Cuban Litigation Crisis: Helms–Burton Title III Activated
April 29, 2019
Kegler Brown Cuba Practice Update
On Wednesday, April 16, 2019, President Trump ended the suspension of Title III of the Helms-Burton Act (which every president had suspended since its enactment in 1996), effectively authorizing lawsuits in U.S. courts against persons or companies “trafficking” in property seized during the 1959 Cuban Revolution.
Impact of the Policy Shift
The private cause of action permitted under Title III is broadly defined to include claims against anyone who “traffics” in expropriated property, where “trafficking” is defined to include, among other things, engaging in transactions and other commercial activity with respect to “confiscated” property.
Arguably, the activation of Title III puts anyone who has done or is doing business in Cuba at risk of being sued to the extent any property nationalized by the Cuban government is being used in the transactions.
Lifting the ban on Title III may result in billions of dollars in lawsuits across the United States because, in addition to the broadly defined cause of action, Title III permits recovery of the current market value of the expropriated property, treble damages, as well as attorney’s fees and court costs.
The precise limits of Title III are undefined because Title III has been suspended since its inception and legal claims have never been brought under its authority. The uncertainty created by the Trump Administration’s enforcement of Title III has caused much concern among U.S. and international companies doing business in Cuba, and the move has been widely denounced by Cuba, Canada and the European Union, as well as the U.S. Chamber of Commerce, which cited fear that “American companies will now be subjected to countersuits in Europe, Canada, Latin America, and elsewhere.”
What Can You Do?
Although there is a lot of uncertainty related to legal claims brought under Title III, there are still steps you can take in anticipation of defending potential claims, such as:
- Seeking legal counsel if you are currently doing or contemplating any business or other activities in Cuba;
- Including provisions in contracts that require disclosures of activities in Cuba that may constitute “trafficking in confiscated properties”;
- Requesting indemnification for claims arising under Title III, and other similar provisions; or
- Preparing a plan of action for responding to Title III claims and the defenses thereto (such as personal jurisdiction, standing, amount in controversy, validity of Cuba property claims and other statutory and legal defenses).
Kegler Brown has been actively involved with Cuba for a number of years, counseling U.S. and foreign companies and investors engaged with Cuba in diverse fields such as aviation, fashion, manufacturing, education, pharmaceuticals, and the arts.
For more information pkease visit Kegler Brown’s Focus on Cuba.