More than 60 years ago, Fidel Castro rose to power in Cuba and began confiscating the assets of all American-owned businesses, including the Havana Docks Company. The port business was seized at gunpoint by revolutionaries and never compensated for its lost property.
But a change in policy during the first Trump administration allowed the company to sue major cruise lines for parking ships at the docks and bringing nearly a million people to Havana after rules were loosened in 2016 to allow tourism to the island. Filed in 2019, the case will be heard by the Supreme Court on Monday.
The case, and another involving similar claims from Exxon Mobile over its confiscated oil and gas assets, lands at a fraught time for U.S.-Cuba relations. The Trump administration has ratcheted up political and economic pressure on the communist country by crippling its tourism industry and cutting off access to fuel shipments.
The pair of cases involve discrete, narrow legal questions about the extent to which thousands of Americans can get compensation in U.S. courts from the entities that currently hold or profit from property taken by the Cuban government. But if the Supreme Court sides with the companies, it could also give the administration more leverage over Cuba.
“President Trump will be listening for the outcome,” said John S. Kavulich, the president of the U.S.-Cuba Trade and Economic Council. A ruling that clears the way for the lawsuits, he added, could lead to less investment in the island and put “pressure on Cuba to make the changes Trump wants.”
Justice Department lawyers filed briefs in support of the port business and Exxon, telling the court that the suits, first authorized by Congress in the 1990s, have become an important foreign-policy tool for discouraging investment from Cuba.
The lawsuits “deter private actors from collaborating with that government to exploit expropriated property, deprive the Cuban government of funds that undermine the United States’ longstanding embargo of Cuba, and increase economic pressure to achieve democratic reforms in Cuba,” wrote D. John Sauer, the solicitor general.
The cruise industry says it acted lawfully and was following the lead of the Obama administration, which encouraged travel to Cuba during a brief period of renewed diplomatic relations starting in 2016. Cruise itineraries for Havana included visits to Ernest Hemingway’s home outside the city and outings to see dance performances. President Barack Obama declared the tours an opportunity for Americans to appreciate “the incredible history and culture of the Cuban people.”
A decade later, the Trump administration has taken a different tack, announcing tariffs against any country that sends oil to Cuba, stifling tourism and announcing that the communist government is “going down for the count.”
Before the Cuban revolution, American companies owned or controlled 90 percent of the island’s electricity generation, its telephone system, much of its mining industry, sugar-cane fields, and many oil refineries and warehouses. Most confiscated assets were transferred to state-owned companies controlled by the government.
After the seizures, American investors filed claims with the U.S. government through the Foreign Claims Settlement Commission, an agency at the Department of Justice. In 1971, the commission certified Havana Docks’ claim of $9.1 million, or nearly $100 million adjusted for inflation, which remains unpaid. In total, the commission certified $1.9 billion in claims held by almost 6,000 claimants or about $9.3 billion in current value, according to the U.S.-Cuba Trade and Economic Council.
In 1996, Congress tightened the U.S. trade embargo after Cuban fighter jets shot down two planes flown by members of the Cuban exile group Brothers to the Rescue. Three U.S. citizens and one permanent resident were killed.
The Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton law, also included language declaring that resolution of the property claims should be a key condition for restoring economic and diplomatic ties with Cuba. It included a provision at issue in Monday’s court cases that provided a path for Americans to sue in federal court over the “trafficking” or use of assets seized by the Cuban government. Known as Title III, it also allowed presidents to suspend the litigation stipulations, which were politically and diplomatically controversial.
Until 2019, presidents of both parties had suspended that provision. The Trump administration chose to activate it, opening the door to the lawsuits. The decision came despite an intensive lobbying effort by Carnival Corporation and a team that included Pam Bondi, then a lobbyist who had just finished her second term as Florida’s attorney general and had developed a close relationship with Mr. Trump. European officials also objected, arguing that the move would harm their businesses.
Secretary of State Marco Rubio reaffirmed the administration’s commitment to allowing such lawsuits early last year.
