Supreme Court considers fate of docks and other assets seized by Cuba in 1960

A photo provided by the Havana Docks Company shows a brochure from the 1950s advertising the company’s dock facilities in Cuba. Amid rising tensions with Cuba, the Trump administration is backing lawsuits that would allow Americans to get compensation for property confiscated by Fidel Castro’s regime. (Havana Docks Company via The New York Times)

By ANN E. MARIMOW

More than 60 years ago, Fidel Castro rose to power in Cuba and began confiscating the assets of all American-owned businesses, including the Havana Docks Co.. The port business was seized at gunpoint by revolutionaries and never compensated for its lost property.

But a change in policy during the first Trump administration allowed the company to sue major cruise lines for parking ships at the docks and bringing nearly a million people to Havana after rules were loosened in 2016 to allow tourism to the island. Filed in 2019, the case, and another involving similar claims from Exxon Mobil over its confiscated oil and gas assets, were heard Monday by the Supreme Court.

The cases land at a fraught time for U.S.-Cuba relations. The Trump administration has ratcheted up political and economic pressure on the communist country by crippling its tourism industry and cutting off access to fuel shipments.

The two cases involve discrete, narrow legal questions about the extent to which thousands of Americans can get compensation in U.S. courts from the entities that currently hold or profit from property taken by the Cuban government. But if the Supreme Court sides with the companies, it could also give the administration more leverage over Cuba.

“President Trump will be listening for the outcome,” said John S. Kavulich, president of the U.S.-Cuba Trade and Economic Council. A ruling that clears the way for the lawsuits, he added, could lead to less investment in the island and put “pressure on Cuba to make the changes Trump wants.”

During a lively discussion, the justices waded into contentious questions of presidential power and diplomatic relations with Cuba over the decades.

But after three hours, it was not entirely clear how the justices would resolve the distinct issues presented in the cases. Justices from across the ideological spectrum seemed sympathetic to Havana Docks’ claims that the company should be able to move forward with its lawsuit against the cruise lines.

Justice Amy Coney Barrett, who is often in the majority, referred to the seized assets as “kryptonite” and essentially off-limits for commercial use until the company has been compensated by the Cuban government. Justice Ketanji Brown Jackson agreed, calling the argument “pretty straightforward.”

Justice Department lawyers filed briefs in support of the port business and Exxon, telling the court that the suits, first authorized by Congress in the 1990s, have become an important foreign-policy tool for discouraging investment in Cuba.

The lawsuits “deter private actors from collaborating with that government to exploit expropriated property, deprive the Cuban government of funds that undermine the United States’ long-standing embargo of Cuba, and increase economic pressure to achieve democratic reforms in Cuba,” wrote D. John Sauer, the solicitor general.

The cruise industry says it acted lawfully and was following the lead of the Obama administration, which encouraged travel to Cuba during a brief period of renewed diplomatic relations starting in 2016. Cruise itineraries for Havana included visits to Ernest Hemingway’s home outside the city and outings to see dance performances. President Barack Obama declared the tours an opportunity for Americans to appreciate “the incredible history and culture of the Cuban people.”

A decade later, the Trump administration has taken a different tack, announcing tariffs against any country that sends oil to Cuba, stifling tourism and announcing that the communist government is “going down for the count.”

Before the Cuban revolution, American companies owned or controlled 90% of the island’s electricity generation, its telephone system, much of its mining industry, sugarcane fields, and many oil refineries and warehouses. Most confiscated assets were transferred to state-owned companies controlled by the government.

After the seizures, American investors filed claims with the U.S. government through the Foreign Claims Settlement Commission, an agency at the Department of Justice. In 1971, the commission certified Havana Docks’ claim of $9.1 million, or nearly $100 million adjusted for inflation, which remains unpaid. In total, the commission certified $1.9 billion in claims held by almost 6,000 claimants or about $9.3 billion in current value, according to the U.S.-Cuba Trade and Economic Council.

In 1996, Congress tightened the U.S. trade embargo after Cuban fighter jets shot down two planes flown by members of the Cuban exile group Brothers to the Rescue. Three U.S. citizens and one permanent resident were killed.

The Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton law, also included language declaring that resolution of the property claims should be a key condition for restoring economic and diplomatic ties with Cuba. It included a provision at issue in Monday’s court cases that provided a path for Americans to sue in federal court over the “trafficking” or use of assets seized by the Cuban government. Known as Title III, it also gave presidents an on-off switch to suspend or activate the litigation stipulations, which were politically and diplomatically controversial.

Until 2019, presidents of both parties had suspended that provision. The Trump administration chose to activate it, opening the door to the lawsuits. The decision came despite an intensive lobbying effort by Carnival Corp. and a team that included Pam Bondi, then a lobbyist who had just finished her second term as Florida’s attorney general and had developed a close relationship with Trump. European officials also objected, arguing that the move would harm their businesses.

Secretary of State Marco Rubio reaffirmed the administration’s commitment to allowing such lawsuits early last year.