A US cruise ship docks in Old Havana, Cuba in November 2018.
Miami Herald
A federal judge has ordered four Florida-based cruise ships bound for Cuba to pay more than $400 million in damages to an American company that compromised some harbor piers in Havana illegally seized by Fidel Castro in 1960. The first such decision within the framework of the law punishing the “trade in stolen property” in Cuba.
Friday’s long-awaited ruling by US District Judge Beth Bloom follows another series of rulings in March that found the four companies – Carnival, MSC SA, Royal Caribbean and Norwegian – engaged in “trafficking” and engaged in “prohibited tourism”. By ferrying US travelers to Cuba and using Castro-confiscated Havana port facilities.
The Cuban government has never compensated Havana Docks, an American company that has legal rights to the facilities and whose property claim was approved by the US Department of Justice’s Foreign Claims Regulatory Commission.
According to the settlement, four cruise lines registered outside the United States but with their principal place of business in Florida will have to pay Havana Docks a total of $439 million plus attorneys’ fees and costs. Each company was ordered to pay the original property claim amount plus simple interest for decades.
But that number is even higher because Cuba’s law that punishes the use of confiscated property, the Helms-Burton Act of 1996, or the Libertad Act, allows for triple the amount of damages awarded in court.
“The defendants’ crimes in these cases have been established, and the Court has determined that the Defendants have derived significant amounts of income from their illegal human trafficking activities and to the detriment of the Plaintiff – hundreds of millions of dollars each,” the judge wrote. “As the defendants suggest, a lower award would not serve an effective deterrent purpose because a lower award could simply be considered a cost of doing business.”
The main provision in the Helms-Burton Act that allowed lawsuits against those who used illegally confiscated property in Cuba, called Title III, was suspended by every president after Bill Clinton signed it until Donald Trump took office. Breaking with tradition, Trump enacted it in 2019, opening the door to multiple lawsuits.
Still, doubts persisted that the plaintiffs, mostly Cuban and American heirs to companies expropriated in the 1960s, would be able to overcome all the legal hurdles involved in these complex cases and find favor in court.
Although Friday’s ruling could be appealed, it proves that at least some Helms-Burton lawsuits can win and result in millions of dollars in judgments, giving hope to Americans, and especially Cuban-American families, who have been hoping for years. Compensation for Castro’s actions. At the same time, the multimillion-dollar fine sends another chilling message to potential investors and those seeking to do business on properties whose ownership is in dispute with the Cuban government.
“This is a very important ruling by Judge Bloom,” said Bob Martinez, head of Havana Docks’ legal defense team and a partner at the Colson Hicks Eidson law firm in Coral Gables. “The commercial use of property seized in violation of US law in Cuba has clearly detailed and well-known and publicized legal consequences. After decades of pursuing their legal rights, Havana Docks is one step closer to justice. Havana Docks appreciates Judge Bloom’s thorough and careful review of the facts and the law.”
The case has also been closely watched because it sets a precedent for lawsuits against travel providers such as cruise lines and airlines. Those companies tried to argue in court that they were authorized by the Barack Obama administration to do business with Cuba and that their dealings were covered by the “legal travel” exception to the embargo rules.
But the judge rejected the defense after lawyers for Havana Docks presented evidence of tourist activities offered by cruise lines to their passengers, usually through hired Cuban state tourism agencies.
Although some sanctions were eased during the short-lived détente with Cuba under Obama, tourism to Cuba was then, and remains, prohibited. The cruise to Cuba started in 2015 and ended in June 2019.
“The fact that the Treasury Department issues travel licenses and that executive branch officials, including the president, encourage Defendants to do so does not automatically immunize Defendants from liability if they engage in tourism prohibited by law,” the judge wrote in March.
Hundreds of court documents reviewed by the Herald showed that cruise lines offered excursions to the beach, the Tropicana cabaret in Havana and cocktail-making classes to learn how to make mojitos. An “educational trip to promote people-to-people” connections, a legal travel category called by cruise lines to take Americans to Cuba.
According to records, the companies generated at least $1.1 billion in revenue and paid $138 million to Cuban government agencies.
A Carnival spokeswoman told the Herald she did not believe the company’s actions were wrong.
“Carnival Corporation engages in lawful travel that is publicly licensed, authorized and promoted by the United States government,” said Jody Venturoni. “We strongly disagree with both the decision and the sentence and plan to appeal these decisions.”
The parties have been engaged in bitter litigation for more than two years over whether cruise lines based in the port of Havana can “traffick” confiscated property. Havana Docks owns a 1934 concession to operate three jetties, which have been approved by the US government for lost asset claims and used as cruise terminals that welcomed American travelers decades later in Havana Harbor.
Norwegian, MSC SA and Royal Caribbean did not immediately respond to emails seeking comment.
This story was originally published December 30, 2022 at 8:53 p.m.