The Supreme Court cleared the way on Tuesday for Exxon Mobil to seek compensation from Cuban-owned entities over oil and gas assets the Communist country seized in 1960.
Then known as Standard Oil, Exxon had supplied, refined and distributed fuel throughout the island with more than 100 service stations, when its assets were abruptly confiscated after Fidel Castro rose to power and nationalized private property.
Exxon later sued three government-owned companies that it said had been exploiting its stolen refineries and service stations without compensation ever since.
The case was one of two disputes this term over the extent to which thousands of Americans can get compensation in U.S. courts from entities that hold or profit from property taken by the Cuban government. In May, the justices overwhelmingly sided with a U.S.-owned port business that sued major cruise lines that have used confiscated docks in Havana.
The decision on Tuesday comes as President Trump squeezes the Communist country, blocking oil shipments to the island from Venezuela and Mexico. The administration had backed Exxon’s position in the case, telling the justices that such lawsuits are a critical diplomatic tool for dissuading investment in Cuba.
Foreign governments and the businesses they own are generally shielded from liability in U.S. courts under the Foreign Sovereign Immunities Act, but Exxon had argued it qualified for an exemption to the prohibition.
In its 6-to-3 vote, the court’s conservative majority agreed because of a separate statute, the Helms-Burton Act, which the court said permits such lawsuits against Cuba and Cuban-owned entities at the president’s discretion.
Presidents, not the courts, are the “gatekeeping authority over those suits,” wrote Justice Brett M. Kavanaugh, a strong proponent of executive power. The “president has determined that permitting those suits will promote U. S. foreign policy interests,” and blocking them because of other federal laws would “thwart Congress’s design and directly contravene the president’s foreign policy judgments,” he wrote.
The three liberal justices dissented. Justice Elena Kagan said the Helms-Burton Act did not eliminate the protection from liability that federal law typically provided to foreign states, including Cuba. The statute the majority cites, she wrote, “says not one word on the topic” of piercing the traditional immunity for foreign governments.
The ruling sends the case back to the lower courts for additional proceedings.
After Fidel Castro seized assets of American-owned businesses more than 60 years ago, U.S. investors filed claims with the U.S. government through the Foreign Claims Settlement Commission, an agency within the Justice Department. Exxon’s loss was valued at more than $70 million in 1969.
Decades later, Congress passed the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act, which declared that resolution of the property claims were a central condition for restoring economic and diplomatic ties with Cuba. A provision of the law allowed Americans to sue in federal court over the “trafficking” or use of assets seized by the Cuban government.
Until the first Trump administration, however, presidents of both parties had suspended the provision permitting the lawsuits, which were viewed as politically and diplomatically controversial.
The law was passed in 1996 after Cuban fighter jets shot down two planes flown by members of the Cuban exile group Brothers to the Rescue. Four people, including three U.S. citizens, were killed. The incident was the basis of federal charges brought in May against Raúl Castro, the former president of Cuba and the brother of Fidel Castro.
The U.S. Court of Appeals for the District of Columbia Circuit had ruled against Exxon, saying 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 cautioned the court against reading into the law an exception they said Congress did not create, while Exxon’s lawyers said Congress intended to apply diplomatic and economic pressure on Cuba by allowing such lawsuits.
International law scholars had 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.
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