Cuba Lawsuits Could Threaten Future Flights To Island
American Airlines has become the first U.S. air carrier to be sued under the revived Helms Burton Act that allows legal action against companies that do business in Cuba involving expropriated properties. In a civil lawsuit filed last week in Miami federal court, the heir to the property that is now José Martí International Airport accused American and its Chilean partner, LATAM Airlines, of “unlawful trafficking in the Airport, by arriving and departing the Airport and using its facilities for cargo and passenger transport.”
The plaintiff in the suit, José Ramon López Regueiro, is the son of José López Vilaboy, who purchased the airport from Pan American Airways in 1952 for $1.5 million, according to the suit. López Vilaboy, reportedly a close business associate of Cuban strongman, Fulgencio Batista, fled Cuba the day after Batista was overthrown by the Castro-led revolution. The airport was soon confiscated by the Castro government.
The legal ability of Cuban-Americans to file claims against U.S. and foreign companies whose businesses in Cuba involve expropriated properties was authorized in legislation passed in 1996, sponsored by Sen. Jesse Helms and Rep. Dan Burton. Fearing the chaotic impact of thousands of lawsuits on the international trade system, President Clinton insisted on attaching a waiver provision for the Title III section on the lawsuits. For 23 years, every president routinely waived Title III, including President Trump.
But, as part of an expanding set of sanctions against Cuba, the Trump administration allowed the implementation of Title III in March.
Since then, more than a dozen lawsuits have been filed in U.S. courts against various U.S. and international companies, among them the Spanish Melia hotel corporation and Expedia.com. The first suit, filed on May 2 by the heirs to property around the port of Havana, targeted the Carnival Cruise line corporation for docking at the port.
In another major suit in May, Exxon Mobil Corp. filed claims against Cuba’s state petroleum companies, CUPET and CIMEX S.A., for $280 million, claiming “unlawful trafficking” of “confiscated property.” Cuba’s main oil refinery was the first U.S. property expropriated by Fidel Castro in 1959.
In response to the Exxon Mobil suit, the Cuban government has hired the New York law firm Rabinowitz, Boudin, Standard, Krinsky & Lieberman, which promised to “vigorously defend” their Cuban clients.
In addition to the lawsuit filed against American Airlines and LATAM last week, another suit was filed against Amazon.com for selling Cuba-imported charcoal. The charcoal, manufactured on 2,000 acres of farmland that was expropriated after the revolution, represents the first product that Cuba directly exported to the United States under an Obama-era exemption to the trade embargo that authorized the export of goods from private sector enterprises on the island.
Trade analysts have predicted that the lawsuits could have a chilling effect on foreign investment on the island. But the lawsuit filed against American and LATAM Airlines has the potential to significantly reduce travel to Cuba by threatening U.S. and foreign carriers who land at José Martí International with legal repercussions.
The American/LATAM suit would be a “test” of the main legal issues in the case, the plaintiff's lawyer, Andres Rivero, told the Miami Herald. If the initial suit succeeds, he predicts, other companies could be added, or additional suits against the other 50 airlines who fly to Cuba from around the world could be filed in the future.
“The Helms Burton Title III lawsuits against American Airlines and Chile’s LATAM, if upheld, would mean that no international carrier could fly to Cuba without risking being sued in U.S. federal courts,” noted American University Cuba specialist, William LeoGrande. “That takes the U.S. embargo to a whole new level, potentially halting not only air service by U.S. carriers, but by most western carriers as well.”
Over 14,000 flights from the United States have landed in Cuba since 2016, when President Obama authorized the return of commercial air traffic between the two countries. American Airlines currently conducts six flights a day to Havana and several more daily flights to other cities on the island.
“American Airlines service to Cuba, including José Martí International Airport in Havana, is authorized by the U.S. government, including the Department of Transportation and the U.S. Office of Foreign Assets Control,” stated Joshua Freed, a spokesperson for the airline company. “We’ll review this lawsuit in detail and vigorously defend our service to Cuba.”
[Note: This story was updated on October 2. The original article incorrectly stated that charcoal was the only product exported from Cuba to the U.S.]