More than 65 years after the confiscation by Cuba’s communist government of assets owned by U.S. businesses there, the Supreme Court on Thursday ruled in favor of a U.S. business that is seeking to recover for its losses under a 1996 law that targets the Cuban regime. By a vote of 8-1, the justices ruled in Havana Docks Corporation v. Royal Caribbean Cruises that Havana Docks, a U.S. company that before 1960 had owned a right to use and operate the docks in the port of Havana, is potentially entitled to receive hundreds of millions of dollars for the use of the port by cruise lines between 2016 and 2019, even if the company’s control of the docks would have expired in 2004.
The case hinged on the Cuban Liberty and Democratic Solidarity Act, a law passed by Congress in 1996 that is also known as the LIBERTAD Act or as the Helms-Burton Act (after its sponsors). One provision of the law 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,” while another 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.” From 1996 until 2019, when President Donald Trump declined to renew the suspension, U.S. presidents repeatedly suspended the right to bring a lawsuit.
After Trump opted not to renew the suspension, Havana Docks filed a lawsuit in Florida against four cruise lines – Royal Caribbean, Norwegian, Carnival, and MSC. Havana Docks contended that between 2016 and June 2019 the cruise lines had trafficked in property that had belonged to Havana Docks – 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 awarded Havana Docks more than $400 million. The cruise lines subsequently appealed to the U.S. Court of Appeals for the 11th Circuit, which – by a vote of 2-1 – reversed.
Havana Docks then came to the Supreme Court, which on Thursday threw out the 11th Circuit’s decision and sent the case back to the lower courts.
Writing for the majority, Justice Clarence Thomas explained that the key question in the case is whether, for purposes of the Helms-Burton Act, the “property which was confiscated by the Cuban Government” was Havana Docks’ right to use the docks (that is, the company’s “property interest in the docks”), or whether it was the docks themselves.
The answer to that question, Thomas continued, is that the “property which was confiscated” can refer both to “the plaintiff’s interest in that property” and, more broadly, to the physical property itself – such as the docks in this case. Therefore, Thomas wrote, “confiscated property” such as the docks “is, as it were, tainted—off limits—such that anyone who uses the property can be liable to those who had an interest in the tainted property.”
Applying that analysis to the case before him, Thomas reasoned that “the Cuban Government seized control of ‘property’—the docks that Havana Docks built—in 1960. At that point, the docks were tainted as confiscated property, … ‘the use of’ which the United States sought to ‘deter’” with the Helms-Burton Act. “The cruise lines later used the confiscated docks—property to which Havana Docks owns a certified claim—when they transported nearly a million passengers to Cuba between 2016 and 2019. The Court of Appeals therefore erred in concluding that Havana Docks failed to establish these requirements for” liability under the Helms-Burton Act.
The majority sent the case back to the lower court for it to consider, among other things, the cruise lines’ other defenses against liability.
Justice Sonia Sotomayor penned a concurring opinion that Justice Brett Kavanaugh joined. She flagged “two issues” that the majority did not address but that, in her view, “raise significant concerns” when the case returns to the lower court or in similar cases brought under the Helms-Burton Act.
First, Sotomayor argued, Havana Docks’ interpretation of the Helms-Burton Act “could allow it to recover a potentially unlimited amount of money from an unlimited number of people who use the confiscated docks at issue.” Although Havana Docks’ claim for its loss of its interest in the docks was certified as $9 million in 1960, Sotomayor noted, it could “recover millions, if not billions, of dollars over and over again, so long as anyone continues to make any commercial use of the docks. It is unlikely,” Sotomayor posited, “that Congress intended for someone who suffered a finite loss to reap infinite recoveries.”
Second, Sotomayor questioned whether the cruise lines might be shielded from liability under an exception to the Helms-Burton Act for “transactions and uses of property” related to legal travel to Cuba. “Indeed,” she observed, “the Federal Government appears to have previously taken the position that these cruises were lawful and beneficial to both Cuba and the United States.”
Justice Elena Kagan penned a rare solo dissent. She argued that the docks did not qualify as “property which was confiscated by the Cuban government” because the Cuban government, rather than Havana Docks, had always owned them. And Havana Docks’ property interest – its right to use the docks – had expired in 2004, she emphasized. “At the end of the day,” she wrote, “the Court’s interpretation of” the Helms-Burton Act, “treats all property interests as if they were perpetual ones.” But in her view, “a plaintiff can recover under” the Helms-Burton Act “only when the defendant traffics in the actual property that was confiscated from the plaintiff. Here,” she concluded, “that means Havana Docks’ claim should fail, because the cruise lines did not traffic in Havana Docks’ time-limited—and long-ago expired—concession.”
