JONES DAY TALKS®: Helms-Burton Litigation Heading into Presidential Election
In May of 2019, the Trump Administration lifted the suspension of Title III of the Helms-Burton Act. This cleared the way for U.S. nationals with claims to property in Cuba that was confiscated under the Castro regime to file suit in U.S. courts against persons that may be "trafficking" in that property. Jones Day Miami-based partners Rick Puente and Chris Pace discuss the most recent court actions and decisions related to Title III matters.
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Read the full transcript below:
Dave Dalton:
Title III of the Helms-Burton Act, provides the liability of persons who traffic in property confiscated by the Castro regime from U.S. nationals after the Cuban revolution, but since President Bill Clinton signed the act into law in 1996, Title III had been suspended through January 2019. Last May, the Trump administration lifted the suspension and there have been almost continuous development since. Jones Day's Rick Puente and Chris Pace are joining us again to fill us in on the latest. I'm Dave Dalton you're listening to Jones Day Talks.
Dave Dalton:
Jones Day partner Rick Puente, is a Florida bar certified international litigation and arbitration lawyer. Rick represents clients in complex, commercial and investment cases before courts and international arbitration tribunals involving witnesses, documents and proceedings in both English and Spanish, and in the U.S. and abroad. Partner Chris Pace, represents clients and commercial disputes, trade secrets and unfair competition cases, money laundering, and other criminal investigations and prosecutions and federal antitrust and RICO actions. Prior to joining Jones Day, Chris served as an assistant U.S. Attorney for the Southern district of Florida and was a law clerk to Supreme Court Justice, Anthony Kennedy. Rick, Chris, thanks for being here today.
Rick Puente:
Thanks Dave. Great to be here.
Chris Pace:
Great to be here, Dave.
Dave Dalton:
It's been a couple months since we last talked. Rick, just bring us up to speed a little bit for people who might have forgotten some of the details. What is Title III of the Helms-Burton Act, and why have we been talking about it recently?
Rick Puente:
Sure Dave. Title III of the Helms-Burton act is the third part of a statute that was passed many years ago, that allows U.S. nationals who had their properties confiscated by the Cuban government, sue in a federal court in the United States over the confiscated property.
Dave Dalton:
Okay, real good. Much has happened since we last talked. A couple court cases, were handing down relief to a plaintiff having appropriate standing to pursue a case. Tell us what happened in Havana Docks versus Carnival.
Rick Puente:
Sure, Dave. That case is interesting because it's pending here in the Southern district of Florida and was one of the first cases that was filed under Title III when the suspension was lifted in May 2019. In that case, initially, the federal judge denied the motion to dismiss, when Carnival filed it. Then another cruise line, which was sued involving the same plaintiff, involving the same allegations essentially, a few months later, granted the motion to dismiss and then reversed again. There was a bit of back and forth there. Most recently, the court denied Carnival's argument on constitutional standing under Article III. What had happened Dave, is that a case involving the airlines had been transferred to Texas. The argument was raised there that the airlines should be dismissed from the lawsuit because the plaintiff had not established sufficient evidence of standing under the pleadings to proceed with a lawsuit, under Article III. Very basic concept, but complex complicated concept.
Rick Puente:
The court in Texas ruled in the airline's favor and dismissed the case. Carnival and other cruise lines also had raised that argument and filed that case as a Notice of Authority in support of their motions to dismiss. The court denied, disagreeing with the Texas court and saying that the plaintiffs had satisfied injury, which there was some issue about whether the plaintiff had established concreteness of the injury, because at the end of the day, it was the Cuban government who had confiscated the property, not the third party who was now benefiting, deriving economic benefits.
Rick Puente:
The court disagreed and distinguished that case in Texas saying that the plaintiffs there had not alleged or had admitted conceded, that the injury in fact was not at plate because the particular defendant had not caused the injury in fact. Then basically the court found a lengthy opinion that there was standing and allowed the lawsuit to proceed, so that case is now in litigation against the cruise lines, against Carnival in particular, and is in the discovery phase.
Dave Dalton:
All right. Chris, do these recent developments bring about more clarity, in terms of the scope of Title III and what plaintiffs might be able to bring forward, or does this bring about a bit more confusion or indecision even?
Chris Pace:
I think it brings about less clarity, but in a way that is favorable to defendants. In other words, the first couple of rulings that came out under the Helms-Burton Act on motions to dismiss, denied the motion to dismiss. It was looking as if many of these claims were going to be able to go forward. Now we've definitely got a mixture of results. Rick just talked about the American airlines case.
