By Jan Wolfe
WASHINGTON, May 21 – The U.S. Supreme Court on Thursday delivered a setback 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, which were sued by a U.S. company that had built the port facilities before the Cuban revolution.
The company 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.”
Havana Docks Corporation, which built docks in Havana’s port during the early 20th century, sued under the Helms-Burton Act seeking compensation from the cruise lines, whose ships have used the terminal.
Shortly after coming to power, Castro nationalized and expropriated property held by U.S. companies including Havana Docks, which had a 99-year concession for the construction and operation of piers at the port of Havana, granted in 1934 by Cuba’s government.
Cuba has never paid any compensation to Havana Docks, but the Helms-Burton Act gave the company an opening to sue for damages in U.S. court.
While the Helms-Burton Act primarily authorized lawsuits against the Cuban 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.
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 President Donald 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 federal 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 at the time. Thus, the conduct of the cruise lines from 2016 to 2019 did not constitute trafficking in the confiscated property of Havana Docks, it added.
The 11th Circuit’s decision threw out the $440 million in combined judgments, but did not totally end the Havana Docks litigation. The 11th Circuit said Havana Docks might still have a viable claim against Carnival because of alleged conduct by that company before 2004.
The 11th Circuit’s decision is 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 has not yet ruled in the Exxon case.
(Reporting by Jan Wolfe; Editing by Will Dunham)
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