SCOTUS: Cuban Confiscation Suits to Proceed

A new Supreme Court ruling yesterday, June 23, means many victims of Fidel Castro's confiscations have a practical path to recover damages – nearly 60 years later! The 6-3 decision in Exxon v. Cimex tracked well-worn party lines, completing a one-two punch against Cuba and greasing the skids for a new economic war. Now, President Donald Trump's unique moves against the totalitarian regime may finally be allowed to proceed. All of this was made possible by a 1996 law suspended by every President since then, and never implemented, until now.

The value of all Exxon's property in Cuba was just over 70 million USD in 1960. The spending equivalent is well over 700 million today. That's what Castro stole from Exxon, or rather Standard Oil, as it was known then. His gang took everything the company had, which the Court said, "included an oil refinery, multiple product terminals and packaging plants, and 117 service stations and related properties." And paid exactly nothing for any of it. With so much American capital invested in Cuba, Congress tried to do something to protect it. They set up a claims process certifying losses incurred for future action, which has finally arrived. Adding up damages and interest, Exxon's claim may be worth billions.

In 1996, what was then widely known as the Helms-Burton legislation was passed by the new Republican Congress and signed by President Bill Clinton. It was during a strong wave of anti-Cuban regime sentiment following the shooting down of private planes involved in refugee rescues. A key provision allowed, for the first time, those with certified claims to file suit against businesses that had dealings with the property seized. So, if a company built a ship's terminal, Castro seized it in 1960, and now Royal Caribbean uses it to make money, they might have to pay up. That's what happened to Havana Dock Corporation, and the Supreme Court ruled in May that they will have to face suit.

Cuba Libre: Here come the lawsuits

Every President until Donald Trump triggered a special provision in the law suspending this right to sue. That's why these cases are bubbling up now, after all this time, and why we'll likely see more cases – the law is just now starting to get put through its paces operationally. That means lots of rulings, which are the basis of appeals to come. Nice work for the bar, to be sure.

Tuesday's ruling in Exxon established that suits filed under Helms-Burton need not meet narrow legal exceptions that permit suing a foreign government entity. The Foreign Sovereign Immunities Act governs those rules, which are extraordinarily tight. If these suits against Cuba and its business partners were forced to satisfy those standards, they would almost certainly fail. Which is the enemy of this law's presumed purpose – to allow the President of the United States to turn on the litigation firehose and scare the economic hell out of Cuba's commercial partners.

You’ve got some Royal Caribbean Coming

Paired with the Havana Docks v. Royal Caribbean case released earlier this term, Exxon v. Cimex sets Americans with certified claims loose against the Cuban regime. Any company that does business in Cuba, or with Cuban companies, must steer well clear of the stolen assets of Americans if they want to stay out of court. If there's one group no one wants to be the target of, it's the U.S. plaintiff's bar. Presumably, that's what the law's authors were counting on: economic death by a thousand cuts that costs the US taxpayers nothing to deliver.

Justice Brett Kavanaugh wrote the Court's opinion, joined by Chief Justice John Roberts, Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Amy Coney Barrett. Justice Elena Kagan wrote in dissent, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson.

Dig Deeper Into the Themes Discussed in This Article!

Liberty Vault: The Constitution of the United States

Liberty Vault: The Supreme Court