Mickael Behn, who succeeded his grandfather as president of Havana Docks, had been patiently waiting for just such an opening. For decades, the company continued to operate on paper, paying taxes, maintaining records and holding annual meetings in the hopes of someday getting the terminal back or getting compensated, court records show.
The company built, owned and operated Havana’s dock facilities in the early 20th century in exchange for a right to operate the docks until at least 2004, a 99-year agreement granted by the pre-Castro Cuban government. When the communist regime took over and seized the docks, the company still had 44 years left in its agreement.
Mr. Behn’s legal team, led by Roberto Martinez, a former U.S. attorney in Miami, says the company’s interest in the property did not “expire” in 2004 because it was confiscated before the clock ran out. Congress intended the 1996 law’s protections to “continue to this day,” the company said, because Cuba has never paid for the confiscated property.
From 2015 to 2019, cruise lines paid entities connected with the Cuban government at least $130 million to use the port facilities, according to court records.
Havana Docks notified the cruise lines of its claims, according to court filings, “but all four cruise lines proceeded to moor their ships and disembark their passengers on the very same piers and the very same terminal” seized from the company.
Ahead of Monday’s arguments, cruise lines, including Royal Caribbean Cruises, Norwegian Cruise Line Holdings and Carnival Corporation, said in court filings they cannot be on the hook to pay the port business because of the chronology of events.
The cruise ships did not set sail for Cuba or dock in Havana until 2016, after the Obama administration reopened travel to Cuba, their lawyers said, and also after Havana Docks’ rights to the pier complex ended.
“The notion that cruise lines should pay hundreds of millions of dollars for following the executive branch’s lead in reopening travel to Cuba defies both common sense and other aspects of the Helms-Burton Act,” the cruise line lawyers, led by the former solicitor general Paul Clement, told the justices.
A federal judge in the Southern District of Florida ruled against the cruise lines in 2022, rejecting their claim that the use of the docks amounted to lawful travel and ordering the four cruise lines to pay at least $110 million each.
The U.S. Court of Appeals for the 11th Circuit reversed the ruling, finding that the company’s rights to the pier property and operations had a time limit. Even if the confiscation had not occurred, the majority said the company’s interest would have ended in 2004.
In dissent, Judge Andrew L. Brasher characterized the majority opinion as “counterfactual,” because it asked what would have happened had the property not been seized in 1960.
In Exxon’s case, the company, then known as Standard Oil, had supplied, refined and distributed fuel throughout the island with more than 100 service stations, and its assets were abruptly confiscated by the Cuban government in 1960. Exxon sued three government-owned companies that it says have been exploiting its stolen refineries and service stations without compensation ever since. The company’s loss was valued at more than $70 million in 1969.
Foreign governments and the businesses they own are generally shielded from liability in U.S. courts under the Foreign Sovereign Immunities Act. In ruling against Exxon, the U.S. Court of Appeals for the D.C. Circuit said its case against the Cuban companies could not immediately move forward unless Exxon could meet one of the exceptions to the immunities law.
Lawyers for the Cuban companies, led by Michael R. Krinsky, urged the justices to send the case back to the lower courts to determine whether Exxon could essentially pierce the government’s traditional protection from liability. The 1996 law does not give the president the authority to sweep aside immunity protections, the companies said.
Exxon’s lawyers, led by a former acting solicitor general, Jeffrey B. Wall, urged the Supreme Court to find for the company, saying the appeals court majority “imposes yet another in a long line of barriers to recovery for victims of the Castro government’s illegal confiscations.”
The Trump administration agreed, telling the justices that the lower court ruling “upends Congress’s carefully calibrated authorization of private suits against Cuban agencies and instrumentalities and thwarts a critical foreign-policy tool.”
International law scholars, however, cautioned the court that embracing the position of Exxon and the administration could destabilize foreign relations by exposing other countries — including Brazil, China, Russia and Singapore — to liability if their state-owned companies export goods to Cuba, use its airports or finance projects.
The Supreme Court, the scholars wrote in a brief to the justices, “should leave the choice of whether to embroil the United States in such tensions to the political branches.”
Frances Robles contributed reporting.
Ann E. Marimow covers the Supreme Court for The Times from Washington.
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