By Samantha Cook, Editor-in-Chief
Javier Garcia-Bengochea is a Cuban-American neurosurgeon who was 15 months old when his family fled Cuba. He claims his family was an owner of a valuable piece of property confiscated by Castro’s regime. Garcia-Bengochea, like many other certified claimants, considers himself and his family to have been robbed by the Cuban government and still seeks reparations. The Trump Administration recently decided not to renew the waiver of the provision of the Helms-Burton Act that permits former owners of property confiscated by the Castro regime to sue any entity trafficking in that property. This decision is lauded by hard-liners promoting a firm American stance against Cuban Communism, but it also finds itself at odds with standards of international law, which discourages extraterritoriality, that is, laws that govern “conduct outside [a country’s] territory that has or is intended to have substantial effect within its territory.” Generally, international law respects that jurisdictions will overlap in issues involving such areas as multinational businesses, international transportation, and the environment. However, a U.S. law allowing lawsuits against any company – from any country – using confiscated property in Cuba muddles the line between domestic and international jurisdiction and resurfaces the concerns voiced by Congress and President Clinton at the time the bill was passed.
- The Helms-Burton Act
The late 20th century brought an era of conflict between the United States and Cuba, beginning in 1959 when Fidel Castro’s revolution placed a Communist government in power and aligned with the Soviet Union. Since this time, U.S. policy toward Cuba has been one of isolationism and economic disenfranchisement, primarily through embargoes. In 1996, the Cuban government shot down two American civilian planes, which were running a humanitarian mission to rescue Cuban rafters crossing the ocean to Florida. This incident sparked outrage in the United States and moved President Clinton to sign into law a piece of legislation to punish the Cuban government, entitled the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 (the “Helms-Burton Act” or the “Act”). The purpose of the Act was to bolster the economic sanctions against Cuba, like its predecessors, but what made this Act unique was that it introduced a new mechanism by which to penalize the Cuban government. It created extraterritorial jurisdiction for Americans to sue the any companies trafficking in expropriated property that was taken without compensation by the Cuban government.
The legislation laid out Congress’s findings related to property rights that were infringed in the course of Fidel Castro’s revolution. It alleges that Castro confiscated property from millions of Cubans and thousands of Americans, plus thousands of Cubans who sought asylum in the United States and have since become citizens. The law was intended to be a channel for victims to seek damages where there is no sufficient remedy in international law.
The law is, probably intentionally, left very broad. Its primary provision, amongst many others, provides that anyone who “traffics in property which was confiscated by the Cuban Government on or after January 1, 1959, shall be liable to any United States national who owns the claim to such property for money damages…”
- Revival of a 25-year-old Statute
The reader may be questioning the timeliness of reviewing a 1996 law. When President Clinton signed the Helms-Burton Act into law, it was met with international disapproval. Mexico and Canada claimed that it violated NAFTA, while the European Union approved a regulation to protect against the extraterritorial application provision. This short article will not dive into the hairy framework of international civil liability, but rather the point of this article is merely to illustrate that aspects of the Helms-Burton Act, as written, likely violated international law, and as such President Clinton, seemingly conceding to this point, waived the Title III private right of action provision through the end of his presidency. Though the Act was never repealed, it has been consistently waived by every president since its enactment. President Obama pursued direct diplomacy with the Cuban government and even took steps to loosen economic sanctions.
President Trump, on the other hand, was critical of the Cuban government, and his opposition reached a new height when he chose in April 2019 not to renew the waiver of Title III, thereby authorizing an influx of claims on Cuban land. This action was allegedly a response to Cuba providing aid to Maduro’s regime in Venezuela. The pool of potential litigants is fairly significant. The BBC reports that there are 200,000 claims by Cuban-Americans who allege that their property was seized by Castro, plus about 6,000 certified claims by American citizens or companies who had land seized since 1959.
- Helms-Burton in Action: Garcia-Bengochea v. Carnival Corp.
The end of the Title III suspension meant the creation of a new private right of action. Immediately after the suspension was lifted, Javier Garcia-Bengochea sued Carnival Corp., the popular cruise line, in the United States District Court for the Southern District of Florida, claiming that he owned “an 82.5% interest in certain commercial waterfront real property in the Port of Santiago de Cuba.” The “trafficking” that the plaintiff alleges is that Carnival promoted its cruise line on the waterfront property and uses it to embark and disembark.
Carnival moved to dismiss the complaint for failure to state a claim, citing three arguments. First, there is an exception to liability under the Act for lawful travel, which Carnival argued would require the plaintiff to prove an additional element: that the use of the docks was not necessary to that lawful travel. Second, Carnival argues that the plaintiff’s claim that he is the “rightful owner” is still in question, being that the certified claim that the plaintiff submitted to support his complaint was in the name of a non-party to the litigation. Finally, Carnival raised the corporate law issue that even if Garcia-Bengochea owned an interest in the docks, it was by way of a non-citizen third-party company, La Maritima, which was the actual owner of the docks.