Chris Pace:
There's also a case against Amazon that was dismissed. There's a few dismissals out there. I think plaintiffs are concerned as to their ability to maintain their claims. There's been a decision recently on the question of, "When did you acquire your claim?" And if you didn't acquire it within the right time period, you can be kicked out of court for that.
Dave Dalton:
Mm-hmm (affirmative).
Chris Pace:
Uncertainty has been brought into the process, that is to the benefit of the defendants in those cases, for the most part. Right now there are two different cases on appeal, one to the 5th circuit, one to the 11th circuit. Those appeals won't be decided for a while, but each of those appeals really has an opportunity to provide some clarity to the law because you're going to have an appellate court big on the issue, as opposed to simply a variety of district courts
Dave Dalton:
Has COVID slowed everything down Chris? Are they still hearing cases at about the pace they would have? In terms of timetable, what should people expect now?
Chris Pace:
I think it's slowed the courts of appeals, but not as much as we've certainly seen at the district court level. They're still moving pretty quickly, but not quite as quickly as before. At the district court level, so many civil cases saw a great slowdown from sometime around March to sometime around July.
Chris Pace:
We've started seeing cases picking up, and I would say the Helms-Burton cases are picking up at about the same tempo as other complex civil cases.
Dave Dalton:
Let's switch to, if there were ever a household name, this is one, ExxonMobil Rick, is suing some Cuba state owned entities. What's going on here? And talk about the role or the impact of the Foreign Sovereign Immunities Act, just give us an overview of what's happening here.
Rick Puente:
Sure Dave. That's an interesting case because it involves the petroleum assets that were owned by Standard Oil, which later became ExxonMobil, and involve a certified claim that was for over $70 million issued by the Foreign Claim Service Commission, pursuant to the International Claim Settlement Act. You may recall from the prior podcast, there are two types of buckets of claims. There's those that have been certified as to the owner and to the amount by the United States commission and the uncertified claim, while this one falls under the certified claim. That has a presumption of correctness as to the owner, then also, as to the amount which tagged along interest since the time period, that decision was entered, which was in the 1960s.
Dave Dalton:
Okay.
Rick Puente:
So what's really interesting there is that Exxon has sued essentially Cuban state owned entities. What you mean by state-owned entities, as that has been defined, is that the Cuban government is the majority shareholder or controlling owner of these entities.
Rick Puente:
These state owned entities, there are two in particular. They own, for instance, the service stations and the entity that processes the financial payments. They have moved to dismiss seeing that, one of the arguments they raised is that they're separate that they manage themselves separately, and apart from the Cuban government, even though they're state owned entities, they're subject to protection, to the extent that they are state owned entities by the Foreign Sovereign Immunities Act, which protects governments in general from litigation. There are exceptions to the Foreign Sovereign Immunities Act, and one of those exceptions is commercial activities. If those commercial activities are having direct effects on, U.S. companies that may be competing in the petroleum market, for example, then you can get around the Foreign Sovereign Immunities Act to the extended applies.
Rick Puente:
What's kind of interesting is the Helms-Burton Act. It's very lengthy Dave. One of the things it does is, it defines who persons are.
Rick Puente:
Persons under the statute, if you look at the statute, is defined to include state owned entities, agencies of the Cuban government. That's where they're distinguishing in their opposition papers that the Foreign Sovereign Immunities Act doesn't apply, and if it said while Title III covers that, it allows them to proceed with a lawsuit. And also that there's direct effects being filed in the United States. That's a general overview. There are declarations that have been filed. There are factual issues that need to be flushed out by the court, in connection with these allegations, before there's going to be a ruling on that motion.
Dave Dalton:
Where's this case being heard?
Rick Puente:
It's in the DC Circuit.
Dave Dalton:
I didn't know, given the state owned entity giant multinational energy company. I don't know if this is something that would go to some neutral court somewhere, Singapore or something, but this is being heard in DC.
Rick Puente:
Yeah. In a federal court, they're subject matter jurisdiction under the Foreign Sovereign Immunities Act, and the exceptions of the Foreign Sovereign Immunity Act. That case could have substantial precedential effect on future cases involving state owned entities, particularly where there's a statute creating liability, so one definitely to watch.
Chris Pace:
Rick, one of the protections in the Federal Legislative Scheme, obviously if you're going to create a cause of action in the country, you're going to allow your courts to hear it. But when you're suing a government owned entity, in most cases, you actually have to sue them in DC, which is what Exxon did here.
Rick Puente:
Okay.
Chris Pace:
I think that's really designed to be the protection. Exxon is based in Texas. Exxon probably would rather have sued them in Texas.
Chris Pace:
But the idea is, whether accurate or not, that the district courts in DC will be, or maybe, more sensitive to political and international issues, than district courts elsewhere in the country. As a policy matter, I may not agree with it, but I think that's the idea that Congress supports.
