Havana Docks Corp. v. Carnival Corp.

Decision Date14 September 2020
Docket NumberCase No. 19-cv-21724-BLOOM/McAliley
CourtU.S. District Court — Southern District of Florida

THIS CAUSE is before the Court upon Defendant Carnival Corporation's Motion to Dismiss Complaint Pursuant to Rule 12(b)(1) and Motion to Dismiss Claims Based on Pre-2004 Conduct Pursuant to Rule 12(b)(6), ECF No. [93] ("Motion"). Plaintiff Havana Docks Corporation filed a Response in Opposition, ECF No. [101] ("Response"), to which Defendant filed a Reply, ECF No. [105] ("Reply"). Defendant also submitted two Notices of Supplemental Authority in Support of its Motion, ECF Nos. [110] and [116], and Plaintiff submitted a Notice of Filing Supplemental Authority, ECF No. [120].1 The Court has carefully considered the Motion, the Response, the Reply, the record in this case, the applicable law, and is otherwise fully advised. For the reasons set forth below, the Motion is denied.


Since Fidel Castro seized power in Cuba in 1959, Cuba has been plagued by "communist tyranny and economic mismanagement," that has substantially deteriorated the welfare and healthof the Cuban people. See 22 U.S.C. §§ 6021(1)(A), (2). 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, see id. §§ 6021(4), (24), and the United States has consistently sought to impose effective international sanctions for these violations against the Castro regime, see id. §§ 6021(8)-(10).

In 1996, Congress passed Title III of the Cuban Liberty and Democratic Solidarity Act of 1996, 22 U.S.C. § 6021, et seq. (the "LIBERTAD Act," "Title III," or the "Act"), commonly referred to as the Helms-Burton Act, "to strengthen international sanctions against the Castro government" and, relevant to the instant case, "to protect United States nationals against confiscatory takings and the wrongful trafficking in property confiscated by the Castro regime." 22 U.S.C. §§ 6022(2), (6). Under Title III of the Act, Congress denounced the Cuban Government's history of confiscating property of Cuban citizens and U.S. nationals, explaining that "[t]he wrongful confiscation or taking of property belonging to United States nationals by the Cuban Government, and the subsequent exploitation of this property at the expense of the rightful owner, undermines the comity of nations, the free flow of commerce, and economic development." 22 U.S.C. §§ 6081(2)-(3). The Act explains that foreign investors who traffic in confiscated properties through the purchase of equity interests in, management of, or entry into joint ventures with the Cuban Government to use such properties "complicate any attempt to return [these expropriated properties] to their original owners." Id. §§ 6081(5), (7). The LIBERTAD Act cautions that:

[t]his "trafficking" in confiscated property provides badly needed financial benefit, including hard currency, oil, and productive investment and expertise, to the current Cuban Government and thus undermines the foreign policy of the United States—
(A) to bring democratic institutions to Cuba through the pressure of a general economic embargo at a time when the Castro regime has proven to be vulnerable to international economic pressure; and(B) to protect the claims of United States nationals who had property wrongfully confiscated by the Cuban Government.

Id. §§ 6081(6)(A)-(B).

Further, the lack of effective international remedies for the wrongful confiscation of property and for unjust enrichment from the use of that property by foreign governments at the expense of the rightful owners left U.S. citizens without protection against wrongful confiscations by foreign nations and their citizens. Id. § 6081(10). Congress therefore concluded that, "[t]o deter trafficking in wrongfully confiscated property, United States nationals who were the victims of these confiscations should be endowed with a judicial remedy in the courts of the United States that would deny traffickers any profits from economically exploiting Castro's wrongful seizures." Id. § 6081(11); see also 22 U.S.C. § 6082(a)(1)(A). As a result, in passing Title III of the LIBERTAD Act, "Congress created a private right of action against any person who 'traffics' in confiscated Cuban property." Garcia-Bengochea v. Carnival Corp., 407 F. Supp. 3d 1281, 1284 (S.D. Fla. 2019) (citing 22 U.S.C. § 6082(a)(1)(A); 22 U.S.C. § 6023(13)(A)).

Shortly after Helms-Burton was passed, however, the President invoked Title III's [suspension] provision, and "Title III has since been waived every six months, . . . and has never effectively been applied." Odebrecht Const., Inc. v. Prasad, 876 F. Supp. 2d 1305, 1312 (S.D. Fla. 2012). That changed on April 17, 2019, when the U.S. Department of State announced that the federal government "will no longer suspend Title III." See U.S. Department of State, Secretary of State Michael R. Pompeo's Remarks to the Press (Apr. 17, 2019), https://www.state.gov/remarks-to-the-press-11/.

