Hands Off: U.S. Court Thins Field for Castro Land Seizure Lawsuits

A federal appeals court has rejected an effort to loosen jurisdictional standards of the U.S. Libertad Act of 1996.
A federal appeals court has rejected an effort to loosen jurisdictional standards of the U.S. Libertad Act of 1996. Photo by Mondo79 via Flickr
A federal appellate court in Miami has dealt a setback to Cuban Americans seeking compensation from foreign companies accused of profiting from land seized by the Cuban government.

In an August 12 decision, the 11th Circuit Court of Appeals rejected an effort to loosen the standards that determine whether a foreign company can be sued in the U.S. under the Cuban Liberty and Democratic Solidarity Act of 1996 (AKA the Libertad Act), a stateside law that gives former owners of Cuban land and their heirs the right to bring claims against those who "traffic" in property the Castro regime seized in the aftermath of the Cuban Revolution.

Herederos de Roberto Gomez Cabrera LLC, a company tied to heirs of the late businessman Roberto Gomez, filed the case in 2020, alleging that Canada-based mining giant Teck Resources milked revenue from Cuban land that had been confiscated from Gomez.

Though the law went into effect in 1996, three U.S. presidents suspended its right-to-sue provision amid political pressure from foreign nations and companies that had commercial dealings with Cuba. The Trump administration reactivated the provision in 2019, opening the litigation floodgates.

John Kavulich, president of the U.S.-Cuba Trade and Economic Council (USCTEC), says it has been a struggle for Cuban-American families who've waited more than two decades for their day in court.

"There's a lot of pain. The act was designed to be a valve to try to release some of that," Kavulich tells New Times. "No one expected that a law passed in 1996 would not be implemented until 2019."

At the heart of the Gomez lawsuit is a 620-acre tract in the Sierra Maestra mountain range in southeastern Cuba. A rainforest-lined area rich in copper and manganese deposits, the region served as a hideout for Castro in the 1950s as he and his supporters waged the guerrilla war that toppled the government of President Fulgencio Batista.

Gomez purportedly owned the land along with its 21 mines around the town of El Cobre until the property was seized in 1960, when the Castro regime abolished private ownership of commercial industry. Decades later, Teck Resources, a Vancouver-based public company currently valued at more than $18 billion on the New York Stock Exchange, began a mining partnership on the land with the Cuban government's blessing, Gomez's heirs claim.

"From as early as 1994 through 2009, Teck, together with Joutel Resources... directly or indirectly with Geominera SA, a Cuban government-owned and operated entity, exploited the confiscated property and extracted significant valuable minerals and other geological materials," the Herederos lawsuit alleged.

After losing the litigation in district court in April 2021, partly on jurisdictional grounds, Herederos appealed to the 11th Circuit, arguing that the Libertad Act was designed to give U.S. courts broad authority to hold foreign companies accountable.

The plaintiff's attorney, Leon Hirzel, urged the court to depart from a long-standing test for establishing general jurisdiction over a foreign company — which typically requires a showing that the company has so much activity in the place where it is being sued that it is essentially "at home" there. That test makes no sense for Libertad Act claims because the act bans violators from entering the United States in the first place, Hirzel argued. (Though rarely enforced, the ban provides that foreigners are prohibited from entering the U.S. if they, or a company that they own or run, profited off confiscated Cuban land.)

"To avoid complete destruction of the Act, federal courts should examine the issue by applying a due process analysis that respects and upholds Congress' intent in forming the statute. There is little sense, legislative or otherwise, in creating a claim if jurisdiction does not go with it," Hirzel argued in his brief, which also noted that Teck Resources runs mining operations in Washington and Alaska and has subsidiaries incorporated in the United States.

But the 11th Circuit's three-judge panel rebuffed the plaintiff's call for a more "limited or relaxed view" of due process when foreign companies are sued under the Libertad Act.

In a 16-page opinion, Judge Kevin Newsom, a Donald Trump appointee, ruled that Teck Resources did not have sufficient activity in the United States to support the argument that U.S. courts had jurisdiction. The judge picked away at Hirzel's points, saying the plaintiff confused the concept of Congressional authority with that of judicial jurisdiction.

The appeals court did not address the lower court's other findings, including a determination that Herederos failed to show Teck Resources knowingly violated the Libertad Act.

Newsom was joined in the decision by Senior U.S. Circuit Judge Stanley Marcus, a Bill Clinton appointee, and Senior U.S. District Judge Virginia Hernandez Covington, a George W. Bush appointee who sat on the appeals panel as a visiting judge.

The decision is binding in the 11th Circuit, which means plaintiffs in Florida, Alabama, and Georgia will be out of luck if they try to haul foreign companies into federal court using similar arguments.

The case is one of more than 40 under the Libertad Act that poured into federal courts over the past three years. Plaintiffs have ranged from giant companies such as Exxon (which is demanding $280 million in damages over seized oil and gas assets) to a Jacksonville doctor who is suing over confiscated port facilities. Most of the cases have been filed in the Miami metropolitan area, home to the majority of Cuban exiles in the United States.

In addition to jurisdictional hurdles like the ones in the Herederos case, plaintiffs suing under the Libertad Act face a strict cutoff date: Claims must have been "acquired" prior to March 1, 1996 — meaning heirs who inherited claims after that date may have no legal recourse.

That clause, coupled with the prolonged suspension of the act under Clinton, Bush, and Obama, has been especially painful for Cuban Americans whose family members had valid claims but died in the interim, Kavulich says.

"That has been a real issue — also an emotional issue for some of these families and individuals that are suing," he notes. "They've gone to the courts and said, 'Wait a minute, your honor. You can't penalize us because presidents decided not to implement this.'"

A handful of Libertad Act plaintiffs have prevailed, according to a recent report authored by the Washington, D.C.-based law firm Steptoe & Johnson. For one, the Southern District of Florida this past March ruled in favor of the former owner of a confiscated Havana port property, who was suing major cruise lines over their use of the property to disembark passengers.
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Izzy Kapnick is a freelance writer for Miami New Times, covering environmental law, white-collar crime, and the healthcare industry. He has worked as a legal news reporter in South Florida since 2008.
Contact: Izzy Kapnick