Dave Dalton:
Yeah.
Rick Puente:
Absolutely, and that's a great point. We'll see what happens there, but there's cases now, for instance, going on against the Chinese sovereign entities involving this whole COVID, so they're paying attention to this lawsuit. No doubt.
Dave Dalton:
And thank you, Rick, because my next question, it's got to be this particular case probably has ramifications beyond Helms-Burton. You just mentioned COVID and some Chinese companies, so this is something to watch. When do you expect something to happen here, a decision, or what happens next with this ExxonMobil matter?
Rick Puente:
The Cuban state owned entities will file a reply to this response that was recently filed by ExxonMobil. Then the court may allow some discovery on some of these issues, some limited discovery. Then after that, the timetable on a ruling could be awhile. It's certainly an opinion that is going to catch the attention of a lot of foreign companies that are controlled or owned or managed by foreign governments and connection with their exposure involving conduct occurring extra territorially. Remember, this is conduct occurring outside U.S. soil. The whole argument of direct effects, for instance, what does that mean? And how is that going to be interpreted by this court, in this context? It's something that pay close attention to.
Dave Dalton:
Absolutely. Well, Rick, thank you for the segue because that's where I wanted to go next with this conversation. I want to talk about some non U.S. What we would term, "foreign companies" from here, in terms of how they're being affected, what they're doing. A lot of concepts to take in, and you guys were kind enough to supply me with some notes to get ready. Application of the blocking statute, issues of personal jurisdiction, amendments to the Cuban Asset Control Regulations. That's a lot to unwind. Chris, let's start with you. Starting where you like really, but there are things going on with non-U.S. companies, relating to all this. What's happened since we last talked?
Rick Puente:
What we have seen more recently is plaintiff's starting to sue more international, more non U.S. companies. If you recall, when the first lawsuits were filed, with the exception of the Exxon lawsuit against the Cuban government entities, there were a lot of lawsuits filed against U.S. companies. Even today, the majority of the lawsuits are either against the U.S. company or a U.S. and non-U.S. company together. We're starting to see more of an uptick of plaintiffs trying to sue non-U.S. companies under Helms-Burton. It will be interesting to see the decisions that have come out thus far have not really tackled the personal jurisdiction issues, very much. The U.S. Supreme Court has a personal jurisdiction case before, brought by Ford Motors.
Dave Dalton:
Okay.
Rick Puente:
That may be very relevant to these cases down here, particularly as to the issue of whether you can sue, if all of the allegedly bad conduct or harming conduct is really occurring in Cuba, whether you can even sue in the U.S. Anywhere. It doesn't matter that Miami may only be 90 miles away or Florida may want to be 90 miles away from Cuba. If none of the conduct occurred there, you may not be able to sue. We'll see what happens with those cases, most of them are relatively young.
Rick Puente:
The European companies that are being sued are going to the European Union and trying to ask for decisions or direction on their European blocking statutes.
Rick Puente:
The European Union is not moving too fast. I suspect, in part, because they want to see if these things just don't go away naturally.
Rick Puente:
Because the U.S. courts kick them out.
Dave Dalton:
Right.
Rick Puente:
If not, I think a lot of folks expect that there will be a decision out of the European Union, that's going to say our blocking statute is very clear, you can't have anything to do with a lawsuit under Helms-Burton if the blocking legislation specifically talks about this legislation.
Dave Dalton:
Good. Rick, anything you'd add to that? Again, this is per the conversation in terms of the non-U.S. companies and how they're being impacted and what's happening there. Anything you'd like to add to what Chris has told us?
Rick Puente:
Yes, Dave. I think Chris covered it very well there. I would add that, the issues of international comity are really being closely looked at and being tested by the federal courts here. What do they do because of the European companies that are EU members are saying, "We're facing criminal liability if we comply with the statute."
Rick Puente:
And that raises the question, for the federal judges here. Do they stall the litigation out of respect for foreign court decisions? That is an interesting dilemma because the criminal exposure and the penalties themselves are severe for non-compliance. That is another issue to closely watch. How the federal courts are going to be dealing with these issues of comity.
Dave Dalton:
You have a hunch, how they ruled? Stuff like that.
Rick Puente:
I can only comment on what we've seen so far.
Dave Dalton:
All right.
Rick Puente:
And what we've seen is that one judge, for instance, overruled a motion, to try to continue the case, to lift this stay, because of the European commission was taking too long to decide. There is an indication that the courts recognize that dilemma, and they're going to allow some time before they make a decision on lifting a stay until there's a decision before the European commission. Again, these cases are fluid they're cases of first impression, when the context of the Helms-Burton Act and courts may disagree, so we'll see.
