FEDERAL JUDGE REFUSES TO DISMISS HELMS-BURTON SUIT AGAINST CARNIVAL CRUISE LINES
September 19, 2019
Plaintiff Javier Garcia-Bengochea, who is a descendant of a Cuban business owner, recently sued Miami-based Carnival Corporation for doing in business in Cuba using assets that were expropriated by the Fidel Castro government under a newly activated provision of the 1996 Helms-Burton Act — or Libertad Act — that allows U.S. nationals and naturalized Cubans to seek damages for property seized by Cuba’s government after the communist revolution in 1959. Since the Libertad Act was passed in 1996, U.S. administrations have historically declined to let certain portions of the Act to take effect, for fear of angering trading partners whose businesses are tied to Cuba. The Trump administration reversed this trend, and effective May 2, 2019, those portions of the Act that had been stayed by prior administrations became effective.
Plaintiff filed suit on that same day, arguing that it had a certified claim to port buildings and piers in Santiago de Cuba where Carnival cruise ships have docked since 2016, following the Obama Administration’s loosening of Cuba travel related restrictions. On May 30, the Cruise line filed a motion to dismiss the case, arguing that the Libertad Act did not define trafficking to mean using docks for “lawful travel to Cuba,” and that General Licenses from the U.S. Department of Treasury’s Office of Foreign Assets Control gave it sufficient permission to operate cruises to Cuba and to do business there.
On August 26, 2019, the United States District Court for the Southern District of Florida denied Carnival’s request, stating Based on the text and structure of Helms-Burton, the Court holds that the lawful travel exception is an affirmative defense to trafficking that must be established by Carnival, not negated by Plaintiff” and that “…Carnival’s reading of the statute would substantially undermine Congress’s goal of deterring trafficking.” Immediately following the Court’s decision, on August 28, 2019, the former owner of the Havana Cruise Port Terminal sued three additional cruise lines (Norwegian Cruise Lines, MSC Cruises, and Royal Caribbean Cruises) under the Libertad Act. We expect to see this trend continue, especially if the plaintiff succeeds against Carnival Corporation.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Alexander Matthews (amatthews@eckertseamans.com or 202-659-6633).
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