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Trump’s Cuba policy produces thorny legal issues for U.S. companies

U.S. courts are beginning to feel the effects of President Trump’s decision to allow lawsuits over confiscated Cuban property. But what constitutes a legitimate claim remains unclear as defendants face mounting legal bills. (Lea este articulo es español)
15 Ene 2020 – 08:41 PM EST
Fogo bags of 15 kg of marabu charcoal from Cuba sold for $36.76. Crédito: Twitter/Fogo

MIAMI - In Cuba, the ‘marabú’ plant is considered a pesky weed and a sign of the country’s agricultural woes.

So, when a U.S. entrepreneur got the idea to chop down the invasive, spiny bush and export it to the United States as charcoal, it seemed like a good idea.

Now, the marabú charcoal is caught up in another thorny problem – this time of a political variety – that is being fought out in court as a byproduct of President Donald Trump’s Cuba policy. The case is one of about 20 similar claims filed in U.S. courts in the last few months, what some say is just the tip of a slew of litigation unleashed by Trump’ decision to adopt a more aggressive Cuba policy.

Among those companies already facing lawsuits: Carnival cruise lines, Amazon, American Airlines, the travel website Expedia, and hotel booking service Trivago.

Daniel Gonzalez, the grandson of a Cuban American farm owner, says the marabú charcoal belongs to him, under sanctions imposed against Cuba’s communist government decades ago. Gonzalez accuses a South Florida company, Fogo Charcoal, which began selling the marabú product from Cuba, of trafficking in property confiscated from his grandfather by the Cuban government in 1964 after the island’s revolution led by the late Fidel Castro.

Gonzalez also filed his lawsuit against Amazon, the e-commerce giant which sold Fogo’s marabú charcoal on its website.

'Libertad' Act

The unusual case was made possible due to a change in policy by the Trump administration in May last year which for the first time allowed implementation of a controversial provision of the 1996 ‘Libertad’ Act that had been waived by previous presidents due to opposition from the international community and fears it could create chaos in U.S. courts.

The so-called ‘Title III’ clause allows lawsuits to be filed in U.S. court against Cuban and foreign companies that operate businesses on property seized after the 1959 revolution. In a rare legal move, the law allows cases to be brought by Cuban American immigrants who were not U.S. citizens at the time their property was seized.

So far, 20 cases have been filed against 67 defendants. But there are 5,913 claims by U.S. citizens that were certified by the U.S. government in 1960s for property confiscated in Cuba, valued at over $1.9 billion. With interest, the value is estimated to be roughly $8 billion. Given the massive scale of expropriation in Cuba, the U.S. government estimates there could be potentially another 200,000 ‘uncertified’ claims by Cuban Americans who were not citizens at the time, though no-one has any idea how many might now come forward.

Critics of Trump’s decision to activate Title lll, say its lacks legal validity arguing that under international law there is little precedent for immigrants pursuing compensation claims for property seized from them by their own government before they came to the United States.

“The unthinkable has now occurred,” said Michael Kelly, a law professor at Creighton University in Nebraska, which won a U.S. government grant to study the resolution of the Cuba property claims. “The certified claims had deeds and documented paperwork. It will be interesting to see, after all these years, what kind of evidence the new claimants can produce,” he added.

Early evidence suggests that the expectation of a large number of cases overwhelming the courts may have been exaggerated. Plaintiffs are required to pay a $6,500 fee to file a claim, and must be able to document their claims with documents, such as property titles and other records which may have disappeared after so many years.

The legislation only covers commercial losses over $50,000 and does not recognize residential property, except if it is now in government hands.

Unique legislation

“It’s a very technical law that makes for a very demanding proposition,” said Pedro Freyre, a Cuban-born attorney who heads the international practice at Akerman, a Miami law firm which represents several defendants. “It’s difficult to find a unicorn; in this case a defendant who is easy to represent with clear assets that are easy to get at, and a claimant with a clear proof of ownership,” he added.

“This is a very unique legislation,” agrees Jason Poblete, a Washington lawyer and sanctions expert. “There’s not much precedent to go on,” he added.

Judges have already begun ruling on several cases. Exxon Mobil is hoping to recover about $280 million in losses associated with claims that two Cuban state-owned companies, Cimex and Cupet, use and profit from its oil refineries and service stations that were seized in 1960 by the Castro government.

Two plaintiffs are suing the cruise lines, Carnival, Norwegian, MSC and Royal Caribbean, for allegedly using docks to drop off passengers in the ports of Havana and Santiago that were confiscated by Castro. For decades Cuba was off-limits to U.S. tourists. That changed when President Barack Obama relaxed U.S. sanctions against Cuba and several cruise lines began sailing to Cuba in 2016. But, the Trump administration put an abrupt halt to the Cuba cruises in June 2019. Even though the cruises stopped, the plaintiffs are seeking compensation for the three years they operated, as well as damages.