Dave Dalton:
I don't know how you guys stay current with all this. I know that's your job. It seems like this is so fluid. Every time we talk it's changed so much. When clients come to you, I got to believe this is complicated and you're not always certain. How do you stay abreast of the latest and how do you know what might be coming next? What do you do?
Rick Puente:
Well, Dave, it's a great question. We have clients impacted by these issues, even though they have not, for instance, sued yet or subject to litigation. At Jones Day, we have a team in place that handles both the regulatory aspects that are super important here, and that you need to be aware of and updated on, on a constant basis. For instance, we had an amendment by the Trump administration to the Cuban Asset Control Regulations, adding to the list of hotels that are prohibited for instance, from U.S. persons, subject to U.S. jurisdiction, staying at those hotels. You have to stay abreast, it's our job.
Rick Puente:
Also, because the Title III is a statute of first impression, you have to really be very well in tune with these international legal issues that come into play and these constitutional law issues that come into play. There's a team of lawyers, here that we closely work together on these cases, and we try to keep abreast by making sure that we're aware of what the courts are doing, what the political side is doing, what the Trump administration for instance is doing.
Rick Puente:
And what's coming down the road. As you know, we're in an election year.
Dave Dalton:
Right.
Rick Puente:
And it's around the corner now, so we keep in tune of things.
Dave Dalton:
Since you brought it up Rick, let's talk about that. Major election coming up very shortly. Obviously the Trump, Biden showdown. Some think the Senate might be in play as well. This both to Rick and Chris, what's your take? Let's say Trump holds on. Trump's still the president for another four years. What's the impact on Title III matters? Or if former Vice President Biden wins, what do you see happening there? Is it too difficult to call, or do you have any inclination in terms of how these things might unwind?
Chris Pace:
It's Chris.
Chris Pace:
I think as for President Trump, if there's a continuation of his administration, we can expect that they will stay the course and they might even ratchet up as they just did recently. The pressure on Cuba though, that most recent move may have been a political move right before the election. The timing, in terms of letting lawsuits be filed under Helms-Burton and in increasing the pressure on Cuba, as well as Venezuela, are not so tied to an election. Those occurred years ago or within the past year. Certainly seems that's consistent with the Trump administration position and absent a substantial turnover in his administration. We would all expect that he'll continue it.
Chris Pace:
Much more difficult question when it comes to Vice President Biden. If he becomes the President of the United States, obviously when he was Vice President, he did so serving with a president who relaxed restrictions on Cuba, that was President Obama.
Chris Pace:
At the same time, Vice President Biden has spoken about taking tough stances on places like Venezuela and other countries, Nicaragua. He hasn't said a lot about Cuba. On Thursday, October 15th, both of them will be in Miami, Florida, unless there's health reasons that they can't do so.
Dave Dalton:
Right.
Chris Pace:
I will not be surprised if the question comes up in that context of, "Vice President Biden, what exactly is your position on Cuba? You served under a president who loosened restrictions on Cuba, and more recently you've talked tough about Cuba. What's your stand?" And we may know more than, but with President Trump, you can expect if he wins reelection, we are going to see a continuation of the pressure being placed on the Castro government to turn over power and concede to a democracy in Cuba.
Dave Dalton:
Interesting. Rick, anything you'd add?
Rick Puente:
Yes, Dave. I agree with all those comments made by Chris. From Biden, I would suspect that, one possibility as he may say. These are cold war era policies, and maybe go back as a rationale to what Obama had in play. The reality is, these cases could have a substantial impact on foreign policy issues, not only obviously as to Cuba directly, but also Venezuela and China. These are complicated issues, but very impactful issues that we need to keep a close eye on.
Dave Dalton:
Definitely, and we will. We'll leave it right there. You guys are always great. I learned something every time we talk. As Rick said, and I think I followed up, this story just doesn't sit still.
Dave Dalton:
You guys have a great week and thanks so much for being here today.
Rick Puente:
Take care, Dave.
Chris Pace:
Bye-bye.
Dave Dalton:
We'll be in touch. Bye now.
Rick Puente:
Bye.
Dave Dalton:
Title III of the Helms-Burton Act, provides the liability of persons who traffic in property confiscated by the Castro regime from U.S. nationals after the Cuban revolution, but since President Bill Clinton signed the act into law in 1996, Title III had been suspended through January 2019. Last May, the Trump administration lifted the suspension and there have been almost continuous development since. Jones Day's Rick Puente and Chris Pace are joining us again to fill us in on the latest. I'm Dave Dalton you're listening to Jones Day Talks.
