U.S. Supreme Court Revives Trafficking Claims in First-Ever Helms-Burton Decision

I. Background

Title III generally provides that "any person" that "traffics in property which was confiscated by the Cuban Government on or after January 1, 1959, shall be liable to any United States national who owns the claim to such property." 22 U.S.C. § 6082(a)(1)(A). Subject to certain exceptions—including "uses of property incident to lawful travel to Cuba"—a defendant "traffics" in confiscated property if he "knowingly and intentionally" sells, purchases, uses, or "engages in a commercial activity using or otherwise benefiting from confiscated property." Id. § 6023(13)(A)(ii), (B)(iii). The statute allows prevailing plaintiffs to recover potentially massive damages untethered to the derived economic benefit, and, in certain cases, provides for treble damages on top of accumulated interest.

Enacted in 1996, Title III's right of action remained dormant for decades because successive presidents continually suspended claim owners' ability to sue. In May 2019, however, President Trump allowed that suspension to lapse, and plaintiffs began to file Title III lawsuits.

One early plaintiff was Havana Docks Corporation, which sued four major cruise lines for making stops in Havana between 2016 and 2019. In 1928, Havana Docks had acquired a "usufructuary concession" (essentially, a lease) to develop and operate dock facilities at the Cuban-government-owned Port of Havana. By its terms, that concession would have expired in 2004. But after Fidel Castro came to power, the Cuban government confiscated Havana Docks's assets and forcibly took over the docks. Havana Docks obtained a $9 million certified claim from the Foreign Claims Settlement Commission, which (like all other Cuban claims) remained uncompensated. Years later—following a partial thaw in U.S.-Cuba relations under President Obama—the cruise lines transported passengers to and from Havana, using the facilities Havana Docks had once built and operated.

The district court entered judgment for Havana Docks, holding each cruise line liable for over $100 million. On appeal, a divided Eleventh Circuit panel reversed. In its view, because Havana Docks's concession would have expired in 2004 even without Castro's intervention, the cruise lines' later use of the docks could not constitute trafficking in Havana Docks's confiscated property. The Supreme Court granted certiorari.

II. The Decision

In an 8-1 opinion by Justice Thomas, the Court rejected the Eleventh Circuit's "counterfactual" focus on whether the cruise lines' conduct would have infringed Havana Docks's property interest in a world where Cuba had allowed the concession to run its course. For the Court, the key question was "whether the relevant 'property which was confiscated' must be Havana Docks's property interest in the docks"—the time-limited concession—"or whether it could instead be the docks themselves." The Court held that the cruise lines' use of the docks themselves sufficed to establish trafficking in "property which was confiscated by the Cuban Government."

Before doing so, the Court summarized several of the Act's key statutory definitions to produce a high-level distillation of Title III's elements. "To prevail," the Court stated, "a plaintiff must show that (1) the Cuban Government confiscated property on or after January 1, 1959; (2) the defendant trafficked in the property … and (3) the plaintiff is a United States national who owns the claim to the property."

On the question presented, the Court concluded that, for plaintiffs like Havana Docks whose property interests were less than title ownership, the relevant "property which was confiscated" can include "the physical property in which the plaintiff had an interest, and not just the interest itself." The Court noted that the Act defines "property" to encompass "any property … and any … interest therein." From that definition, it reasoned that construing the relevant property to include only a plaintiff's limited interest would "read out of the Act obvious ways in which people can traffic in confiscated property." For example, even if the cruise lines had used the docks before 2004, they would have been using only the docks themselves, and not Havana Docks's concession. Requiring "a one-to-one correspondence between the property interest confiscated and the property interest trafficked" would thus produce the "surprising result" that much confiscated property could be used with impunity. The Court instead concluded that all confiscated property is "tainted—off limits—such that anyone who uses the property can be liable to those who had an interest in the tainted property" when it was confiscated.

Applying this framework to the case at hand, the Court held that the docks were "property which was confiscated" because Cuba forcibly seized control of them after Castro took power; that the cruise lines undisputedly "used" or "engaged in commercial activity using" the docks (though the Court expressly left open whether the lawful-travel exception applied); and that Havana Docks's certified claim constituted "conclusive proof" of its claim ownership (though the Court expressly did not address the cruise lines' separate argument, rejected by the Eleventh Circuit, that Havana Docks was not a qualifying "United States national" for factual reasons).

