Donald Hayden, of Mark Migdal & Hayden.

Recently, the Trump administration announced its plan to, for the first time, enforce a controversial provision of the Helms-Burton Act signed into law by President Bill Clinton in 1996. In doing so, the Trump administration will be breaking with the precedent set by every president since its enactment, who have consistently suspended the implementation of Title III of the act. Title III of the act, also known as the Libertad Act will be fully implemented effective May 2, and will permit U.S. citizens to file lawsuits in U.S. federal courts against businesses that operate on property the Cuban government appropriated after the 1959 revolution. Every administration before Trump has waived enforcement of Title III, in large part to avoid trapping companies from many of the closest U.S. allies in years of complicated litigation as well as to avoid a wave of retaliatory trade-related legal claims against the United States. Besides the anticipated retaliatory actions by Canada and the European Union(EU) before the World Trade Organization, it has always been assumed that implementing Title III would open the floodgates to reparations claims against several major multinational companies doing business with Cuba, even some U.S. companies like Delta, Jet Blue and Marriott.

The reparations claims could number into the hundreds of thousands because of the broad language of Title III, which gives U.S. citizens a private cause of action to recover compensation for confiscated properties that were once theirs from persons or entities that may be “trafficking” in that property. Title III defines “trafficking” quite broadly to encompass not only those who own the property, but also those who profit from the use of the confiscated properties. A broad array of companies from a myriad of industry sectors could be exposed to civil lawsuits because of this broad definition. For example, cruise ships calling at expropriated ports or using expropriated port facilities could be found to be trafficking as Title III defines it.

As applied, Title III would allow U.S. citizens to sue for three time the current value of confiscated property worth more than $50,000. Billions of dollars could be at stake as many of the targeted Cuban properties identified by Trump administration officials last year include large multinational holding companies, some of the premier resort properties on the island like Gran Hotel Manzana Kempinski and Iberostar Grand Packard Hotel in Havana, large joint venture companies owned in part by major Canadian or European Union multinationals and even a pair of rum companies, Ron Caney and Ron Varadero. In addition to claims against Canadian and European companies which have significant business holdings in Cuba, it could also affect some U.S. companies who have begun investing in the island since former President Barack Obama attempted to normalize relations with Cuba during his administration.

The U.S. Foreign Claims Settlement Commission has already certified more than 6,000 cases, but that number could be the tip of the iceberg of the potential number of new filings that we can anticipate will congest South Florida's federal court system if Title III is fully activated given our large Cuban population here. One recent State Department report to Congress predicted between 75,000 and 200,000 potential lawsuits will be filed when Title III is activated. Some Miami legal commentators have opined that while we may see a flood of lawsuits, the claimants will have difficulty collecting on their judgments as Cuba has no property in the United States, and the primary countries with companies heavily invested in Cuba already have laws in place blocking efforts to enforce Cuban reparation judgments in their jurisdictions. However, in our modern global economy, Canadian and European multinationals have assets here in the United States that claimants might seek to attach to satisfy judgments obtained for these claims. It remains to be seen what the full impact of activating Title III for the first time in over 30 years will be. Given the savvy and creative plaintiffs bar of South Florida, look to see some significant reparation claims on file in the Southern District in a matter of weeks. Stay tuned.

Donald J. Hayden is a partner of Mark Migdal & Hayden. He was lead counsel for AT&T in the supplementary proceedings to attach blocked accounts held for Cuba to satisfy a $200 million default judgment obtained by the families in the Brothers to the Rescue lawsuit seeking damages for the wrongful deaths of pilots shot down by the Cuban air force.