Untangling Big Oil’s Claims Against Communist Cuba

In the compensation dispute between Exxon Mobil and Cuba’s communist regime, on which side will President Trump’s Department of Justice land? The Supreme Court on Monday asked the solicitor general to weigh in on the case, which the Nine is deciding whether to hear. Exxon sued Cuba over Fidel Castro et al’s seizure in 1960 of Standard Oil’s assets, for which the company has yet to be repaid. The case looks ripe for review by the high court. Justice, after all, would dictate that the successor firm of Standard Oil be compensated for what the communists seized during La Revolución Cubana. The oil company is but one of many American firms whose private property was confiscated by the Fidelistas. Exxon points out that $1.9 billion in property — as of 1969, in gold-backed dollars — was taken from some 6,000 claimants, per the U.S. Foreign Claims Settlement Commission.When President Johnson signed into law the Cuban Claims Act, he stressed that Castro’s regime had “violated every standard by which the nationals of the free world conduct their affairs.” Claims like Exxon’s were to be logged by the commission, Johnson said in 1964, in the hope that “one day,” there would be a chance “to settle claims of American nationals whose property has been wrongfully taken from them.” Has that day arrived? Exxon argues that it has. Its case rests on a 1996 law, the Cuban Liberty and Democratic Solidarity Act, known as Helms-Burton. The measure allows American nationals who held Cuban property pre-Revolución to seek compensation from anyone who “traffics in property which was confiscated by the Cuban Government on or after January 1, 1959.” The law says its intent is to give the victims “a judicial remedy in the courts of the United States.”The legal action, the law states, is meant to deny the regime and its accomplices “any profits from economically exploiting Castro’s wrongful seizures.” Exxon filed its suit in 2019 against the Cuban state-owned companies that had received the American firm’s stolen assets. The amount sought, some $280 million, is based on, Exxon says, Standard Oil’s original claim of $71,611,002.90, “plus interest at 6% per year, beginning on July 1, 1960.” Why did Exxon wait until just six years ago to file its suit against Cuba? That reflects a wrinkle in Helms-Burton that allows the president to suspend Americans’ ability to file suit under the law against the Havana regime if it is deemed “necessary to the national interests of the United States.” Exxon notes that “every President did just that,” until Mr. Trump “finally allowed the suspensions to lapse on May 2, 2019.” Exxon filed its suit the same day.Cuba, though, argues that it is shielded from the claims by Exxon — and the host of other American individuals and firms it expropriated decades ago — by the Foreign Sovereign Immunities Act. That law generally shields foreign nations from legal liability in American courts. So far lower courts have allowed Exxon’s case to move forward, pointing to an exception in the immunity law relating to commercial activity.Yet the district judge in the case denied Exxon’s contention that Helms-Burton gives Castro’s victims standing in American courts to launch lawsuits. The District of Columbia Circuit agreed, with Chief Judge Sri Srinivasan noting that the Foreign Sovereign Immunities Act’s terms “contemplate that jurisdiction in a civil action against a foreign sovereign could arise only under the FSIA itself, not under some other statute,” like Helms-Burton.That view jibes with Cuba’s argument that Helms-Burton suits are “limited to actions for which there is no immunity under” FSIA. Sovereign immunity, to be sure, is a sensitive issue warranting careful scrutiny. Yet one can imagine Mr. Trump’s justice department looking askance at attempts to delay long-overdue efforts by firms like Exxon to hold Havana to account, when the solicitor general gives the Nine America’s views in this dispute.

Untangling Big Oil’s Claims Against Communist Cuba

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