CUBA Trends and Developments Contributed by: Martin Domb, Pedro A. Freyre, Augusto E. Maxwell, Christopher Carver and Lorayne Perez, Akerman LLP
Fernandez v Seaboard Marine Odette Blanco de Fernandez and her four siblings’ heirs and estates sued Seaboard Marine under the Helms-Burton Act for allegedly trafficking in property confiscated from their family’s two companies – Azu- carera Mariel, S.A. and Maritima Mariel, S.A. – by shipping frozen chicken to a container terminal on the west side of Mariel Bay, Cuba. The district court entered summary judgment in favour of defendant Seaboard Marine. The plaintiffs appealed. The Eleventh Circuit held that the district court cor- rectly found that the heirs and estates could not bring a claim because they acquired their claims by inheritance after the statutory bar date of 12 March 1996. With respect to the estates in particular, the Court rejected the argument that, under Florida law, the deceased siblings still retained ownership of the claim. The Court applied the assumption that when Congress enacts a statute, it does not make its appli- cation dependent on state law. The Court also inter- preted Florida law as vesting the decedent’s intestate property in the estate upon the decedent’s death. The Eleventh Circuit further held that shareholders of corporations may bring Title III claims where prop- erty of the shareholder’s corporation was confiscat- ed. However, as it did in the Havana Docks case, the Court examined the exact contours of the property interests at issue to determine whether the defendant trafficked in that property. It held that Seaboard did not traffic in Maritima’s property – a 1955 concession granting Maritima the right to exploit port facilities in Mariel Bay – because the concession did not afford Maritima the exclusive right to develop all future docks in the bay. With respect to Azucarera’s property – ownership of thousands of acres of land on the west side of Mariel Bay – the Court reversed, holding that genuine issues of material fact precluded summary judgment in favour of Seaboard. The Act’s definition of traffics includes “engag[ing] in a commercial activity using or otherwise benefitting from confiscated property”. The Court held that a reasonable jury could find that Seaboard “otherwise benefit[ted]” from Azucarera’s confiscated property because, without it, the terminal used by Seaboard could not have been built by the
All three defendants moved to dismiss under the FSIA, arguing that they are immune from suit because none of the FSIA’s exceptions to immunity applies. The trial court deferred decision as to two of the defend- ants pending jurisdictional discovery concerning their activities, but denied the motion as to CIMEX. CIMEX appealed and Exxon cross-appealed to the Court of Appeals for the District of Columbia Circuit. In last’s year’s update, our firm detailed the DC Cir- cuit Court’s decision. Two judges on the panel held that “plaintiffs bringing Title III [Helms-Burton] actions against foreign states must satisfy one of the FSIA’s exceptions, which is the same condition any litigant seeking to sue a foreign sovereign must meet”. The exception applicable to the case, the Court held, was the commercial activity exception, under which the direct effects clause had to be satisfied, which has three requirements: (i) there must be an act outside the US, (ii) in connection with commercial activity by the foreign state elsewhere, and (iii) the act must cause a direct effect in the US. There was no dispute that the first element was met, and the Court found that the second element was likewise satisfied. The case was remanded for the trial court to determine whether CIMEX causes such direct effects in the US to meet the third element of the commercial-activity excep- tion. The dissenting judge, however, contended that Helms- Burton is itself a grant of jurisdiction which “deprives the Cuban defendants of immunity from suit”. The Act’s text on which the dissenting judge relied states that “any person,” defined to include “any agency or instrumentality of a foreign state,” that traffics in con- fiscated property “shall be liable” to US nationals with claims to that property. Exxon filed a petition for a writ of certiorari with the US Supreme Court on the issue of whether the Helms- Burton Act abrogates foreign sovereign immunity in cases against Cuban instrumentalities, or whether par- ties proceeding under the Act must satisfy an excep- tion under the FSIA. As noted above, the Supreme Court will decide this question during the current term.
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