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Article United States: Appellate Court Rejects Claims Against Cruise Lines for Trafficking in Confiscated Property in Cuba

On October 22, 2024, the U.S. Court of Appeals for the 11th Circuit set aside judgments against American cruise ship companies for claimed violations of the Helms-Burton Act arising from their use of port facilities in Cuba. That statute provides a private cause of action against anyone who “traffics” in “property which was confiscated by the Cuban Government.” The Court ruled that because the plaintiff-appellee’s confiscated property interest was a 99-year usufructuary concession that would have expired in 2004, the cruise lines’ use of the property in 2016-2019 did not give rise to a claim for trafficking in confiscated property. (Havana Docks Corp. v. Royal Caribbean Cruises, Ltd., No. 23-10151.)

Background

After coming to power in 1959, the Cuban government under Fidel Castro began nationalizing property interests held by American companies. The U.S. government responded with federal legislation, the Cuban Claims Act of 1964, authorizing claims against the seized properties. Many claims were certified under the law, but the U.S. and Cuban governments have not settled these claims. (Decision at 13-14.)

Plaintiff-appellee Havana Docks Corp. held a 99-year concession that granted the company a usufruct in certain public spaces in and around port facilities in Havana. The concession was set to run from 1905 to 2004, at which time the concession would have expired and the property would have reverted to Cuba. (Decision at 11.)

In 1960, the Castro regime forcibly confiscated and took possession of the port facilities without compensation to Havana Docks. The company filed a claim under the Cuban Claims Act. The U.S. Foreign Claims Settlement Commission, which was authorized to gather information for an eventual negotiation on claims of confiscated properties in Cuba, certified Havana Docks’ claim and assessed the loss at over $9 million, before interest. (Decision at 15.)

The Cuban Liberty and Democratic Solidarity (LIBERTAD) Act, more commonly known as the Helms-Burton Act, provides a private cause of action for U.S. nationals against anyone who “traffics” in property confiscated by the Cuban government. In this litigation, Havana Docks claimed they were entitled to damages from the cruise lines because they trafficked in their confiscated property. The district court found that the cruise lines had engaged in such trafficking and awarded a judgment to Havana Docks. The cruise lines appealed.

Discussion and Holding

The court noted that the case raised a difficult issue of first impression. (Decision at 17.) The court said the way to interpret the Helms-Burton Act cause of action was to “view the property interest at issue . . . as if there had been no expropriation and then determine whether the alleged conduct constituted trafficking in that interest.” (Decision at 21.) The court thus framed the question as turning on whether but for the confiscation, Havana Docks would have had a property interest on the port facilities during the cruise lines’ use of them during 2016-2019. (Decision at 23.)

Addressing the nature of Havana Docks’ property interest, the court quoted Thompson on Real Property to define a “usufructuary concession” as “a personal servitude granting the right to use another’s property and take its ‘fruits’ or profits.” (Decision at 24.) This usufructuary concession gave Havana Docks an interest in property owned by the Cuban government that expired in 2004.

Quoting Buzz Lightyear, the court said Congress did not intend in the Helms-Burton Act to convert property interests that were temporally limited into interests in perpetuity to allow trafficking claims to be asserted through “infinity and beyond.” (Decision at 23.) The court noted the property interest would have expired in 2004 regardless of the Cuban Government’s taking of the facilities. (Decision at 23-24.) It observed that while Havana Docks has a certified claim against the Cuban government under the Cuban Claims Act, “the certified claim is not a means for expanding the nature of a limited property interest” for purposes of the cause of action under the Helms-Burton Act. (Decision at 26.)

Conclusion

While the court held that Havana Docks’ 2016-2019 claims do not satisfy the Helms-Burton Act, it noted its ruling does not preclude claims based on activities during 1996-2001. The Court agreed with both parties that the case should be remanded to the district court for further consideration of those claims. (Decision at 29.)

Louis Myers, Law Library of Congress
November 5, 2024

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Chicago citation style:

Myers, Louis. United States: Appellate Court Rejects Claims Against Cruise Lines for Trafficking in Confiscated Property in Cuba. 2024. Web Page. https://www.loc.gov/item/global-legal-monitor/2024-11-05/united-states-appellate-court-rejects-claims-against-cruise-lines-for-trafficking-in-confiscated-property-in-cuba/.

APA citation style:

Myers, L. (2024) United States: Appellate Court Rejects Claims Against Cruise Lines for Trafficking in Confiscated Property in Cuba. [Web Page] Retrieved from the Library of Congress, https://www.loc.gov/item/global-legal-monitor/2024-11-05/united-states-appellate-court-rejects-claims-against-cruise-lines-for-trafficking-in-confiscated-property-in-cuba/.

MLA citation style:

Myers, Louis. United States: Appellate Court Rejects Claims Against Cruise Lines for Trafficking in Confiscated Property in Cuba. 2024. Web Page. Retrieved from the Library of Congress, <www.loc.gov/item/global-legal-monitor/2024-11-05/united-states-appellate-court-rejects-claims-against-cruise-lines-for-trafficking-in-confiscated-property-in-cuba/>.