Dave Dalton:
Jones Day partner Rick Puente, is a Florida bar certified international litigation and arbitration lawyer. Rick represents clients in complex, commercial and investment cases before courts and international arbitration tribunals involving witnesses, documents and proceedings in both English and Spanish, and in the U.S. and abroad. Partner Chris Pace, represents clients and commercial disputes, trade secrets and unfair competition cases, money laundering, and other criminal investigations and prosecutions and federal antitrust and RICO actions. Prior to joining Jones Day, Chris served as an assistant U.S. Attorney for the Southern district of Florida and was a law clerk to Supreme Court Justice, Anthony Kennedy. Rick, Chris, thanks for being here today.
Rick Puente:
Thanks Dave. Great to be here.
Chris Pace:
Great to be here, Dave.
Dave Dalton:
It's been a couple months since we last talked. Rick, just bring us up to speed a little bit for people who might have forgotten some of the details. What is Title III of the Helms-Burton Act, and why have we been talking about it recently?
Rick Puente:
Sure Dave. Title III of the Helms-Burton act is the third part of a statute that was passed many years ago, that allows U.S. nationals who had their properties confiscated by the Cuban government, sue in a federal court in the United States over the confiscated property.
Dave Dalton:
Okay, real good. Much has happened since we last talked. A couple court cases, were handing down relief to a plaintiff having appropriate standing to pursue a case. Tell us what happened in Havana Docks versus Carnival.
Rick Puente:
Sure, Dave. That case is interesting because it's pending here in the Southern district of Florida and was one of the first cases that was filed under Title III when the suspension was lifted in May 2019. In that case, initially, the federal judge denied the motion to dismiss, when Carnival filed it. Then another cruise line, which was sued involving the same plaintiff, involving the same allegations essentially, a few months later, granted the motion to dismiss and then reversed again. There was a bit of back and forth there. Most recently, the court denied Carnival's argument on constitutional standing under Article III. What had happened Dave, is that a case involving the airlines had been transferred to Texas. The argument was raised there that the airlines should be dismissed from the lawsuit because the plaintiff had not established sufficient evidence of standing under the pleadings to proceed with a lawsuit, under Article III. Very basic concept, but complex complicated concept.
Rick Puente:
The court in Texas ruled in the airline's favor and dismissed the case. Carnival and other cruise lines also had raised that argument and filed that case as a Notice of Authority in support of their motions to dismiss. The court denied, disagreeing with the Texas court and saying that the plaintiffs had satisfied injury, which there was some issue about whether the plaintiff had established concreteness of the injury, because at the end of the day, it was the Cuban government who had confiscated the property, not the third party who was now benefiting, deriving economic benefits.
Rick Puente:
The court disagreed and distinguished that case in Texas saying that the plaintiffs there had not alleged or had admitted conceded, that the injury in fact was not at plate because the particular defendant had not caused the injury in fact. Then basically the court found a lengthy opinion that there was standing and allowed the lawsuit to proceed, so that case is now in litigation against the cruise lines, against Carnival in particular, and is in the discovery phase.
Dave Dalton:
All right. Chris, do these recent developments bring about more clarity, in terms of the scope of Title III and what plaintiffs might be able to bring forward, or does this bring about a bit more confusion or indecision even?
Chris Pace:
I think it brings about less clarity, but in a way that is favorable to defendants. In other words, the first couple of rulings that came out under the Helms-Burton Act on motions to dismiss, denied the motion to dismiss. It was looking as if many of these claims were going to be able to go forward. Now we've definitely got a mixture of results. Rick just talked about the American airlines case.
Chris Pace:
There's also a case against Amazon that was dismissed. There's a few dismissals out there. I think plaintiffs are concerned as to their ability to maintain their claims. There's been a decision recently on the question of, "When did you acquire your claim?" And if you didn't acquire it within the right time period, you can be kicked out of court for that.
Dave Dalton:
Mm-hmm (affirmative).
Chris Pace:
Uncertainty has been brought into the process, that is to the benefit of the defendants in those cases, for the most part. Right now there are two different cases on appeal, one to the 5th circuit, one to the 11th circuit. Those appeals won't be decided for a while, but each of those appeals really has an opportunity to provide some clarity to the law because you're going to have an appellate court big on the issue, as opposed to simply a variety of district courts
Dave Dalton:
Has COVID slowed everything down Chris? Are they still hearing cases at about the pace they would have? In terms of timetable, what should people expect now?
Chris Pace:
I think it's slowed the courts of appeals, but not as much as we've certainly seen at the district court level. They're still moving pretty quickly, but not quite as quickly as before. At the district court level, so many civil cases saw a great slowdown from sometime around March to sometime around July.
