February 6, 2023

Volume XIII, Number 37

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February 03, 2023

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Title III Lawsuits Are Coming: Is Your Company or Client Ready?

Earlier this year, President Trump chose not to extend the suspension of Title III of the 1996 Cuban Liberty and Democratic Solidarity (LIBERTAD) Act (also known as the Helms-Burton Act). For more information, see our GT Alert, Trump Administration Cracks Open Door to Private Law Suits Against Cuba with Partial Libertad Act Title III Implementation, dated March 19, 2019.

In 1996, Congress passed Title III to strengthen international sanctions against the Cuban government and “protect United States nationals against confiscatory takings and the wrongful trafficking in property confiscated by the Castro regime.” 22 U.S.C. §6022(6). “To deter [such] trafficking,” Congress found that “the victims of these confiscations should be endowed with a judicial remedy in the courts of the United States that would deny traffickers any profits from economically exploiting Castro’s wrongful seizures.” 22 U.S.C. §6081(11).

Specifically, Title III provides U.S. nationals with a private right of action in U.S. federal courts against persons or entities that “traffic in property which was confiscated by the Cuban Government on or after January 1, 1959.” 22 U.S.C. §6082(a)(1)(A).

Notwithstanding that Title III was passed in 1996, the private right of action had never been implemented because every president had postponed the enactment of Title III for consecutive six-month periods – in part because many foreign governments objected to the idea that non-U.S. companies could be sued in U.S. federal court because of their commercial dealings with Cuba.

With the current administration’s decision to end the suspension, a number of key questions have been raised:

What is an Eligible Claim?

Eligible claims generally fall into two categories: (i) certified claims, which are claims by persons who were U.S. nationals at the time of the Cuban revolution in 1959 from whom the Castro regime expropriated property in Cuba, and who have had their claims certified through the Foreign Claims Settlement Commission under the International Claims Settlement Act of 1949; and (ii) uncertified claims, which are claims by persons who were Cuban nationals at the time of the revolution from whom the Castro regime expropriated property, and who subsequently became naturalized U.S. citizens.

How Many Actual Suits Could Be Filed?

Since May, more than 10 actions have been filed, but we are aware of numerous other claims that have been noticed and likely will be filed in the near future. The U.S. Foreign Claims Settlement Commission previously certified nearly 6,000 claims, and legal scholars speculate that the number of potential claims is as high as 200,000.

How Many Claimants Have Sufficient Evidence to Bring Suit?

Cuban-American families whose properties were expropriated by the Cuban government would be required to provide evidence of their claims. Many of these families do, in fact, retain such records, which is evidenced by the nearly 6,000 claims that previously were certified.

Are There Defenses to a Title III Action?

There are numerous potential defenses to claims brought under Title III, including, but not limited to: personal jurisdiction, statute of limitations, blocking statutes, challenges to title and international legal issues. As these cases are only starting to be filed, it is unknown how this litigation will play out, but there are a number of legal and constitutional issues that already have been raised. In addition, the validity of each claim needs to be carefully evaluated, as many claims will not meet the threshold requirements, including the amount in controversary necessary to proceed.

What Should a Company Do If It Receives Notice of a Potential Lawsuit?

We expect that many companies – both non-U.S. and U.S. companies – doing business in Cuba will receive notice of potential claims against them in the near future. Simply because a company is doing lawful or licensed business in Cuba does not necessarily protect it from a Title III action. Companies need to be vigilant in determining their risk. It is important to speak with an attorney familiar with Title III, as there may be a presumption of damages, and a plaintiff may be allowed to recover treble damages in addition to the amount of the claim, plus interest and attorneys’ fees.

©2023 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume IX, Number 273

About this Author

Kara Bombach, Greenberg Traurig, Washington DC, International Trade and White Collar Defense Attorney

Kara Bombach assists companies to lawfully export goods, technology and services around the globe. She places significant emphasis on helping clients achieve practical, workable solutions to complex regulatory situations arising under anti-corruption and anti-bribery measures (U.S. Foreign Corrupt Practices Act (FCPA) and OECD Convention), export control laws (EAR and ITAR), anti-boycott laws, and special sanctions (embargoes) maintained by the U.S. government (OFAC and other agencies) against various countries (including Iran, Cuba and Sudan), entities and individuals....

Brigid F. Cech Samole Miami Shareholder Appellate practice Bankruptcy appeals Environmental and land use litigation Financial regulatory and compliance Litigation trial support

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Yosbel Ibarra, Greenberg Traurig Law Firm, New York and Miami, Corporate Law Attorney

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Fluent in Spanish, Yosbel has spent his career advising clients doing business in the United States, Spain and across Latin America. He is consistently recognized...

Michael N. Kreitzer Shareholder Miami Litigation Trial Practice

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Francisco O. Sanchez SHAREHOLDER GT Law Litigation International Arbitration & Litigation White Collar Defense & Special Investigations Trial Practice Latin America Practice

Francisco is a business litigator who focuses on assisting clients in resolving disputes and achieving business objectives in the most cost-effective manner possible. In addition to handling complex commercial matters of various types, including federal and state court litigation, administrative proceedings, and international and domestic arbitrations, Francisco's practice includes conducting internal corporate investigations and advising clients regarding a variety of regulatory compliance and other internal corporate issues. Francisco's current client base consists of a variety of...