Turning to the Eleventh Circuit's "counterfactual approach," the Court found it "difficult to understand and apply." On one hand, the Court reasoned, if courts must "assume that the original rightsholder retained his legal rights," that exercise would "foreclose liability in cases where the text demands it" by making some predicate acts of trafficking legally impossible. For example, if Cuba confiscated a plot of land and resold it to a new buyer, who then resold it in turn, those later sales would clearly qualify as "trafficking" in confiscated property, yet they could not have occurred in the absence of the original confiscation. On the other hand, if the Eleventh Circuit meant "that the Act requires that the defendant traffic in the same property interest that the plaintiff held," then it wrongly assumed that trafficking in the underlying physical property was insufficient.

The Court also rejected the argument that Cuba "did not confiscate the docks" at all because it already owned them, emphasizing that the Act's definition of "confiscation" encompasses the seizure of a property's "ownership or control." 22 U.S.C. § 6023(4)(A) (emphasis added). Even though Havana Docks did not own the docks, it controlled them, and Cuba usurped that control when Castro's forces physically occupied the docks and expelled Havana Docks's agents.

Dissenting alone, Justice Kagan argued that the docks were not "property which was confiscated" because they "belonged to the Cuban Government—not Havana Docks—all along." Havana Docks's "time-limited concession" was "the only property Cuba could have confiscated from it" and, therefore, the only confiscated property it could sue over.

III. Justice Sotomayor's Concurrence

Justice Sotomayor, joined by Justice Kavanaugh, concurred on the "narrow question" presented but expressed "significant concerns" about two issues the Court had not reached.

First, Justice Sotomayor noted that Havana Docks's reading of Title III could allow "potentially unlimited" judgments "from an unlimited number of" defendants, enabling the company to "recover millions, if not billions, of dollars over and over again." Finding it "unlikely that Congress intended for someone who suffered a finite loss to reap infinite recoveries," she suggested that the statutory scheme might instead limit recoveries to "adequate compensation" for the plaintiff's confiscated property. Otherwise, the Act could "violate the Due Process Clause" by imposing intolerably excessive "penalties against individual defendants."

Second, Justice Sotomayor flagged the "significant question" of whether the cruise lines' conduct fell within the lawful-travel exception, noting that the federal government appeared to have blessed the cruises as lawful and raising "due process concerns" about imposing liability for that conduct.

IV. Implications

The full implications of Havana Docks remain to be seen. The Court's holding establishes that confiscated property remains "tainted" even after a prior possessor's time-limited interest would have elapsed, and even if Cuba itself was the title owner all along. While that holding broadens Title III beyond the Eleventh Circuit's approach, its direct relevance to cases not involving time-limited interests appears limited. Notably, Havana Docks does not address the myriad other questions that have arisen since Title III emerged from dormancy—including the scope of the lawful-travel exception, whether the statute permits unlimited recoveries, or how it applies to the distinct universe of uncertified claims.

At the same time, as the Supreme Court's first-ever opinion interpreting Title III, Havana Docks may well play an outsize role in guiding the lower courts, even in cases not presenting the same questions. The most broadly relevant part of the opinion may therefore prove to be the Court's three-prong distillation of Title III's elements. While the Court's high-level summary may not directly foreclose arguments for additional limitations or qualifications, lower courts will likely take it as their starting point in navigating Title III's complex statutory scheme.

Still, the Court's first encounter with the Helms-Burton Act is unlikely to be its last. This Term alone, in the pending case of Exxon Mobil Corp. v. Corporación Cimex, S.A. (No. 24-699), the Court is expected to decide whether the Act abrogates foreign sovereign immunity for claims against Cuban instrumentalities. The Justices' decision to take up two Helms-Burton Act cases in the same Term suggests significant interest in this new field of federal litigation. And Havana Docks itself (especially the concurrence) shows that the Court is well aware that it has yet to resolve every important question raised by the Act.