Chris Pace:
We've started seeing cases picking up, and I would say the Helms-Burton cases are picking up at about the same tempo as other complex civil cases.
Dave Dalton:
Let's switch to, if there were ever a household name, this is one, ExxonMobil Rick, is suing some Cuba state owned entities. What's going on here? And talk about the role or the impact of the Foreign Sovereign Immunities Act, just give us an overview of what's happening here.
Rick Puente:
Sure Dave. That's an interesting case because it involves the petroleum assets that were owned by Standard Oil, which later became ExxonMobil, and involve a certified claim that was for over $70 million issued by the Foreign Claim Service Commission, pursuant to the International Claim Settlement Act. You may recall from the prior podcast, there are two types of buckets of claims. There's those that have been certified as to the owner and to the amount by the United States commission and the uncertified claim, while this one falls under the certified claim. That has a presumption of correctness as to the owner, then also, as to the amount which tagged along interest since the time period, that decision was entered, which was in the 1960s.
Dave Dalton:
Okay.
Rick Puente:
So what's really interesting there is that Exxon has sued essentially Cuban state owned entities. What you mean by state-owned entities, as that has been defined, is that the Cuban government is the majority shareholder or controlling owner of these entities.
Rick Puente:
These state owned entities, there are two in particular. They own, for instance, the service stations and the entity that processes the financial payments. They have moved to dismiss seeing that, one of the arguments they raised is that they're separate that they manage themselves separately, and apart from the Cuban government, even though they're state owned entities, they're subject to protection, to the extent that they are state owned entities by the Foreign Sovereign Immunities Act, which protects governments in general from litigation. There are exceptions to the Foreign Sovereign Immunities Act, and one of those exceptions is commercial activities. If those commercial activities are having direct effects on, U.S. companies that may be competing in the petroleum market, for example, then you can get around the Foreign Sovereign Immunities Act to the extended applies.
Rick Puente:
What's kind of interesting is the Helms-Burton Act. It's very lengthy Dave. One of the things it does is, it defines who persons are.
Rick Puente:
Persons under the statute, if you look at the statute, is defined to include state owned entities, agencies of the Cuban government. That's where they're distinguishing in their opposition papers that the Foreign Sovereign Immunities Act doesn't apply, and if it said while Title III covers that, it allows them to proceed with a lawsuit. And also that there's direct effects being filed in the United States. That's a general overview. There are declarations that have been filed. There are factual issues that need to be flushed out by the court, in connection with these allegations, before there's going to be a ruling on that motion.
Dave Dalton:
Where's this case being heard?
Rick Puente:
It's in the DC Circuit.
Dave Dalton:
I didn't know, given the state owned entity giant multinational energy company. I don't know if this is something that would go to some neutral court somewhere, Singapore or something, but this is being heard in DC.
Rick Puente:
Yeah. In a federal court, they're subject matter jurisdiction under the Foreign Sovereign Immunities Act, and the exceptions of the Foreign Sovereign Immunity Act. That case could have substantial precedential effect on future cases involving state owned entities, particularly where there's a statute creating liability, so one definitely to watch.
Chris Pace:
Rick, one of the protections in the Federal Legislative Scheme, obviously if you're going to create a cause of action in the country, you're going to allow your courts to hear it. But when you're suing a government owned entity, in most cases, you actually have to sue them in DC, which is what Exxon did here.
Rick Puente:
Okay.
Chris Pace:
I think that's really designed to be the protection. Exxon is based in Texas. Exxon probably would rather have sued them in Texas.
Chris Pace:
But the idea is, whether accurate or not, that the district courts in DC will be, or maybe, more sensitive to political and international issues, than district courts elsewhere in the country. As a policy matter, I may not agree with it, but I think that's the idea that Congress supports.
Dave Dalton:
Yeah.
Rick Puente:
Absolutely, and that's a great point. We'll see what happens there, but there's cases now, for instance, going on against the Chinese sovereign entities involving this whole COVID, so they're paying attention to this lawsuit. No doubt.
Dave Dalton:
And thank you, Rick, because my next question, it's got to be this particular case probably has ramifications beyond Helms-Burton. You just mentioned COVID and some Chinese companies, so this is something to watch. When do you expect something to happen here, a decision, or what happens next with this ExxonMobil matter?
Rick Puente:
The Cuban state owned entities will file a reply to this response that was recently filed by ExxonMobil. Then the court may allow some discovery on some of these issues, some limited discovery. Then after that, the timetable on a ruling could be awhile. It's certainly an opinion that is going to catch the attention of a lot of foreign companies that are controlled or owned or managed by foreign governments and connection with their exposure involving conduct occurring extra territorially. Remember, this is conduct occurring outside U.S. soil. The whole argument of direct effects, for instance, what does that mean? And how is that going to be interpreted by this court, in this context? It's something that pay close attention to.
