Supreme Court to decide if Americans may sue over Castro’s Cuba

By John Fritze, CNN

(CNN) — The US Supreme Court agreed to wade into Cold War history Friday by granting an appeal from Exxon over the Cuban government’s confiscation of an oil refinery and other property Fidel Castro’s regime seized shortly after taking power.

The court also said it would decide a case involving an American company that claims the world’s largest cruise lines owe hundreds of millions of dollars for using a dock it built more than a century ago in Havana.

The litigation underscores a broad shift in Washington’s approach to Cuba from President Barack Obama’s administration, which had attempted to open ties, and the first Trump administration, which shut down those efforts. It may also portend a change in how the high court views the ability of Americans to sue foreign entities in American courts.

By the late 1950s, Standard Oil Company – later renamed Exxon Mobil Corporation – had extensive operations in Cuba, including the refinery, multiple product terminals and 117 service stations, all of which were taken by the Castro government and folded into two state-owned enterprises.

For decades, Exxon and other American companies have been blocked from suing for compensation in US courts. But a winding history with the issue in Congress – and a key decision made during the first Trump administration – have created an opening for that litigation to move forward.

An American commission in 1969 certified Standard Oil’s loss at nearly $72 million. With interest and Exxon’s request for triple damages, hundreds of millions of dollars may be at stake.

Nearly 6,000 individuals and businesses hold over $1.9 billion in claims certified by the commission, Exxon said, not including interest.

In a separate case dealing with the same law Congress passed dealing with confiscated property, a US company called Havana Docks Corporation built piers in 1905 for the Cuban government on the condition that it would operate – and capture revenue from – the port for 99 years. But Castro’s government seized the docks, along with other private property, following the island’s communist revolution.

The cruise lines, the company said, “nonetheless moored their massive ships at the confiscated docks without Havana Docks’ authorization.” In its appeal, the company described the case as the most important involving US foreign policy toward Cuba to reach the court’s docket in decades.

From 2015 to 2019, the company said, “the cruise lines disembarked nearly one million tourists on those docks, and paid Cuba’s cash-strapped Communist regime at least $130 million in hard currency without paying a penny to either Havana Docks or any Cuban person or entity unaffiliated with the regime.”

“The Cuban government never paid any compensation for the confiscated properties,” the company’s lawyer, Jeffrey Wall, told the justices in his appeal. “Like the thousands of other victims of the Castro regime, Exxon has been waiting since the early 1960s to receive compensation.”

The court is likely to hear arguments next year and hand down a decision by June.

Presidents had suspended seizure law

Responding to a 1996 incident in which Cuban fighter jets shot down two private planes in international airspace, Congress enacted a law that allowed US nationals to sue over seized property on Cuba in American courts. But the law included a catch: It allowed presidents to suspend the authorization of suits if he deemed it “necessary to the national interests of the United States.”

Every president since suspended the provision, until President Donald Trump lifted it on May 2, 2019. Exxon filed its lawsuit the same day.

But federal courts in Washington have slowed that effort as they have tried to reconcile the 1996 law with another law, enacted two decades earlier, that limits the ability of people to sue foreign governments in US courts. To bring its case, the DC Circuit ruled, Exxon must show that its claim meets one of the exceptions to the broad immunity foreign governments generally enjoy in American courts.

That is the issue Exxon asked the Supreme Court to wrestle with.

Congress and the federal judiciary have generally been hesitant to allow suits against foreign governments in domestic courts in part out of fear that foreign governments would respond by clearing the way for similar lawsuits filed abroad against the United States. Earlier this year, in a separate case, a unanimous court ruled that the families of victims of terrorist attacks in Israel could sue the Palestinian Authority in US courts.

The Trump administration urged the Supreme Court to take the case.

“The United States has compelling foreign-policy interests in ensuring that US nationals whose assets were illegally expropriated by Fidel Castro’s communist regime receive recompense and in preventing the Cuban government from further benefiting from its wrongdoing,” the Department of Justice told the court in a filing over the summer.

Corporación Cimex, one of the Cuban-owned entities that took over the property, warned that Exxon’s argument would have global implications. It argued that Exxon’s appeal is premature and that most people who sue would ultimately face a “slim to non-existent chance” of ever recovering the damages.

In the cruise lines case, the companies countered the original agreement between the docks company and the Cuban government would have expired in 2004. The cruise ships didn’t start pulling into Havana until 2016.

Because the company “only ever held a limited right to use the pier complex for a limited time (and in limited ways), that is all the Cuban government confiscated from it,” the cruise companies told the Supreme Court. “This case really is that simple.”

The Atlanta-based 11th US Circuit Court of Appeals sided with the cruise lines and the Havana Docks Corporation appealed to the Supreme Court in March.

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