The district court disagreed with all of Carnival’s arguments. In short, the Court found that the lawful travel exception is an affirmative defense to the Act, meaning that the burden would fall on Carnival to prove that its use of the docks was incident or necessary for lawful travel. As to the issue of the plaintiff’s ownership, the Court found that the plaintiff could have acquired the property interest since the time of the certified claim, and nothing in the complaint is untrue on its face. Finally, as to Carnival’s claim that Garcia-Bengochea’s rights as a stockholder are not the same as a direct owner’s, the Court concluded that “there is no indication in the statute’s text that Congress was legislating with corporate formalities in mind.” The intent of the statute, according to the Court, was to deter trafficking in confiscated property, and because the company in which the plaintiff was a stockholder was also nationalized, it would undermine Congress’s goal and create an undesirable result. The motion to dismiss was denied.
This case is significant. Not only was it the first application of a long-delayed, highly controversial statute, but it also interpreted the Act so as to carry out Congress’s intention of broadly penalizing any company or entity using or profiting from confiscated land. In other words, the already broad language of the statute is now made even broader (and more subject to litigation) by the Court’s decision. For instance, by determining that the exceptions laid out in 22 U.S.C.S. at § 6023(13)(B)(iii) are affirmative defenses, the Court effectively held that the statute’s explicit exclusion of lawful travel from the definition of “traffic” was not sufficient on its face to exclude lawful travel from the scope of the liability provision. This holding opens every cruise liner from anywhere in the world that is operating on that particular dock to liability to the plaintiffs. Similarly, by declining to apply corporate law to “confine Helms-Burton,” the Court broadens the class of plaintiffs and confuses our traditional understanding of property ownership, where shareholders are distinguished from “rightful owners.” This may have been intentional on Congress’s part; the International Settlement Claims Act of 1949 was drafted with indirect owners in mind as well.
It is unlikely that the holding in Garcia-Bengochea’s motion to dismiss will open any figurative floodgates of litigation. The Act requires at least $50,000 in controversy before a claimant can sue, and, as the district court said in Garcia-Bengochea, “there is a strong possibility that many of these corporations no longer exist or are otherwise unable to assert claims on their own behalf.” Regardless of the volume of litigation, the implementation of the Act is a loud statement heard around the world, and the difficulty of enforcing the extraterritorial jurisdiction, even the United State’s closest trading partners, will likely be the real obstacle to the success of the Helms-Burton Act.
 House of Representatives, Meeting of the House Foreign Affairs Committee, Subcommittee on the Western Hemisphere, The Future of Property Rights in Cuba, Jun. 18, 2015, https://docs.house.gov/meetings/fa/fa07/20150618/103642/hhrg-114-fa07-wstate-garcia-bengocheaj-20150618.pdf.
 RESTATEMENT, THIRD, FOREIGN RELATIONS LAW OF THE UNITED STATES (REVISED), American Law Institute, § 402(1)(c) (1983).
 Claire Felter, Danielle Renwick, & Rocio Cara Labrador, U.S.-Cuba Relations, The Council on Foreign Relations (Mar. 7, 2019) https://www.cfr.org/backgrounder/us-cuba-relations.
 Clinton moves to punish Cuba for downing planes, CNN (Feb. 27, 1996) http://edition.cnn.com/US/9602/cuba_shootdown/27/10pm/index.html.
 22 U.S.C.S. § 6021 et seq. (LexisNexis, Lexis Advance through Public Law 116-56, approved August 23, 2019).
 See, e.g., Cuban Democracy Act of 1992 [22 USCS §§ 6001 et seq.].
 22 U.S.C.S. § 6082(a) (LexisNexis, Lexis Advance through Public Law 116-56, approved August 23, 2019).
 Id. at § 6081 (LexisNexis, Lexis Advance through Public Law 116-56, approved August 23, 2019).
 Id. at § 6081(3)(B)(i)-(iii).
 Id. at § 6081(11).
 Id. at § 6082(a)(1)(A).
 S. Kern Alexander, ARTICLE: Trafficking in Confiscated Cuban Property: Lender Liability Under the Helms-Burton Act and Customary International Law, 16 Dick. J. Int’l L. 523, 528 (1998).
 Id. at 528-29.
 Id. at 528.
 Council on Foreign Relations, supra, note 2.
 Garcia-Bengochea v. Carnival Corp., No. 1:19-cv-21725-JLK, 2019 U.S. Dist. LEXIS 144723 (S.D. Fla. Aug. 26, 2019).
 Id. at *4.
 22 U.S.C.S. at § 6023(13)(B)(iii).
 Garcia-Bengochea at *5.
 Id. at 7-20.
 Id. at 12.
 Id. at 13-14.
 Id. at 16.
 Id. at 19.
 Id. at 16.
 Id. at 17 (citing 22 U.S.C. § 1643c(a) (emphasis added)).
 22 U.S.C. § 6082(b).
 Garcia-Bengochea at *18.