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Helms Burton Act: new lawsuit under Title III and appeal in favour of American Airlines

| Publications | Cuban Desk

The Court argues that if the property giving rise to the claim was seized prior to March 12, 1996, a U.S. national cannot bring an action under the HBA unless he acquired title to his right to the claim prior to March 12, 1996

In recent days, we have seen two new procedural milestones in the application of Title III of the Helms Burton Act (HBA): a new lawsuit has been filed against the company CMA CGM S.A. by a US citizen, almost at the same time as the dismissal by the US Court of Appeals for the Fifth Circuit in New Orleans of the appeal against the dismissal of the case against the company American Airlines, for alleged trafficking in confiscated assets.

Recall that Title III of the HBA, activated in 2019 by the Donald Trump administration, allows US nationals to sue any person who knowingly and intentionally traffics in property that was confiscated by the Cuban government after Castro's revolution. The definition of "trafficking" includes the purchase, receipt, possession, control, management, use or holding of an interest in confiscated property without the owner's consent. It also includes engaging in commercial activities that use or benefit in any way from confiscated property without the owner's consent.

With respect to the first case, the defendant company CMA CGM S.A., a French national, is one of the world's leading container carriers and ranks first in the United States in combined import/export market share.

CMA CGM S.A. is the forty-first company to be sued under the HBA. In the lawsuit filed in the Florida courts, Odette Blanco Rosell (the Claimant), on behalf of her family, seeks damages and interest for confiscated property owned by her (among others, the company Marítima Mariel SA, which held the 70-year concession to develop port facilities in Mariel Bay, a deep-water port, and other companies such as Central San Ramón and Compañía Azucarera Mariel S.A.). These assets, located within the current Mariel Special Development Zone, were confiscated on 29th September 1960 by the Cuban Government, by virtue of "Resolution No. 436".

The Blanco Rosell brothers were not US citizens when the Cuban government confiscated their property in 1960. They fled Cuba after the confiscation and obtained US citizenship before 12 March 1996, when the HBA was enacted. As a result, they did not file a claim in the first instance but have now filed a claim following the reactivation of Title III of the HBA.

In this new case, the Claimant argues that CMA CGM S.A. has "trafficked" and continues to "traffic" in the above-mentioned assets without proper authorisation, knowingly and intentionally. In this regard, it argues that the Respondent has benefited from the Blanco Rosell brothers' planning, development and operation of each of these assets. 

On the other hand, in the case against American Airlines, on 2nd August 2021, the United States Court of Appeals for the Fifth Circuit in New Orleans, Louisiana has ruled on the lawsuit once filed by Robert Glen against the airline, alleging that the airline had also "trafficked" in confiscated property and seeking damages including triple the value of the properties.

The lawsuit concerned four hotels located on the beach in Varadero, Cuba, which he claims were confiscated by the Cuban government. At the time of the confiscation, the hotels were owned by Glen's mother and aunt, both Cuban citizens. In his lawsuit, Glen argued that American Airlines had been marketing rooms at these hotels for two years through its website 

The Court of First Instance dismissed the claim for lack of standing; however, the Court of Appeal considers that there is standing to sue, but that Glen inherited his claim outside the time limit for bringing the claim.

The Court argues that if the property giving rise to the claim was seized before 12th March 1996, a US national cannot bring an action under the HBA unless he acquired title to his claim before 12th March 1996. In this case, the property in which Glen claims an interest was seized before 1996, but he did not inherit his right to the claim until after 1996. 

Therefore, and by virtue of the foregoing, the court ruled in favour of the defendant, American Airlines, creating a precedent and a first opinion that is addressed on appeal regarding standing and the acquisition by inheritance of the rights to be claimed under Title III of the HBA.

You can download the full PDF file here.

For further information please contact:

Ignacio Aparicio | Partner Corporate / M&A and Director of the Cuban Desk


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