By: Tom On: October 1, 2020 In: Hague Service Convention, International Service of Process Comments: 0
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Service of process cases involving Cuba can arise in multiple international venues. For example, one of our clients wanted to serve process upon a corporate defendant in the United Kingdom seeking redress for purchases made in Cuba.

The case involved agricultural goods produced on a Cuban plantation that was confiscated by the Cuban government in 1959.

For many years the Cuban government sold the crops grown on this plantation to a British company. The heirs to the plantation were now seeking damages under the Helms-Burton Act (HBA).[1]

The client had done some research and became concerned after discovering that in response to the HBA, the European Union had enacted a blocking statute.[2]

Purpose of the Helms-Burton Act

When the Helms-Burton Act was passed in 1996, the Act’s principle purpose was to place the Foreign Assistance Act of 1962[3] (which authorized the Cuban blockade) on steroids.

More specifically, the HBA:

  • Extended the territorial application of the initial embargo to apply to foreign companies trading with Cuba
  • Subjected foreign companies that allegedly “trafficked”[4] in property formerly owned by US citizens but confiscated by Cuba to potential criminal, civil, and administrative liability
  • Created, under Title III of the Act, a private cause of action that had extraterritorial reach

Response to the Helms-Burton Act

Many nations were outraged by the extraterritorial effect of Title III. Accordingly, these countries enacted blocking statutes.

These statutes permit a national of the applicable country who is subjected to Title III liability to sue the Title III litigant for damages in the defendant’s home country. In addition, the blocking statutes mandate that a judgment obtained under Title III not be enforced in the defendant’s home country. Besides these rights, the blocking statutes almost uniformly prohibit compliance with the Helms-Burton prohibitions, including requests by the courts of the United States.[5]

Thus, given the secondary literature, one can see why our client was concerned with his ability to serve process on a UK defendant.

Specifics of the EU’s Blocking Statute

In the case of the EU’s blocking statute, the last statement requires some clarification. Article 5 of the EU’s blocking statute actually states:

No person [covered under this Act] shall comply, whether directly or through a subsidiary or other intermediary person, actively or by deliberate omission, with any requirement or prohibition, including requests of foreign courts, based on or resulting, directly or indirectly, from the laws specified in the Annex or from actions based thereon or resulting therefrom.[6]

Article 11 of the EU blocking statute makes it clear that the scope of the Act is limited to “natural persons” and corporate entities. Thus the act does per se extend to the courts and governmental administration.[7]

On the other, when European courts and agencies adjudicate the rights on natural persons or corporations, it will trigger application of the EU’s blocking statute. This means regardless of how evidence is to be taken in the EU in a Title III action (either pursuant to a Letter of Request under the Hague Evidence Convention or via a Letter Rogatory), the blocking statute will protect the EU witness from producing the requested evidence.

The EU’s Blocking Statute & Service of Process Under the HBA

But does this logic also apply to service of process under the HBA?

Neither the HBA nor the EU’s blocking statute modifies or amends the service of process rules or the Hague Service Convention.[8]

In the case of the UK, the EU’s blocking statute is no longer applicable because the UK has left the EU,[9] and the UK does not appear to have enacted its own blocking statute.

Even if a UK blocking statute exists, however, it would not apply because a blocking statute (of the UK or anywhere) would have no effect on Hague service by mail[10] or solicitor.[11] The reason is simple: federal express and solicitors are document handlers – they do not read and study documents.[12]

Thus HBA service in the UK via mail or via a solicitor is likely to be successful.

What the Above Means for Future HBA Litigation

Having read this far you may be wondering why we are discussing such an arcane law that concerns events from 60 years in the past. The reason has to do with the application of the Title III.

