Cuba Business Report’s editor interviews U.S. attorney, Daniel R. Zim, on the “what’s-next” scenario for Helms-Burton claimants. Mr. Zim is the principal attorney at Zim Travel Law, PLLC, a firm specializing in travel law located in Fairfax County, Virginia. He is also the author of several papers on U.S.- Cuba relations.
Mr. Zim’s published works include an academic work titled: Straining the Special Relationship: British and U.S. Policies Toward the Cuban Revolution, 1959 – 1961,” (link) which presents a new perspective of the US-Cuba relationship and examines why the United Kingdom was able to remain both an ally of the United States and pursue its own interests in Cuba. He also wrote an important letter to the editor, “Luis Posada Carriles was a terrorist, not just a ‘militant,’” published in the Washington Post.
A part of his practice involves giving presentations to travel agents and lawyers on the travel restrictions imposed on American citizens by the U.S. government, vis-a-vis Cuba.
“It’s not even a drop in the bucket but it is what I can contribute,” he told me. “Policymakers are the ones who need to make things right.”
Daniel Zim is an Active Member in Good Standing with the Virginia State Bar and the Cuban-American community.
We ended up talking in-depth after I approached Daniel with a handful of questions on the ‘what’s-next scenario’ for Helms-Burton Title III (Libertad Act) claimants. These questions were inspired by the recent outburst of cases hitting the media. It was like a wild-west shootout in the U.S. justice system, whereby everybody and their brothers jumped on the Helms-Burton bandwagon with claims ranging from those against the Spanish hotels, the Standard Oil (Esso) claim, the people who believe they own some of Cuba’s ports, to the man who thinks he owns the airport.
There are approximately 20 claims, to date, according to the John Kavulich website, Cuba Trade.Org.
Cuba Business Report: Daniel, let’s discuss the current rash of Helms-Burton Title III court cases that have recently made headlines. You are an attorney in the United States. What’s the process for those unfamiliar with the legal process in the U.S? My general thoughts are that they have not considered the “what’s next?” scenario.
Let’s say one of these people suing under the Helms-Burton Title III is successful in obtaining a judgment. What’s the next step? Would the company being sued then appeal the decision?
Mr. Zim:
The only reason why there would be a judgment in a Helm-Burton action is if the parties cannot settle before or during trial or if the defendants fail to get the case dismissed. The defendant has a number of options if that occurs. Most immediately, the defendant can file post-trial motions such as a motion to reconsider or a motion to set aside the verdict. Those types of actions usually don’t succeed but they could be used strategically to delay the entry of a judgment.
Regardless of whether or not, the defendant decides to file post-trial motions, he or she certainly has a right to appeal the verdict to a federal appeals court. If Defendant-Appellant fails at the federal appellate level he or she can appeal to the U.S. Supreme Court.
Cuba Business Report: Earlier you said that the defendant can file post-trial motions as a delaying tactic. What is the advantage for the defendant of delaying and creating obstacles for the plaintiff? In that case, the defendant would be accused of delaying justice that is 60 years in the making, would he not?
Mr. Zim:
Getting back to the delay strategy, time is really on the defendant’s side. But time, unfortunately, is not on the side of the plaintiff or the Trump administration in these lawsuits because the next president, whether he or she is elected next year or in five years, has the power to suspend the Helms-Burton lawsuits.
This is not only hypothetical, it’s also not without precedent. In 1981, a case came before the U.S. Supreme Court which involved nearly the same facts as the Helms-Burton litigation only it involved property claims against Iran to recover debts purportedly owed by the government of Iran.
The dispute in Dames & Moore vs. Regan arose when the Reagan administration reached an agreement with the government of Iran to (1) terminate legal proceedings in U.S. courts involving claims by U.S. nationals against Iran; (2) to nullify attachments against Iranian property entered by U.S. courts to secure any judgments against Iran, and (3) to transfer such claims from U.S. courts to a new arbitration tribunal.
The Reagan administration took this action by executive order without the approval of Congress arguing that the Executive Branch has plenary power in the area of foreign policy which supersedes the need to seek Congressional approval for the suspension of the Iran property claims in litigation and the creation of a new arbitration panel to deal with the property claims.
The U.S. Supreme Court agreed and found that the administration’s actions were authorized under the International Emergency Economic Powers Act (IEEPA). It further ordered the suspension of claims filed in U.S. courts.
So, theoretically, the next president could suspend Helms-Burton litigation or judgments on the basis that the president is supreme in its authority to conduct foreign policy. (By the way, the same rationale – presidential power – was originally used to enact the ban on travel to Cuba when it was first enacted).
So, since time is not on the side of the Helms-Burton plaintiffs and these cases can drag on for five to ten years, they would have a strong incentive to settle even for a very small fraction of the damages they are originally requesting. Defendants also have strong incentives to settle for various other reasons but the ball is really in the plaintiff’s court because they need a satisfying victory as fast as possible. Therefore, because of the relatively more desperate position plaintiffs are in, I believe defendants have the upper hand in this litigation.
