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Libertad Act One Year Later: Expected Flood of Cuba-Related Litigation Is a Trickle

On April 17, 2019, the Trump administration reversed course on more than 20 years of Cuban policy and announced that it would end the suspension of Title III of the Libertad Act, permitting US nationals to bring claims against entities “trafficking” in properties owned by them in Cuba and confiscated by the Castro regime.

When the suspension was lifted on May 2, 2019, lawyers and clients alike expected to see a flood of litigation. However, one year has now passed, and while several suits were filed early on, there has not been the flood of litigation originally anticipated.

Specifically, 24 lawsuits have been filed to date, involving both certified (that is, the almost 6,000 claims that were previously adjudicated and certified by the US Foreign Claims Settlement Commission in its 1964 and 2005 programs) and uncertified claims. The plaintiffs include both individuals and companies, several of whom have filed multiple suits. The defendants include both foreign and domestic companies, and range from hotels, hotel booking websites, airlines, and cruise lines, to credit card companies, financial institutions, and online retailers.

The relative dearth of litigation may be due to a number of factors. Claimants holding certified claims appear reluctant to engage in yet another costly legal process, and they continue to press the Administration for some kind of settlement. In addition, plaintiffs face significant challenges in asserting claims, such as obtaining jurisdiction over defendants, achieving valid service of process, and generally acquiring the necessary proof of their claims. In particular, potential plaintiffs face significant obstacles to obtaining key evidence to prove the bases of their claims, such as proof of ownership of the property allegedly subject to “trafficking.” Moreover, the statute imposes a nearly $7,000 filing fee to initiate suit. It is also possible that, because the law has never before been tested or interpreted, plaintiffs may be waiting in the wings to see how the jurisprudence develops.

On the other hand, the results of the Presidential election this year could produce a number of new Libertad Act cases at the end of this year because a new Administration could again suspend Title III, which would bar new Libertad Act cases from being filed (a new suspension would not affect pending cases).
As the cases have developed to date, defendants likewise face challenges as a result of the complete lack of substantive case law on the meaning and application of the Act. Even the case law that has emerged from the early lawsuits is unclear and inconsistent. In addition, courts thus far have been quite reluctant to dismiss claims and have allowed plaintiffs multiple opportunities to amend their complaints.

At the moment, several motions to dismiss are fully briefed and ripe for decision. Defendants raise arguments relating to personal jurisdiction, constitutional standing, statutory standing, and the sufficiency of factual allegations. The questions are novel and complicated. The courts will likely take their time grappling with the correct answers, and any decisions will likely be appealed. Thus, it could be several years before any reliable body of case law is established.

Still, the past year has seen progress, and this area of law has slowly begun to develop. For a detailed analysis of the significant Title III activity from the past year, click the link below.

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