Locke Lord QuickStudy: United States to Allow Lawsuits Arising from Property Confiscated in Cuba

Locke Lord LLP
May 2, 2019

Beginning May 2, 2019, U.S. Nationals may bring lawsuits in the United States against traffickers in property confiscated by the Cuban government.

During the Clinton Administration, the United States enacted the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, or Helms-Burton Act (22 U.S.C. §§ 6082-6085). Title III of the Helms-Burton Act created a private right of action arising from trafficking in property confiscated following the Cuban Revolution. Under the Act, any U.S. National who in 1996 owned a claim to confiscated property in Cuba may sue if the amount in controversy exceeds $50,000 (exclusive of costs, interest, and attorneys’ fees). The Act allows the Secretary of State to suspend the Act if the suspension is necessary to the national interests of the United States and will expedite a transition to democracy in Cuba.” Every administration since 1996 has suspended the Act, but in January 2019, Secretary of State Mike Pompeo announced a forty-five day suspension, and subsequent suspensions have been even shorter. In April, he announced that the suspension would end on May 2, 2019.

The Act defines trafficking and property broadly. “Traffics” has several exceptions, but it generally includes selling brokering, managing, leasing, possessing, or controlling certain property in Cuba, as well as engaging in any commercial activity benefitting from the property or profiting from trafficking committed by another person. Meanwhile, “property” includes intellectual property, real property, and personal property, although it generally excludes residential property.

The International Claims Settlement Act of 1949 creates a mechanism for adjudicating claims against foreign countries. Where the Foreign Claims Settlement Commission has previously adjudicated a claim later asserted under the Helms-Burton Act, the claim will have a value of at least the certified amount determined by the commission. Almost 9000 claims were brought, with almost 6000 claims certified, totaling $1.9 billion, which suggests the potential scope of looming litigation once the suspension lifts on May 2.