Presidents are political creatures. Given the international reaction to the enactment of the HBA, Presidents Clinton, Bush, and Obama suspended claimants’ rights to file Title III actions. President Trump, however, allowed the suspension of Title III actions to sunset on May 2, 2019.[13]

“Nearly 60 US companies with presence in Cuba are doing [business] under authorizations issued by the Treasury’s Office of Foreign Assets Control [OFAC], which handles a number of US sanctions programs. But having an OFAC license may not be enough to protect [these] businesses from lawsuits.”[14]

Not surprisingly, litigation under HBA followed almost immediately upon the May 2019 expiration of Title III suspension.[15] These cases are likely to be a harbinger of a tsunami of litigation for two key reasons.

  1. There is a large amount of money at stake,[16] and
  2. There are far more foreign companies doing business with Cuban companies than American companies.

Bottom line: If you are filing an HBA claim, contact LLS for assistance with service of process. We have more than 35 years of experience navigating the intricacies of foreign law increasing the likelihood of a positive outcome.

Contact LLS today to learn more about how we can assist you.

Call 1-800-755-5775 or simply fill out our online inquiry form.

Do you have recent experience attempting service via the Helms-Burton Act? Moreover do you believe a future administration will again suspend Title III of the Helms-Burton Act (as was done by Clinton, Bush, and Obama)? And if so, what impact would that have on current litigation under Title III?

We welcome your comments below.

Notes
[1] 22 U.S.C. §§ 60216091. This act is also known as the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1995.
[2] Council Regulation (EC) No 2271/96 of 22 November 1996. EC 2271/96
[3] 22 U.S.C. § 2151 et seq.
[4] This term is broadly defined.
[5] Andrew J Markus: The Practical Effect of Blocking Statutes on Helms-Burton Title III Actions. Carlton Fields August 6, 2019; https://www.carltonfields.com/insights/expect-focus/2019/the-practical-effect-of-locking-statutes-on-helms.
[6] Supra note 2.
[7] HHR: How Article 5 of the EU’s blocking statute is to be interpreted is still in its infancy. See Bank Melli Iran v Telekom Deutschland GmbH, OJ C 201, 15.6.2020, Hanseatisches Oberlandesgericht Hamburg; First Reference to the European Court of Justice to Interpret the EU Blocking Statute in the Bank Melli Iran v. Telekom Deutschland GmBH Case. July 1, 2020; https://www.hugheshubbard.com/news/first-reference-to-the-european-court-of-justice-to-interpret-the-eu-blocking-statute-in-the-bank-melli-iran-v-telekom-deutschland-gmbh-case.
[8] As demonstrated by the Foreign Sovereign Immunities Act, §1608, when Congress wants special rules of service of process, it knows how to enact them.
[9] BBC: Brexit: The UK has officially left the EU – what happens next? 31 January 2020; https://www.bbc.com/news/world-europe-51307874.
[10] Article 10(a).
[11] Article 10(b).
[12] Service to the UK pursuant to Article 5 will trigger a review of the documents. It is not clear whether the UK Central Authority would reject a request for service in HBA litigation.
[13] Boris Bershteyn Jamie L. Boucher Eytan J. Fisch et al.: Under Helms-Burton Act, Entities With Business Ties to Cuba Now at Risk of Lawsuits. Skadden, Arps, Slate, Meagher & Flom LLP. May 9, 2019; https://www.skadden.com/insights/publications/2019/05/under-helms-burton-act.
[14] David Smiley and Nora Gamez Torres: Carnival Corp. is the first U.S. company sued for using ‘stolen’ property in Cuba. Miami Herald May 05, 2019; https://www.miamiherald.com/news/local/community/miami-dade/article229919294.html#storylink=cpy.
[15] For example see: American Sugar v Xinjiang Goldwind Science & Technology, 1:20-cv-22471-DPG (SD FL 2020); Glen v. American Airlines, Case No. 4:20-cv-482-A (N.D. Tex. Aug. 3, 2020)(holding the plaintiff lacked standing); Gonzalaz v Amazon, 19-23988-Civ-Scola; and Central Santa Lucia L.C. v. Meliá Hotels International S.A. (a Spanish case holding the plaintiffs responses for court costs and stating that it was not competent to assess whether the action of the Cuban government 60 years ago were lawful).
[16] For example, American Sugar (id.) is seeking $97M.

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