Id.; see also 22 U.S.C. § 6085(c) (presidential power to suspend the right to bring a cause of action under Title III). On May 2, 2019, the suspension of claimants' rights to bring actions under Title III was lifted, enabling them to file suit against alleged traffickers.

B. This Case

On May 2, 2019, Plaintiff filed this action against Defendant pursuant to Title III of the LIBERTAD Act. ECF No. [1]. On May 30, 2019, Defendant filed a motion to dismiss the then-pending complaint, ECF No. [17], which motion the Court denied on August 27, 2019. ECF No. [47]. Defendant then filed its answer and affirmative defenses, ECF No. [50], and later its first amended answer and affirmative defenses, ECF No. [59]. In light of the Court's subsequent rulings in Plaintiffs' related cases involving MSC Cruises and Norwegian Cruise Line, Defendant moved for reconsideration of the Court's order on the motion to dismiss, ECF Nos. [63] and [65], and Plaintiff moved for leave to file a first amended complaint, ECF No. [74]. On April 17, 2020, the Court entered an Omnibus Order granting Plaintiff's motion for leave and denying as moot Defendant's motion for reconsideration. ECF No. [79]. The Court later denied Defendant's motion for certification of interlocutory appeal and its motion to stay discovery. ECF No. [104].

On April 20, 2020, Plaintiff filed the operative Amended Complaint. ECF No. [81]. The Amended Complaint alleges the following facts: Plaintiff is a U.S. national, as defined by 22 U.S.C. § 6023(15), and "is the rightful owner of an interest in and certified claim to certain commercial waterfront real property in the Port of Havana, Cuba," identified as the Havana Cruise Port Terminal (the "Subject Property"). ECF No. [81] ¶ 6. Plaintiff continuously owned, possessed, managed, and used the Subject Property from 1917 until the Cuban Government confiscated it in 1960, id. ¶ 7, and that, since the confiscation, the Subject Property has not been returned, nor has Plaintiff received adequate or effective compensation for the confiscation of the Subject Property, id. ¶¶ 9-10. Plaintiff's claim to the Subject Property has never been settled pursuant to any international claim settlement agreement or other settlement procedure. Id. ¶ 10.

Plaintiff's ownership interest in and claim to the Subject Property has been certified by the Foreign Claims Settlement Commission (the "FCSC") pursuant to the International Claims Settlement Act of 1949, 22 U.S.C. § 1621, et seq. (the "Claims Settlement Act"). Id. ¶ 12.2 In the Certified Claim, a copy of which is attached to Plaintiff's Amended Complaint, the FCSC found, based on the record before it, that:

[Havana Docks] obtained from the Government of Cuba the renewal of a concession for the construction and operation of wharves and warehouses in the harbor of Havana, formerly granted to its predecessor concessionaire, the Port of Havana Docks Company; that claimant acquired at the same time the real property with all improvements and appurtenances located on the Avenida del Puerto between Calle Amargura and Calle Santa Clara in Havana, facing the Bay of Havana; . . . and that claimant corporation also owned the mechanical installations, loading and unloading equipment, vehicles and machinery, as well as furniture and fixtures located in the offices of the corporation.

ECF No. [81-1] at 7. "The concession granted the Plaintiff a term of 99 years for the use of, improvement, construction upon, operation and management of the Subject Property," from which Plaintiff benefitted until 1960, when the Subject Property was confiscated by the Cuban Government, along with all of its other property interests. ECF No. [81] ¶ 15. "The concession never expired by its term." Id. Rather, when the Subject Property was confiscated, "Havana Docks still had a balance of 44 years of concessionary rights remaining . . . [and] Plaintiff has never received any compensation nor been indemnified for the expropriation of the Subject Property, including for the concession or any other property interests." Id. ¶¶ 15, 19.

According to the Amended Complaint, Defendant trafficked in the Subject Property before 2004 through Airtours Plc ("Airtours") and Costa Cruises ("Costa"). Id. at 8-10. Specifically, between April 1996 and June 2001, Carnival owned a 26% to 30% interest in Airtours. Id. ¶ 24.Mickey Arison ("Arison"), Defendant's present chairman and former CEO, and Howard Frank ("Frank"), Costa's present chairman and Defendant's former COO and vice chairman, sat on Airtours' board of directors during this period. Id. ¶ 26. According to Plaintiff, Airtours trafficked in the Subject Property between 1998 and at least through 2001, when Defendant sold its investment in Airtours. Id. ¶¶ 26-28. During this time, Airtours "knowingly and intentionally operated...

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