Dave Dalton:
Absolutely. Well, Rick, thank you for the segue because that's where I wanted to go next with this conversation. I want to talk about some non U.S. What we would term, "foreign companies" from here, in terms of how they're being affected, what they're doing. A lot of concepts to take in, and you guys were kind enough to supply me with some notes to get ready. Application of the blocking statute, issues of personal jurisdiction, amendments to the Cuban Asset Control Regulations. That's a lot to unwind. Chris, let's start with you. Starting where you like really, but there are things going on with non-U.S. companies, relating to all this. What's happened since we last talked?
Rick Puente:
What we have seen more recently is plaintiff's starting to sue more international, more non U.S. companies. If you recall, when the first lawsuits were filed, with the exception of the Exxon lawsuit against the Cuban government entities, there were a lot of lawsuits filed against U.S. companies. Even today, the majority of the lawsuits are either against the U.S. company or a U.S. and non-U.S. company together. We're starting to see more of an uptick of plaintiffs trying to sue non-U.S. companies under Helms-Burton. It will be interesting to see the decisions that have come out thus far have not really tackled the personal jurisdiction issues, very much. The U.S. Supreme Court has a personal jurisdiction case before, brought by Ford Motors.
Dave Dalton:
Okay.
Rick Puente:
That may be very relevant to these cases down here, particularly as to the issue of whether you can sue, if all of the allegedly bad conduct or harming conduct is really occurring in Cuba, whether you can even sue in the U.S. Anywhere. It doesn't matter that Miami may only be 90 miles away or Florida may want to be 90 miles away from Cuba. If none of the conduct occurred there, you may not be able to sue. We'll see what happens with those cases, most of them are relatively young.
Rick Puente:
The European companies that are being sued are going to the European Union and trying to ask for decisions or direction on their European blocking statutes.
Rick Puente:
The European Union is not moving too fast. I suspect, in part, because they want to see if these things just don't go away naturally.
Rick Puente:
Because the U.S. courts kick them out.
Dave Dalton:
Right.
Rick Puente:
If not, I think a lot of folks expect that there will be a decision out of the European Union, that's going to say our blocking statute is very clear, you can't have anything to do with a lawsuit under Helms-Burton if the blocking legislation specifically talks about this legislation.
Dave Dalton:
Good. Rick, anything you'd add to that? Again, this is per the conversation in terms of the non-U.S. companies and how they're being impacted and what's happening there. Anything you'd like to add to what Chris has told us?
Rick Puente:
Yes, Dave. I think Chris covered it very well there. I would add that, the issues of international comity are really being closely looked at and being tested by the federal courts here. What do they do because of the European companies that are EU members are saying, "We're facing criminal liability if we comply with the statute."
Rick Puente:
And that raises the question, for the federal judges here. Do they stall the litigation out of respect for foreign court decisions? That is an interesting dilemma because the criminal exposure and the penalties themselves are severe for non-compliance. That is another issue to closely watch. How the federal courts are going to be dealing with these issues of comity.
Dave Dalton:
You have a hunch, how they ruled? Stuff like that.
Rick Puente:
I can only comment on what we've seen so far.
Dave Dalton:
All right.
Rick Puente:
And what we've seen is that one judge, for instance, overruled a motion, to try to continue the case, to lift this stay, because of the European commission was taking too long to decide. There is an indication that the courts recognize that dilemma, and they're going to allow some time before they make a decision on lifting a stay until there's a decision before the European commission. Again, these cases are fluid they're cases of first impression, when the context of the Helms-Burton Act and courts may disagree, so we'll see.
Dave Dalton:
I don't know how you guys stay current with all this. I know that's your job. It seems like this is so fluid. Every time we talk it's changed so much. When clients come to you, I got to believe this is complicated and you're not always certain. How do you stay abreast of the latest and how do you know what might be coming next? What do you do?
Rick Puente:
Well, Dave, it's a great question. We have clients impacted by these issues, even though they have not, for instance, sued yet or subject to litigation. At Jones Day, we have a team in place that handles both the regulatory aspects that are super important here, and that you need to be aware of and updated on, on a constant basis. For instance, we had an amendment by the Trump administration to the Cuban Asset Control Regulations, adding to the list of hotels that are prohibited for instance, from U.S. persons, subject to U.S. jurisdiction, staying at those hotels. You have to stay abreast, it's our job.