A similar lawsuit alleges that U.S. airlines that began flying to Cuba in 2016 ”trafficked” in confiscated property at Havana airport that belonged to an exiled family.

Legal hurdles

But, a myriad of complicated legal issues could thwart the lawsuits. Among them, expired leases, wills and inheritance issues, and whether federal licenses issued by Obama’s Treasury Department to permit travel to Cuba now protect those companies from legal action. “Did Congress intend to exclude claimants who inherited their claim form relatives? The law is not clear,” said one Florida lawyer representing a claimant.

District judge James Lawrence King rejected a motion by lawyers for Carnival to dismiss the case, ruling that the company’s Obama-era federal travel license did not excuse it from the alleged trafficking in stolen property. But another judge, Beth Bloom, last week dismissed two similar cases against Norwegian and MSC, ruling in both cases that the plaintiff’s 70-year port lease expired in 2004, prior to the cruise ships using of the property in dispute.

Some long-standing U.S. owners of the federally-certified claims also object to Cuban Americans using the Title lll provision to jump the queue to file claims of questionable legitimacy.

The Gonzalez lawsuit against Fogo and Amazon is a good example. Gonzalez says he is the rightful owner of 2,030 acres of land in Cuba’s eastern Granma province that were nationalized in 1964. “The communist Cuban Government ... has not paid any compensation to Plaintiff for its seizure,” the lawsuit states.

Fogo celebrated the launch of its new product in 2017. “Cuban Marabu Charcoal has finally arrived! Beautiful, dense and great aroma! Shipping first orders today!” it announced on Twitter.

Gonzalez claims Amazon promoted the sale of marabú charcoal produced on that property, meaning it “knowingly and intentionally” trafficked in property confiscated by the Cuban Government. The lawsuit includes a photo showing a bag of Fogo’s marabú charcoal being sold on

Lack of evidence

However, lawyers for Amazon and Fogo responded to the complaint saying that Gonzalez has not provided any evidence to show that the charcoal they allegedly trafficked came from his family’s farmland. “The full extent of Amazon’s alleged activity here is that it operates, where a bag of charcoal for sale appeared,” Amazon stated in court documents.

Univision requested an interview with Gonzalez through his Miami attorney, Santiago Cueto, but he declined to comment.

Fogo’s lawyer, Brandon Hechtman also pointed out that Gonzalez had failed to mention “any plausible nexus” between Fogo’s imported marabú charcoal and his family’s farmland. Hechtman argued that Gonzalez also needed to provide more detail about the precise location of the farmland and his claim of ownership. Were his grandfather or his parents still alive, and what about possible heirs, such as his siblings and aunts and uncles? they asked. After all, he added, marabú “is not found on a single plot of land, but can be found … across the whole island.”

In fact, marabú is so pervasive that it now covers two million hectares (five million acres), or almost 20% of the island. It spread like wildfire during Cuba’s ‘Special Period’ of the 1990s, when the Soviet Union stopped subsidizing its agriculture and farms fell into disuse.

"Witch's weed"

Despite its colorful pink and yellow bloom, the waste-high prickly bush - known as 'sicklebush' or 'Bell mimosa' in English - is decried by farmers as the 'witch’s weed' because it quickly overruns untilled pasture and is tough to uproot. Former Cuban leader Raul Castro once referred to it in a major speech that highlighted the country’s falling agricultural production, saying how while driving to the event he noticed marabú “all along the highway.”

Fogo is a relatively small, family-owned business in the heart of Hialeah, the U.S. city with the highest density of Cuban exiles. Its owners, German-born Sebastian Bussert and his Chilean wife Julia Suriano, make artisanal charcoal using Central American hardwood trees. They also declined to speak to Univision, preferring to let their court filings speak for themselves.

Some experts now wonder what the limits are to this kind of litigation. “To what degrees do plaintiffs reasonably believe is appropriate to go after all the participants in a transaction?” asked John Kavulich, a veteran Cuba observer keeping track of the cases. “As yet unanswered is whether the plaintiff will, having sued Amazon, then sue Crowley Liner Services who delivered the charcoal to the United States; then sue FedEx or UPS who may have delivered the charcoal from Fogo to the customer?” he added.

The lawsuit has impacted Fogo’s business after Amazon took all their products off its website. Then there are the legal bills.

The 20 lawsuits, mostly filed in Miami, have already consumed $4 million in billable hours, involving 105 attorneys and more than 3,000 filed court documents, according to Kavulich.

So far, most of the larger claimants, such as Coca Cola, Office Depot and Marriott, who hold claims worth hundreds of millions of dollars, have yet
to file. “Everyone is looking to the 2020 elections,” said Kelly. “If Trump loses, a new administration could try and negotiate an overall settlement with Cuba. “Or, if Trump is re-elected, he could also sense a deal to be had,” he added.

“It’s still early days in this. You have a battalion of attorneys on each side,” said Freyre. “There’s a lot of brain power being devoted to this and nobody is taking it lightly,” he added.

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