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Suppose, as the Trump administration seems to think, the current Cuban government collapses, and the new leadership seeks normal relations with the United States. One side effect we've perhaps not heard enough about would be the ensuing lawsuits. We already knew there might be a lot, as those whose property was taken after the 1959 revolution seek recompense from the regime. Thanks to a case decided by the Supreme Court last week, there could be a lot more, as corporations seek recompense from each other.
The case in question is Havana Docks Corporation v. Royal Caribbean Cruises, where the justices voted 8-1(1) to revive a lawsuit involving a concession to operate in Havana Harbor granted back in 1928 - and which expired in 2004. In between, in 1960, the regime nationalized the property involved, as part of Fidel Castro's response to US "economic aggressions" - his favored term for the sanctions imposed by the Eisenhower administration. As for the lawsuit itself, it wasn't filed until 2019, and the defendants weren't members of the Cuban government; they were four international cruise lines that between 2016 and 2019 carried millions of passengers to Cuba, paying the regime hundreds of millions of dollars.
Wait. Didn't I just say the concession expired in 2004?
Well, yes. But this is Cuba; and so, as always, the legal picture is murky.
Under a federal statute enacted in 1996, anyone who "traffics" in property taken by the Cuban government after the 1959 revolution can be sued for damages by the original owner. But for a long time, no former owner exercised that right. The same legislation gave the president the power to suspend the ability of plaintiffs to sue, a power exercised by Presidents Clinton, Bush and Obama, each of whom sought to improve relations with the Castro regime. In 2019, President Trump reversed the suspensions; once more, US nationals could seek damages from those who made money from property expropriated by the Cuban regime.
That same year, Havana Docks filed its lawsuit, arguing that under the 1928 contract, it built port facilities in Havana, for which it was supposed to be able to take profits for 75 years. According to the plaintiff, by using the docks, which were expropriated by the regime in 1960, the cruise lines were trafficking in its stolen property. The defendants countered that by the time they began sailing into Havana, they weren't trafficking in anything owned by the plaintiff, because, as mentioned, the deal between Havana Docks and the Cuban government expired in 2004.
The trial court ruled for the plaintiff, and granted staggering damages of $100 million against each cruise line. The court of appeals ruled otherwise. The Supreme Court's reason for reinstating the suit is stated right at the start of Justice Thomas' majority opinion:
Havana Docks did not have to prove that the cruise lines interfered with a property interest that would have existed in the counterfactual scenario in which the Cuban Government did not confiscate it. Instead, Havana Docks had to prove only that the cruise lines used confiscated property - such as the docks - to which Havana Docks owns a claim.
Put otherwise, since Castro expropriated the property before the contract expired, the claim continues to exist until - presumably - either the docks are returned or the Cuban government pays damages.
That last proposition matters. By most calculations, claims by US firms for expropriated property run into the billions. If the island is indeed reopened for business in a serious way, those who hope to charge in might have to be wary, lest they turn out to be trafficking in someone else's property within the meaning of the statute.
Even if the rights to the property seem to have expired long ago.
The case isn't over. The majority opinion left a number of technical issues to be wrangled over by the lower courts. Nevertheless, the central holding - that expiration dates on old Cuba deals don't necessarily count - is going to lead to increased litigation.
There's an irony here. As the majority notes, the legislation that led to the current lawsuit was enacted in 1996, after "Cuban fighter jets shot down two unarmed American civilian airplanes over international waters." The planes were part of Brothers to the Rescue, which patrolled the Florida Straits to help refugees fleeing the Havana regime. It was for allegedly ordering that precise attack that Cuban patriarch Raúl Castro was indicted for murder last week by a federal grand jury. Without indulging the fallacy of synchronicity, we might fairly say that quite apart from the sanctions that are taking a heavy toll on the island, US law seems to be trending against the Cuban government.
If indeed the pressure leads to the collapse of the regime, and if, as many predict, US companies rush in, the lawsuits for trafficking in expropriated property are sure to follow.
(1) The lone dissenter was Justice Kagan, whose closely reasoned opinion will delight lawyers who read it, although others might find its intricate structure bewildering.
Stephen Lisle Carter is an American legal scholar who serves as the William Nelson Cromwell Professor of Law at Yale Law School. He writes on legal and social issues.