By Jan Wolfe
Feb 22 (Reuters) - The U.S. Supreme Court is set to explore legal questions arising from the fraught history of U.S.-Cuban relations when it considers the scope of a 1996 law that lets U.S. nationals seek compensation for property confiscated by the communist-led Cuban government.
The justices hear arguments on Monday in two cases centered on the federal law called the Helms-Burton Act, one involving U.S. oil major ExxonMobil and the other involving the cruise lines Carnival, Royal Caribbean,
Norwegian Cruise Line and MSC Cruises.
One of the law's provisions, called Title III, allows for lawsuits in U.S. courts against entities that "traffic" in property confiscated by the Cuban government after the revolution that brought Fidel Castro to power in 1959.
While the two cases focus on distinct legal issues, both raise the question of just how powerful a remedy Congress intended Title III to be. In both cases, the Supreme Court has the opportunity to eliminate barriers that claimants face in bringing Helms-Burton Act lawsuits.
The justices have never before interpreted Title III, which Congress authorized the U.S. president to suspend if deemed "necessary to the national interests of the United States."
Title III was long dormant due to presidential decisions to suspend it. But President Donald Trump, who has taken a hard line toward Cuba, lifted that suspension during his first term in office, unleashing a wave of about 40 lawsuits filed in 2019 and 2020 that have slowly made their way through the courts.
Trump's administration has declared Cuba "an unusual and extraordinary threat" to U.S. national security, cutting off the flow of Venezuelan oil to the Caribbean island nation and threatening to slap tariffs on any country supplying it with fuel.
BILLIONS OF DOLLARS IN CLAIMS
Following the revolution, Cuba's new communist government nationalized U.S. property that now is worth billions of dollars, including factories, sugar mills, oil refineries and power plants.
The Helms-Burton Act formalized the U.S. trade embargo against Cuba that had been in effect by presidential order since President John Kennedy's administration in the 1960s.
Title III created a legal remedy for U.S. nationals whose property was confiscated. Such plaintiffs can seek enhanced damages in federal courts from entities that knowingly use the property, including both Cuban state-owned entities and multinational companies.
Presidents Bill Clinton, George W. Bush and Barack Obama all suspended Title III, seeking to avoid diplomatic conflicts with allies like Canada and Spain whose companies have invested in Cuba, before Trump lifted the suspension in 2019. The State Department said at the time that Trump's move would "ratchet up pressure on the Cuban government" and "penalize those who benefit from the rightful property of Americans."
In one of the Supreme Court cases, Exxon is seeking more than $1 billion in compensation from CIMEX, a Cuban state-owned firm, for oil and gas assets seized in 1960. In the other case, a small company that built docks in Havana's port prior to the revolution is seeking compensation from the four cruise lines, whose ships have used the terminal.
Exxon, which filed its suit in Washington in 2019, has asked the justices to reverse a lower court's 2024 decision finding that Cuban state-owned enterprises facing Helms-Burton Act claims can raise the defense of foreign sovereign immunity. That legal doctrine generally shields foreign governments and their agents from being sued in U.S. courts.
The lower court's decision "imposes yet another in a long line of barriers to recovery for victims of the Castro government's illegal confiscations," Exxon's lawyers said in a 2024 court filing.
CIMEX has argued in court filings that the 2024 decision should be upheld because it "both respects and safeguards congressional judgment in this sensitive area."
Legal experts said the 2024 decision and other rulings interpreting Helms-Burton have made it costly and time-consuming for U.S. businesses to seek compensation from Cuban entities.
"The amount of time and resources that has been required is overwhelming for a lot of claimants," said Washington lawyer Jared Butcher, who represents clients in commercial litigation.
CRUISE SHIP DISPUTE
The other case being argued on Monday does not implicate sovereign immunity because the cruise company defendants are private companies, rather than state-owned entities. At issue in that case is whether a Helms-Burton Act claimant must establish that it would have a present-day property interest in the assets at issue if they had not been nationalized.
Havana Docks Corporation, a U.S. firm that built docks in Havana's port prior to the revolution, sued the cruise lines in federal court in Florida in 2019. Castro revoked the company's legal right to the docks shortly after coming to power.
The four cruise operators used the docks from 2016 to 2019, after Obama eased travel restrictions on Cuba. In a joint court filing, the companies said it defies common sense that they "should pay hundreds of millions of dollars for following the executive branch's lead in reopening travel to Cuba."
A federal judge found the cruise companies liable for a combined $440 million, saying they had trafficked in confiscated property. An appeals court threw out those judgments last year, highlighting the difficulties Helms-Burton Act claimants face.
"Plaintiffs are having a hard time recovering under the Helms-Burton Act for a wide variety of reasons, and it's probably more difficult to recover than Congress had anticipated when it passed the act in 1996," said Vanderbilt Law School professor Ingrid Brunk. "But that's not an argument that means every plaintiff should win."
(Reporting by Jan Wolfe in New Orleans; Editing by Amy Stevens and Will Dunham)
