A Miami federal judge has ruled that four major cruise lines—Carnival, Norwegian, Royal Caribbean and MSC Cruises—violated a ban on tourism and engaged in “trafficking” of confiscated property by allowing passengers to disembark at a port terminal in Havana that was confiscated decades ago by the communist government in Cuba following the Cuban Revolution.
The ruling, issued Monday by U.S. District Judge Beth Bloom of the Southern District of Florida, represents a rare win for a claimant brought under Title III of the Helms-Burton Act that aims to compensate individuals whose property was confiscated in Cuba.
Havana Docks, an American company, held a concession to operate the port of Havana. It was never compensated when Cuban leader Fidel Castro nationalized the port facilities in 1960. The company is represented by Roberto Martínez, Stephanie A. Casey, Zachary A. Lipshultz and Aziza F. Elayan-Martinez of Colson Hicks Eidson, a trial law firm based in Coral Gables, Florida; and Rodney S. Margol of Margol & Margol, a civil litigation firm in Jacksonville.
The cruise lines, which could now be liable for huge damages awards, are represented by a lineup of top firms in Big Law. Royal Caribbean Cruises is represented by Scott D. Ponce and Sanford L. Bohrer of Holland & Knight; Carnival Corp. is represented by Stuart H. Singer of Boies Schiller Flexner, Pedro A. Freyre of Akerman and George J. Fowler III of Jones Walker; Norwegian Cruise Line is represented by Richard C. Lorenzo and Allen P. Pegg of Hogan Lovells; and MSC Cruises is represented by J. Douglas Baldridge, Andrew T. Hernacki and Justin B. Nemeroff of Venable.
Law.com International has reached out to all of the law firms involved for comment. They declined to comment.
Royal Caribbean, Carnival and Norwegian are each headquartered in South Florida. MSC Cruises is based in Geneva, but has a subsidiary in South Florida.
The Foreign Claims Settlement Commission, which adjudicates claims against foreign governments that involve the expropriation of property belonging to U.S. nationals, certified in 1971 that actions by the Cuban government resulted in a financial loss for Havana Docks of over $9 million, plus 6% annual interest from the date that the property was seized.
Havana Docks, which was incorporated in the state of Delaware in 1917, said it managed the terminal until its confiscation in 1960. At that point, the company said it still had 44 years left on its concession.
The cruise lines argued, unsuccessfully, that the expiration of Havana Docks’ concession in 2004 meant that the firm couldn’t claim an interest in the stolen property beyond that date.
They also argued, unsuccessfully, that the sailings promoted “people-to-people” contact—a soft form of diplomacy that was encouraged via the easing of travel restrictions to Cuba during the administration of former U.S. President Barack Obama.
In 2015, the Treasury Department’s Office of Foreign Assets Control (OFAC) tweaked the Cuban Assets Control Regulations to allow travel under general license, rather than authorizing trips to Cuba on a case-by-case basis. That meant U.S. citizens could travel to Cuba with the goal of supporting civil society on the island or promoting the Cuban people’s independence from Cuban authorities.
Tourism to Cuba was still expressly banned, and the rules specified that the “predominant portion” of the activities engaged in by U.S. travelers should not be with individuals or entities acting for or on behalf of the Cuban government.
The cruise lines rolled out shore excursions that brought passengers to watch performers at the world-renowned Tropicana Cabaret and cruise along the streets of Havana in pastel-hued, mid-century American cars driven by Cubans.
The tours were organized by Havanatur and Cubanacan, both official tour operators of the Cuban government that report to the Ministry of Tourism.
In her sometimes strongly worded ruling, Bloom called it “a stretch” to label tourist activities such as visiting landmarks, watching shows, drinking rum, smoking Cuban cigars and buying souvenirs as meaningful, people-to-people interactions.
She also noted that the cruise lines earned “hundreds of millions of dollars” through their trips to Cuba, and they paid Cuban entities “tens of millions of dollars” to use the terminal and operate shore excursions.
Her harshest words appear in a section that summarizes the statutory and regulatory background for the case.
“Since Fidel Castro seized power in Cuba in 1959, ‘communist tyranny and economic mismanagement’ has plagued the island nation, substantially deteriorating the welfare and health of the Cuban people,” Bloom wrote.
“The communist Cuban Government has systematically repressed the Cuban people through, among other things, ‘massive and systemic violations of human rights’ and deprivations of fundamental freedoms. In response, the United States has consistently sought to impose international sanctions against the Castro regime.”
She concluded, “The use of Havana Docks’ property without its authorization constitutes a tangible injury,” adding that “trials scheduled in each case shall proceed solely on the issue of Havana Docks’ damages.”
John Kavulich, president of the nonprofit U.S.-Cuba Trade and Economic Council, said the cruise lines must now calculate whether they can negotiate a more favorable outcome via a settlement than via a jury trial.
“Key to remember—the jury will be residents of the Miami, Florida, area, and will certainly include individuals of Cuban descent,” Kavulich said.
More than two dozen cases were filed after the Trump administration allowed Title III to take effect in May 2019, paving the way for U.S. citizens to pursue litigation against entities that purportedly traffic in Cuban property that was privately owned before the 1959 communist revolution.
A string of those cases were dismissed in 2020, either because plaintiffs had inherited their claims from deceased relatives after a cutoff date or because they were unable to establish jurisdiction.
The U.S. Justice Department’s Foreign Claims Settlement Commission certified nearly 6,000 claims on property confiscated by Cuba with a principal value of $1.9 billion.
To date, only one other Title III case has concluded in favor of the plaintiff. An American family that once owned a vast sugar plantation in Cuba reached an out-of-court settlement in 2021 with Switzerland-based building materials LafargeHolcim for its use of property seized in the Cuban revolution.