not matter whether any of the exceptions to the FSIA applied because “Title III, considered alone, deprives the Cuban defendants of immunity from suit.” Exxon went to the Supreme Court, which agreed last year to take up its case. Before it can withdraw sovereign immunity, the company acknowledged, “Congress must speak clearly.” But the text of Title III of the Helms-Burton Act does exactly that, Exxon wrote, by specifically authorizing “suits against ‘any agency or instrumentality of a foreign state.’” Less than three years ago, in Department of Agriculture Rural Development Rural Housing Service v. Kirtz, Exxon continued, the Supreme Court held that Congress waives sovereign immunity when it “creates a cause of action that expressly authorizes suits for money damages against federal or state governments.” The same principle applies to foreign governments in the Helms-Burton Act, Exxon insisted: Title III “authorizes damages actions against ‘any person,’ expressly defined to include ‘any agency or instrumentality of a foreign state.’” It is notable, Exxon added, that the same Congress that enacted the law at issue in Kirtz passed Title III. Moreover, the company continued, quoting the court, “Congress does not expressly ‘authorize a suit against a sovereign with one hand, only to bar it with another.’” Title III contains other clues that it trumps the general presumption against sovereign immunity created by the FSIA, Exxon wrote. For example, several provisions presume that “plaintiffs will sue Cuban defendants and win ‘judgment[s] against an agency or instrumentality of the Cuban Government.’ Such ‘judgments’ of course will not arise unless plaintiffs can obtain jurisdiction.” Finally, Exxon concluded, the purpose of Title III was “to provide a ‘fully effective’ judicial remedy for Americans whose property was seized by the Castro regime and is still being exploited by Cuban state-owned enterprises.” If those U.S. companies must satisfy an exception to the FSIA before they can go to court, Exxon argued, it “would legally bar many claims and would erect near-insurmountable practical barriers for most of the rest.” The Trump administration filed a “friend of the court” brief in which it agreed with Exxon that “[p]laintiffs may sue Cuban agencies and instrumentalities under Title III of the LIBERTAD Act without separately satisfying an exception to foreign sovereign immunity in the FSIA.” Sauer told the justices that “President Trump has determined that Title III suits are an invaluable foreign-policy tool. This Court should reverse the judgment below and allow Title III to work as Congress intended—to promote accountability for the Cuban government’s unlawful expropriations by exposing its agencies and instrumentalities to suit for trafficking in expropriated property, thus depriving that government of its ill-gotten gains.” The Cuban companies, urging the court to leave the D.C. Circuit’s decision in place, agreed that “Helms-Burton is far-ranging legislation with ambitious goals,” including “political change in Cuba and compensation for U.S. nationals who lost property there.” But in enacting Title III, the companies said, “Congress provided a cause of action, not a guarantee of success.” One problem with Exxon’s argument that Title III eliminates the FSIA’s general presumption of immunity, the Cuban companies argued, is that it does not distinguish between companies owned by Cuba and those owned by other foreign countries – so that Title III would also strip other state-owned companies of immunity from suit. Moreover, the Cuban companies continued, Title III’s broad definition of “trafficking” – which includes the use of confiscated property, commercial activities that use or benefit from confiscated property, or profiting from trafficking by someone else – would “easily reach” companies owned by other foreign countries beyond Cuba. Indeed, the Cuban companies suggested, companies owned by myriad countries – ranging from Argentina and Brazil to China and Singapore – “are commercially engaged with Cuba and therefore exposed to Title III lawsuits.” Nor does the Supreme Court’s decision in Kirtz, the Cuban companies argued, lead inescapably to the conclusion that Congress intended to supplant immunity under the FSIA with Title III. Instead, it “is limited to the common-sense notion that Congress does not enact ‘dead-letters,’ statutory causes of action dead on arrival,” the companies wrote. But in this case, even when Title III and FSIA are read together, there are still opportunities for companies whose properties were confiscated to bring lawsuits in U.S. courts, if they can satisfy either the expropriation exception or the commercial-activity exception. “Retaining FSIA immunity would thus not render meaningless application of the cause of action to instrumentalities because they enjoy only restrictive, not absolute, immunity.” Finally, the Cuban companies contended, history shows that if Congress had wanted to change the immunity that foreign countries and state-owned companies enjoy, it would have done so by expressly amending the FSIA. “The FSIA’s immunity from suit provisions have been amended fifteen times, its execution immunity provisions twelve,” the Cuban companies stressed. Exxon and the federal government, the Cuban companies wrote, “are free to ask Congress for an amendment creating a Title III immunity exception.” Indeed, they noted, such an amendment was proposed for Title III cases but “was withdrawn after strong Administration objections.” The post Supreme Court to hear arguments on confiscations by Cuban government appeared first on SCOTUSblog.