By Jan Wolfe
WASHINGTON, May 21 – The U.S. Supreme Court delivered a setback on Thursday to four American cruise operators that contested $440 million in combined judgments after being accused of unlawfully using docks in Cuba that were seized in 1959 by former leader Fidel Castro’s communist government.
The justices, in an 8-1 ruling, set aside a lower court’s decision to throw out the judgments against Carnival, Norwegian Cruise Line Holdings, Royal Caribbean Cruises and MSC Cruises. The cruise operators were sued by a U.S. company called Havana Docks Corporation that had built the port facilities before the Cuban revolution.
Havana Docks filed suit under the Helms-Burton Act, a 1996 law that allows U.S. nationals who owned property in Cuba to sue anyone who “traffics in property which was confiscated by the Cuban government on or after January 1, 1959.”
Thursday’s ruling was issued at a particularly sensitive time in U.S.-Cuban relations. The United States on Wednesday announced murder charges against former Cuban President Raúl Castro, Fidel’s younger brother, in a major escalation in President Donald Trump’s pressure campaign against Cuba’s communist government.
Under Trump, the United States has effectively imposed a blockade on Cuba by threatening sanctions on countries supplying it with fuel, triggering power outages and exacerbating its worst crisis in decades.
Havana Docks built docks in Havana’s port during the early 20th century, and has sought compensation from the cruise lines because their ships have used the seized terminal. The company had a 99-year concession from Cuba’s government for the construction and operation of piers at the port of Havana.
Shortly after coming to power, Castro nationalized and expropriated property held by U.S. companies including Havana Docks. Cuba has never paid any compensation to Havana Docks.
While the Helms-Burton Act primarily authorized lawsuits against Cuba’s government and its state-owned enterprises, it also created potential liability for international businesses like the U.S. cruise lines that have done business in Cuba.
TRUMP UNLEASHED WAVE OF LAWSUITS
U.S. presidents of both parties opted to suspend a key provision of the Helms-Burton Act, meaning private lawsuits could not go forward. But Trump lifted that suspension in 2019 during his first term in office, unleashing a wave of litigation in U.S. courts against Cuban state-owned entities and a few American companies that were accused of trafficking in confiscated property.
The four cruise operators used the docks from 2016 to 2019, after President Barack Obama had 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 U.S. judge in 2022 ruled that the cruise lines had engaged in trafficking by having their ships dock at the terminal and imposed judgments of more than $100 million against each of the four.
The Atlanta-based 11th U.S. Circuit Court of Appeals threw out those judgments last year, focusing on the fact that the Havana Docks concession would have expired in 2004, well before the cruise lines used the facilities.
“When that concession expired in 2004, any property interest that Havana Docks had by virtue of that concession ended,” the 11th Circuit wrote. Thus, the conduct of the cruise lines from 2016 to 2019 did not constitute trafficking in the confiscated property of Havana Docks, it added.
Writing for the Supreme Court, conservative Justice Clarence Thomas said the 11th Circuit’s decision was in conflict with the plain text of the Helms-Burton Act.
In a dissent, liberal Justice Elena Kagan wrote that it was her colleagues who had misconstrued the statute’s text.
Kagan wrote that “what Havana Docks owned was only a property interest allowing it to use those docks for a specified time,” and that Thursday’s decision will “allow plaintiffs to recover for trafficking in property that was not theirs.”
Havana Docks and the cruise lines either did not immediately respond to requests for comment or declined to comment.
The 11th Circuit’s decision was one of several from U.S. courts that have created barriers for Helms-Burton Act claimants. Most of these cases have been dismissed on jurisdictional or procedural grounds.
The Supreme Court heard arguments in the case in February. On the same day, the justices also heard arguments in another case involving Helms-Burton Act litigation – ExxonMobil’s lawsuit seeking compensation from Cuban state-owned firm Corporación CIMEX in light of Castro’s confiscation of all of the U.S. energy company’s oil and gas assets in Cuba in 1959.
The Supreme Court is expected to rule in the Exxon case by the end of next month.
(Reporting by Jan Wolfe; Editing by Will Dunham)
Comments