Exxon Mobil Libertad Act Lawsuit Against Cuba- Judge- Exxon Has Standing, "Exxon's injury is concrete"; Cuba Wins Too; Court References "mantle of triviality" and "baffling"

EXXON MOBIL CORPORATION V. CORPORACION CIMEX, S.A. (Cuba), CORPRACION CIMEX, S.A. (Panama), AND UNION CUBA-PETROLEO [1:19-cv-01277; Washington DC]

Steptoe & Johnson (plaintiff)
Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C. (defendant)

LINK To 46-Page Memorandum and Order (4/20/21)

Excerpts:

Defendants now move to dismiss Exxon’s complaint, arguing that this court lacks subject matter jurisdiction over the dispute. For the reasons that follow, the court denies Defendants’ motion to dismiss as to CIMEX, defers ruling as to CUPET and CIMEX (Panama), and allows limited jurisdictional discovery as to CUPET and CIMEX (Panama).

Defendants have moved to dismiss the Second Amended Complaint for lack of subject matter and personal jurisdiction. See Defs.’ Mot. to Dismiss Action with Prejudice, & for Other Relief, ECF No. 42 [hereinafter Defs.’ Mot.]. As to subject matter jurisdiction, Defendants assert that: (1) they are agencies or instrumentalities of a foreign sovereign, Cuba, and thus are immune from suit pursuant to the Foreign Sovereign Immunities Act (“FSIA”), and (2) Exxon lacks Article III standing.

The parties agree that Cuba wholly owns Defendants CIMEX, CIMEX (Panama), and CUPET, and therefore Defendants are presumptively immune from suit in U.S. courts as agencies or instrumentalities of a foreign state.

In addition, Congress was careful to anticipate and explicitly provide instructions for instances in which Title III was in tension with existing doctrines, suggesting that Congress would have explicitly stated the FSIA did not apply to Title III if that were its intention.

Having determined that Title III does not supply the waiver of sovereign immunity needed to advance Exxon’s case, the court turns to the FSIA’s immunity exceptions. Two are relevant here: the commercial activity exception and the expropriation exception.

mantle of triviality

It is not entirely clear what Defendants contend Exxon’s action is based upon, but the court has little doubt that CIMEX’s use of confiscated property to participate in the remittance business is an “act . . . in connection with a commercial activity,” as required by section 1605(a)(2).

In sum, with respect to the requirement of direct effects in the United States, the court concludes: (1) CIMEX’s processing of remittances and its purchase and sale of goods imported from the United States have a direct effect in the United States; (2) Defendants’ use of Exxon’s confiscated property and CUPET’s competition in the global oil market, alleged pollution, and participation in a handful of meetings in the United States have not caused a direct effect in the United States; and (3) no acts of CIMEX (Panama), directly or as an alter ego of CIMEX, have been shown to have a direct effect in the United States.

FSIA’s Expropriation Exception

Exxon resists this conclusion by arguing that this court “must presumptively accept Plaintiff’s certified claim [from the FCSC] as conclusive proof of Plaintiff’s ownership interest in the property at issue.” Pl.’s Br. at 40–41. But that argument suffers from two problems. First, the FCSC’s certification of a claim at most creates a property right under domestic law, not international law. And second, the FCSC certifies claims for ownership interests that are broader than the property rights recognized under customary international law. The FCSC has jurisdiction to adjudicate “any rights or interests . . . owned wholly or partially, directly or indirectly . . . by nationals of the United States.” 22 U.S.C § 1643b(a) (emphasis added). By contrast, the expropriation exception requires the plaintiff to identify “rights in property” that have been “taken in violation of international law,” 2

Exxon resists this conclusion by arguing that this court “must presumptively accept Plaintiff’s certified claim [from the FCSC] as conclusive proof of Plaintiff’s ownership interest in the property at issue.” Pl.’s Br. at 40–41. But that argument suffers from two problems. First, the FCSC’s certification of a claim at most creates a property right under domestic law, not international law. And second, the FCSC certifies claims for ownership interests that are broader than the property rights recognized under customary international law. The FCSC has jurisdiction to adjudicate “any rights or interests . . . owned wholly or partially, directly or indirectly . . . by nationals of the United States.” 22 U.S.C § 1643b(a) (emphasis added). By contrast, the expropriation exception requires the plaintiff to identify “rights in property” that have been “taken in violation of international law,” 2

6 Exxon’s contention that Garcia-Bengochea v. Carnival Corp., 407 F. Supp. 3d 1281 (S.D. Fla. 2019), supports the proposition that “indirect ownership is permissible” under the expropriation exception is frankly baffling.

To recap, the court has found that the commercial activity exception reaches Exxon’s Title III claim against CIMEX, but not against CUPET or CIMEX (Panama). The court also has concluded that the expropriation exception cannot sustain a claim against any Defendant.

Though the court thinks it is a close call, it will permit limited jurisdictional discovery into the topics identified by Exxon concerning CUPET’s and CIMEX (Panama)’s trafficking activities that may have caused direct effects in the United States. Such discovery is limited to the three topics the court has identified.

Here, there can be no question that Congress legislated an injury in fact in Title III.

And Exxon’s injury is concrete.

Exxon possesses a claim from the FCSC certifying that it “suffered a loss in the total amount of $71,611,002.90.” FCSC Claim at 9. Quite plainly, a loss totaling almost $72 million constitutes a real and not abstract injury, and Exxon has sufficiently satisfied the concreteness element of standing.

Finally, although Defendants do not challenge the redressability of Exxon’s injury, it is clear that, if Defendants are found liable in this action, Title III provides for Exxon to receive “the amount, if any, certified to [it] by the Foreign Claims Settlement Commission under the International Claims Settlement Act of 1949, plus interest.” 22 U.S.C. § 6082(a)(1)(A)(i)(I). A favorable decision would therefore redress Exxon’s injury. See Lujan, 504 U.S. at 561.

The court concludes that Exxon has Article III standing to bring a claim under Title III of the LIBERTAD Act.

For the foregoing reasons, the court grants in part and defers in part Defendants’ Motion to Dismiss. The court denies Defendants’ Motion to Dismiss as to CIMEX and orders limited jurisdictional discovery as to CUPET and CIMEX (Panama). The parties shall meet and confer and propose to the court by May 4, 2021, a schedule for discovery that is consistent with the limited scope of discovery described in this Memorandum Opinion and Order.