By: Néstor Enrique Cruz

In 1996, the U.S. Congress passed the Helms-Burton Act. Title III of the Act allows U.S. citizens whose property was confiscated by the Cuban government after 1958 to sue European and Canadian companies profiting from their property. By its terms, Title III did not go into effect immediately. Rather, Congress left the discretion to activate Title III to the President. Title III was enacted to “deter trafficking in wrongfully confiscated property” and provide “United States nationals who were the victims of these confiscations . . . with a judicial remedy in the courts of the United States.”

In May 2019, the President activated Title III for the first time since the Act’s enactment, and several lawsuits were filed against companies trafficking in confiscated property. On August 2, 2021, the Court of Appeals for the Fifth Circuit decided Glen v. American Airlines. The plaintiff alleged the Cuban government confiscated Varadero beachfront property from his mother and aunt after the 1959 revolution. After the confiscations, four resort hotels were built on the property. He inherited the property after 1999. He stated American Airlines “trafficked” in the four hotels built on the property by allowing travelers to use an American-branded website to book rooms at the hotels.

Under the Act, a plaintiff may not sue based on a claim to property confiscated before the statute was enacted unless the plaintiff “acquires ownership of the claim before March 12, 1996.” The Northern District of Texas dismissed the complaint on several grounds, including finding that the plaintiff acquired his claim to the confiscated property by inheritance after the statutory deadline.

Plaintiff argued that the phrase “acquires ownership of the claim” should not include acquisition by inheritance. The Court rejected the argument as inconsistent with “the plain text of the statute.” I believe this decision is incorrect on four grounds.

First, Helms-Burton is a remedial statute. Such laws are interpreted broadly to effectuate the purposes of the Act. In the case of Title III, the U.S. Congress wanted to compensate property owners in Cuba whose property had been confiscated and was being exploited by others. In Cuba, most hotels are operated as joint ventures between the government and European or Canadian companies that profit from confiscated property. Provisions of the statute should be interpreted as a whole in light of the objectives “to deter trafficking” and to provide “a judicial remedy” in U.S. courts.

Second, Title III was passed to protect property rights. However, property rights are meaningless unless the owner can give the property to beneficiaries after their death. The Act was passed in 1996, that is 37 years after the revolution. A young property owner, say, 25 years old in 1959, would have been 62 in 1996. Given longevity, many Helms-Burton claimants will, in fact, have acquired ownership of the claim after 1996 if the term “acquired” is interpreted very narrowly. This is precisely what happened in this case.

Third, even if a claimant has acquired ownership of the claim before 1996, his beneficiaries will probably have acquired ownership after 1996. Under the Court’s interpretation, this would mean that after a couple of generations, Helms-Burton actions will be barred. Since the Act tries to remedy confiscation of property by force of arms, the only way to correct such a wrong is to give heirs and beneficiaries a future right to title to the property forever. The intended beneficiaries were not just the immediate property owners but also their descendants. Beneficiaries or heirs acquire ownership of a claim by virtue of their status, which was decided between 1959 and 1996, even if the beneficiary or heir was born after 1996.

Fourth, Title III attempts to deter companies from using confiscated property for their own benefit without compensating the rightful owners. It would seem contradictory to allow such deterrence to lapse just by the passage of time. Congress is always quite busy, so sometimes statutory language is not as precise as it could be. Courts should attempt to make sense of Congressional enactments with a view to their specific purposes, rather than tell Congress: “we do not like the way you wrote this; please fix it.” Following the Court’s interpretation, foreign companies will be free to profit confiscated property without fear of being sued after a couple of generations.

This is especially important given that until 2019, the Presidents of the U.S. had waived Title III for a long time. We do not know when another waiver will come into effect, so it is vital for a family line to keep ownership of the claim to confiscated property until a lawsuit might be permitted.

It thus appears for several reasons the Court has misconstrued the purpose of the Act and has defined terms in contravention of Congressional intent. We do not know if this case will reach the Supreme Court. That might depend on whether another Circuit decides to the contrary or whether all Circuits follow this decision, but the Supreme Court disagrees. Finally, it might also depend upon whether plaintiffs have the funds to litigate. However, I believe that if enough plaintiffs seek certiorari (permission to appeal) before the Supreme Court, the Court might decide to clarify this area of the law.

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Tom Dunlap is a partner at Dunlap Bennett & Ludwig. Tom’s practice focuses on patent, trademark, trade secret, commercial, entertainment law, business, government contracts disputes, litigation, and transactions. Tom has authored numerous books and appeared on national television and radio, including Fox, Sundance T.V., and NPR, speaking on various subjects in his fields of practice. In addition to the state and federal courts of D.C., VA, and M.D., he is a member of the Federal Courts in Puerto Rico, Colorado, and Texas, as well as the Court of Federal Claims, the Federal Circuit, where he has recently argued and won three appellate matters, the Veteran’s Court of Appeals, and the United States Supreme Court, where he was lead counsel on a False Claims Act case (See United States ex rel. Carter v. Halliburton Co.) and in the T.C. Heartland LLC v. Kraft Foods Group Brands LLC (U.S. May 22, 2017) (No. 16-341) case involving jurisdiction in patent infringement cases. Other recent litigation victories where Tom served as lead trial counsel include a $12,317,500 verdict in Zuru v Telebrands et al. (EDTX 2017) (patent infringement) and a $2,600,000 verdict in DPX Gear v Prince et al. (Loudoun Circuit Court 2017) (breach of contract & fraud).

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