Rick Puente:
Also, because the Title III is a statute of first impression, you have to really be very well in tune with these international legal issues that come into play and these constitutional law issues that come into play. There's a team of lawyers, here that we closely work together on these cases, and we try to keep abreast by making sure that we're aware of what the courts are doing, what the political side is doing, what the Trump administration for instance is doing.
Rick Puente:
And what's coming down the road. As you know, we're in an election year.
Dave Dalton:
Right.
Rick Puente:
And it's around the corner now, so we keep in tune of things.
Dave Dalton:
Since you brought it up Rick, let's talk about that. Major election coming up very shortly. Obviously the Trump, Biden showdown. Some think the Senate might be in play as well. This both to Rick and Chris, what's your take? Let's say Trump holds on. Trump's still the president for another four years. What's the impact on Title III matters? Or if former Vice President Biden wins, what do you see happening there? Is it too difficult to call, or do you have any inclination in terms of how these things might unwind?
Chris Pace:
It's Chris.
Chris Pace:
I think as for President Trump, if there's a continuation of his administration, we can expect that they will stay the course and they might even ratchet up as they just did recently. The pressure on Cuba though, that most recent move may have been a political move right before the election. The timing, in terms of letting lawsuits be filed under Helms-Burton and in increasing the pressure on Cuba, as well as Venezuela, are not so tied to an election. Those occurred years ago or within the past year. Certainly seems that's consistent with the Trump administration position and absent a substantial turnover in his administration. We would all expect that he'll continue it.
Chris Pace:
Much more difficult question when it comes to Vice President Biden. If he becomes the President of the United States, obviously when he was Vice President, he did so serving with a president who relaxed restrictions on Cuba, that was President Obama.
Chris Pace:
At the same time, Vice President Biden has spoken about taking tough stances on places like Venezuela and other countries, Nicaragua. He hasn't said a lot about Cuba. On Thursday, October 15th, both of them will be in Miami, Florida, unless there's health reasons that they can't do so.
Dave Dalton:
Right.
Chris Pace:
I will not be surprised if the question comes up in that context of, "Vice President Biden, what exactly is your position on Cuba? You served under a president who loosened restrictions on Cuba, and more recently you've talked tough about Cuba. What's your stand?" And we may know more than, but with President Trump, you can expect if he wins reelection, we are going to see a continuation of the pressure being placed on the Castro government to turn over power and concede to a democracy in Cuba.
Dave Dalton:
Interesting. Rick, anything you'd add?
Rick Puente:
Yes, Dave. I agree with all those comments made by Chris. From Biden, I would suspect that, one possibility as he may say. These are cold war era policies, and maybe go back as a rationale to what Obama had in play. The reality is, these cases could have a substantial impact on foreign policy issues, not only obviously as to Cuba directly, but also Venezuela and China. These are complicated issues, but very impactful issues that we need to keep a close eye on.
Dave Dalton:
Definitely, and we will. We'll leave it right there. You guys are always great. I learned something every time we talk. As Rick said, and I think I followed up, this story just doesn't sit still.
Dave Dalton:
You guys have a great week and thanks so much for being here today.
Rick Puente:
Take care, Dave.
Chris Pace:
Bye-bye.
Dave Dalton:
We'll be in touch. Bye now.
Rick Puente:
Bye.
Dave Dalton:
For complete bios and contact information for Rick Puente and Chris Pace go to jonesday.com. While you're there, visit our insights page where you'll find commentaries, white papers, alerts, newsletters, more podcasts, including previous podcasts on Helms-Burton, videos and other important content. Subscribe to Jones Day Talks at Apple Podcasts and wherever else, podcasts are found as always. We appreciate your listening. I'm Dave Dalton. We'll talk to you next time.
Speaker 6:
Thank you for listening to Jones Day Talks, comments heard on Jones day talks should not be construed as legal advice regarding any specific facts or circumstances. The opinions expressed on Jones Day Talks are those of lawyers appearing on the program and do not necessarily reflect those of the firm for more information, please visit jonesday.com.
For complete bios and contact information for Rick Puente and Chris Pace go to jonesday.com. While you're there, visit our insights page where you'll find commentaries, white papers, alerts, newsletters, more podcasts, including previous podcasts on Helms-Burton, videos and other important content. Subscribe to Jones Day Talks at Apple Podcasts and wherever else, podcasts are found as always. We appreciate your listening. I'm Dave Dalton. We'll talk to you next time.
Speaker 6:
Thank you for listening to Jones Day Talks, comments heard on Jones day talks should not be construed as legal advice regarding any specific facts or circumstances. The opinions expressed on Jones Day Talks are those of lawyers appearing on the program and do not necessarily reflect those of the firm for more information, please visit jonesday.com.