Cuba Business Report: Then let’s say, for example, that the appeal is denied. Is a judgment then made against Cuba? Cuba has, in the past, said that it does not honor judgments obtained in a U.S. court. Added to this potential scenario, let’s suppose, the company in question is European or Canadian company, both of which have blocking statutes in place. Canada, for example, has the Foreign Extraterritorial Measures Act (FEMA) legislation. And, much like the Canadian blocking statute, the European Union has come out swinging, issuing its own statement on the decision of the United States to further activate Title III, saying:
“The EU will consider all options at its disposal to protect its legitimate interests, including in relation to its WTO rights and through the use of the EU Blocking Statute. The Statute prohibits the enforcement of U.S. courts judgments relating to Title III of the Helms-Burton Act within the EU, and allows EU companies sued in the U.S. to recover any damage through legal proceedings against U.S. claimants before EU courts.”Source
Could you comment on the purpose of the blocking statutes?
Mr. Zim:
Yes. Let me first explain the Canadian legislation. FEMA was enacted with the intention of protecting Canadian sovereignty, including Canada’s international trading and commercial interests, by allowing the Canadian government to respond to extraterritorial assertions of foreign jurisdiction which are allowed by the U.S. government under Helms-Burton.
According to FEMA, judgments issued under Title III of the Helms-Burton Act will not be recognized or enforced in Canada. In addition, the Canadian blocking statute allows Canadians to use Canadian courts to sue the person who has instituted an action under the Helms-Burton Act, even while proceedings are ongoing in the United States. This will allow Canadians to claim any amounts that have been obtained against them, including legal expenses, and losses or damages incurred.
Regarding the EU legislation, you very correctly note that Federica Mogherini and Cecilia Malmström, both top trade officials in the EU, came out with a very terse statement on the decision of the United States to further activate Title III of the Helms Burton (Libertad) Act. They did not mince words. They basically said that U.S. sanctions are illegal. They violate international law and the EU will do everything in its power to prevent any Helms-Burton plaintiff from recovering even a dime from this litigation.
Cuba Business Report: Could you further comment on what effect the Canadian and EU blocking statutes will have on any pending or future litigation?
Mr. Zim:
Yes. It would be a long time before the Canadian and European blocking statutes are invoked, if ever, as a consequence of Helms-Burton litigation. And they really illustrate the futility and extreme complexity of bringing Helms-Burton claims really are.
In addition to the significant legal hurdles based on the merits of bringing a colorable claim that is 60 years old on behalf of a distant ancestor, these cases, if not settled, can really drag on for years and years involving the courts of multiple countries. So, yes, a court in a foreign country can effectively nullify a verdict in U.S. courts that has fully run its course through the appellate process.
In international law, the nations are bound by the concept of comity, which similar to the “full faith and credit” clause of the U.S. Constitution requires legal reciprocity. In other words, a judgment by a foreign nation’s court must be respected and enforced by a U.S. court.
The scenario you have depicted creates conflict of law problems, the likes which we have never seen. A valid U.S. verdict that results in a loss for the defendant and a valid foreign verdict that results in a win for that same person or corporate entity. Which verdict trumps the other is anyone’s guess. You could literally go around in circles on this question forever and ever.
Cuba Business Report: So then what do the plaintiffs’ attorneys hope to achieve through this litigation if recovery seems so distant to you?
Mr. Zim:
That’s a good question. I’m not quite sure I know how to answer it. Maybe, they hope to sustain their respective practices for the next four to five years?
Look. I’m not out here to disparage attorneys or their clients. But the reality is that there are now literally dozens of opportunistic lawyers in South Florida bringing these cases in federal court whom I don’t believe are setting realistic expectations with their clients as to the likely outcome of these suits.
Their clients feel robbed, cheated and they are mad as hell. Many of them have earnestly invested their energy, their life’s work and their ingenuity, everything they had in Cuba’s version of the American Dream and the dream dissipated practically overnight when the Cuban government nationalized their property. And, unfortunately, one of the longest international conflicts the world has ever seen endured, precluding any chance of a settlement between the United States and Cuba for more than a generation.
Look. I can’t get into these peoples’ heads and read their minds but they probably feel that there is no way the Cuban government with its bankrupt economy will never be able to compensate them. They know the American government will not compensate them. So, who is left – the 100s firms that are “trafficking” on their land, the land that they built with their own hands. How dare they? So, the claimants have placed their hopes in a long shot litigation strategy that is their last great hope forgetting what was theirs.
Cuba Business Report: What would you advise them if they consulted with you about their claims?
I would advise them. I would implore them to not go down this path. It’s good money and good energy after bad.
Cuba Business Report: Daniel, I want to thank you for taking the time to answer my questions. This has been a most interesting interview on what is probably on the minds of many people at the present time.
The above interview is not intended as definitive legal advice. You should not rely on its contents for legal advice, it is purely for information purposes only.
