U.S. Supreme Court resolved dispute over property Cuba confiscated in 1960

Last week the U.S. Supreme Court allowed the recovery of hundreds of millions of dollars from the world’s largest cruise lines for berthing their liners at Havana docks that Fidel Castro’s regime illegally seized back in 1960.

Background

The story stretches back to the early 20th century. In 1905 the Cuban government granted a 50-year usufruct concession (Google it yourself) to build docks in the Port of Havana. In 1928 that right passed to the American company Havana Docks Corporation. The concession was extended to 99 years — meaning the company had the legal right to operate the port until 2004.

On January 1, 1959, Fidel Castro came to power and his government issued a decree for the forcible seizure of American property. In 1960 armed agents of the Cuban government seized the Havana Docks. The concession was terminated early, with no compensation. A commission at the U.S. Department of Justice then certified the company’s losses at $9 million. Adjusted for inflation and interest, that sum now approaches nearly $100 million.

For decades the American owners had no legal tools to recover what they had lost.

The situation changed in 1996. That year Cuba shot down two American civilian planes (for which, incidentally, the U.S. just yesterday filed charges against Fidel’s 94-year-old brother — Raúl Castro). Under intense political pressure, President Clinton signed the Cuban Liberty and Democratic Solidarity Act, known as the Helms-Burton Act. It gave U.S. citizens the right to sue anyone who conducts commercial operations with confiscated Cuban property.

The key element of liability is that a company must use the confiscated property knowingly and intentionally. The cruise lines plainly knew that the docks had been confiscated by the Castro regime. Moreover, Havana Docks officially notified them of its claim to the property. They all ignored that notice and continued to berth ships there.

The law was passed in 1996, but suits were not filed until 2019. Why?

Because the law left a loophole for the White House. Presidents could suspend the right to sue. That was permissible if doing so (1) was necessary to protect U.S. national interests; and (2) would advance Cuba’s transition to democracy. Every six months (typically mid-January and mid-July) beginning in 1996, administrations renewed that moratorium. Officially this was justified by national-interest concerns, but the real motivation, of course, was different.

When the U.S. passed the Helms-Burton Act, America’s main allies — the European Union, Canada and Mexico — were not pleased. They had large investments in Cuba and believed the U.S. had no right to punish foreign companies for conducting legal business in Cuba. The EU lodged a complaint at the World Trade Organization, and Canada and Britain enacted so-called blocking statutes. Those statutes expressly prohibited their companies from complying with the U.S. law and allowed them to bring counterclaims against U.S. companies in European courts to offset damages.

To avoid an economic rift with its closest allies, the Clinton administration struck a tacit deal with the EU: Europe would suspend the WTO matter, and the U.S. president would guarantee that Title III — the private right of action — would never be unblocked.

In 2015–2016 the Obama administration pursued a thaw with Cuba. Passenger sea travel was permitted without special licenses. Four giants — Royal Caribbean, Norwegian, Carnival and MSC — began running voyages. From 2016 to 2019 they carried nearly one million passengers to Cuba and paid the Cuban regime at least $130 million in fees for berthing at the Havana Docks.

The Case

In April 2019 President Trump decided to abandon that practice. He declined to sign another six-month waiver, and in May the right to sue was unblocked. Havana Docks immediately sued the cruise lines.

In 2022 the trial court ordered each of the four cruise companies to pay more than $110 million; in 2024 the appellate court reversed that judgment based on the expiration of the concession, until the Supreme Court effectively nullified the appellate arguments and sent the case back for further proceedings.

Justice Clarence Thomas, writing for the majority, emphasized that the statute punishes the use of property that has become “tainted property” by virtue of a prior confiscation. The text of the statute protects not an abstract property right but penalizes the use of the very physical thing that was stolen. The Cuban government confiscated the physical docks, depriving the company of control over them. Because the cruise lines used that “tainted” property to obtain commercial profit, they bear direct liability to Havana Docks.

The lone dissenter was Justice Elena Kagan. Her reasoning rested on the temporal limits of property rights. She likened Havana Docks’ usufruct concession to an ordinary lease that expired in 2004. In her view, the company lost only 44 years of its right to use the docks (not the docks themselves, which always belonged to Cuba). Since the cruise ships arrived more than a decade after that right would have lapsed, Justice Kagan considers the company’s claims unfounded.

In a separate concurring opinion (joined by Justice Kavanaugh), Justice Sonia Sotomayor agreed with the majority but warned of risks. She noted that extracting more than $100 million from each company for initial losses of $9 million could implicate the constitutional right to due process because the awards may be disproportionate. She also urged lower courts to consider that under the Obama administration those cruises were treated as “lawful trips,” and it is legally dubious to punish businesses for conduct the government previously permitted.

The decision creates a precedent for thousands of other U.S. citizens and corporations — including giants like Exxon Mobil — whose assets Cuba expropriated in the 1960s. The justices have not yet issued a decision in a second, similar case concerning Exxon Mobil’s claims over its confiscated oil and gas assets on the island.

I know you’re eager to read the full opinion: https://www.supremecourt.gov/opinions/25pdf/24-983_c07d.pdf