With First Libertad Act Lawsuit Settlement, How Will Effectiveness And Deterrence Be Measured? Has It Worked? May Never Know… That’s A Problem. Settlements Must Be Disclosed
/With First Libertad Act Lawsuit Settlement, How Will Effectiveness And Deterrence Be Measured? Has It Worked? May Never Know… That’s A Problem. Settlements Must Be Disclosed
Defendant may not want public- can result in issues with shareholders, governments, employees, regulators, and create a benchmark for other defendants.
Plaintiff may not want public- can provide other defendants with a benchmark for settlements- which might be lower than desired.
The Libertad Act may need to be amended with a provision to require public disclosure of awards, judgements, and settlements.
If A Settlement Is Secret, Then Where Is The Deterrent?
Taxpayers Paid For It; Should Benefit From Knowing How It Is Used
All Settlements Using Title III Of The Libertad Act Should Be Public
Courts Are Public Entities- Any Decision/Settlement Should Be Public
The United States Department Of State Should Publish All Title IV Decisions
Some May Never See The Accountability They Seek
A Twenty-Five-Year-Old Volcano Erupted- Everyone Needs To See The Lava
In 1996, the United States enacted a law with a provision specifically designed to deter the use of expropriated assets in the Republic of Cuba: The Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).
Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.
Title III languished suspended (in six-month intervals) for twenty-three (23) years through three presidencies and half of a fourth presidency: Clinton-Gore Administration (1993-2001), Bush-Cheney Administration (2001-2009), Obama-Biden Administration (2009-2017), and Trump-Pence Administration (2017-2021) until 2 May 2019. The Biden-Harris Administration (2021- ) has not suspended Title III of the Libertad Act.
Title III was a dormant volcano. When it spewed, however, rather than molten rock was a moderate flow of complaints, summonses, summonses, motions and appeals. An estimated US$19 million in billable hours from attorneys and their supporting entities.
A primary goal of Title III was to publicly shame (through the courts) “traffickers” to cease activity in the Republic of Cuba- and do so in a high-wattage manner whereby others would be deterred from the same activity.
Weeks after the two-year anniversary of the implementation of Title III, there has been announced a first settlement in a Libertad Act Title III lawsuit; this one filed on 11 September 2020.
WILLIAM H. CLAFLIN ET AL V. LAFARGEHOLCIM LTD; INVERSIONES IBERSUIZAS S.A.; HOLCIM TRADING SA (F/K/A) UNION MARITIMA INTERNACIONAL SA; DE RUITER OUDERLANDE B.V.; LAS PAILAS DE CEMENTO S.A.U.; and UNKNOWN SUBSIDIARY OF THE LAFARGEHOLCIM GROUP [1:20-cv-23787; Southern Florida District].
Berliner Corcoran & Rowe LLP (plaintiff)
Roig Lawyers (plaintiff)
Fields PLLC (plaintiff)
Tutan, Rosenberg, Martin & Bellido (defendant)
Wilkie, Farr & Gallagher (defendant)
Plaintiff has 22nd largest certified combined claim (US$$11,686,342.59) consisting of the 37th Largest Claim CU-1393 (US$7,508,689.96) for Helen A Claflin; 181st Largest Claim CU-1394 (US$623,674.31) for William H Claflin III; 72nd Largest Claim CU-1395 (US$2,927,190.31) for Mary G. Rentschler; and 182nd Largest Claim CU-1396 (US$623,674.31) for Anne C. Allen; 3953rd Largest Claim CU-1397 (US$3,113.70) for John W. Weeks. Defendant is St. Gallen, Switzerland-based LafargeHolcim Ltd. (2020 revenue approximately US$27 billion).
If all the court decisions, court judgements, settlements and out-of-court agreements are not fully disclosed in a timely manner, how will any taxpayer-funded deterrent be measurable?
Given the immense domestic and international implications for decisions arising from the lawsuits, essential that all decisions be in the public domain.
This exposure is especially significant with respect to any “private settlements” among plaintiffs and defendants. The Libertad Act authorizes private settlements- a trafficker and owner of the expropriated asset can agree on compensation, but there is nothing in the Libertad Act compelling disclosure of any compensation.
From a United States-based law firm: “It’s a very odd and recent idea that settlements should be allowed to be secret. Without a court case, sure, people can settle their affairs with each other privately on any terms they like. But once someone invokes a law that claims a public policy purpose, like the Libertad Act, then the citizens of this country ought to know exactly how that law is working in practice. Is it achieving its policy goals, or is just a means for Cuban Americans to extort tolls from businesses trading with and investing in Cuba? Think for example about American Airlines being sued for transporting passengers to and from Cuba under various federal licenses and route allocations. Clearly the United States government not only approved but encouraged the company to provide that service. So, should that case be settled, doesn’t the public have a right to know what a litigant got from deploying a federal law against that United States company? Another thing, the filing fee in a federal case doesn’t even cover the wages of the janitor who cleans the courtrooms. Taxpayers foot the bill for judges’ salaries and pensions, and law clerks and administrative staffs’ wages, the costs of bailiffs, the cost of court houses and their maintenance, and on and on. Why should someone be free to use that infrastructure to procure money from another private party without taxpayers knowing how much they actually received by using a public law and its enforcement mechanism, the federal court system?”
From the Chicago, Illinois-based American Bar Association (ABA) on United States Federal Courts Funding:
Title IV
Title IV of the Libertad Act restricts entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims. One Canada-based company is currently known as subject to this provision based upon a certified claim. One Spain-based company is known as subject to this provision based upon a non-certified claim.
The United States Department of State has refused to provide any information relating to the use of Title IV- not the number of letters sent, not the identity of the recipients, not whether any recipient has ceased “trafficking” as a result of receiving a letter. There is no statute prohibiting the release of data (number of letters sent, years when letters sent) relating to Title IV.
There is value to current plaintiffs and defendants and to potential plaintiffs and defendants from having data from which they weigh the value of their lawsuit, the value of filing a lawsuit, and the value of seeking a Title IV letter.
Title III Libertad Act Lawsuit Filing Statistics
The Trump Administration on 2 May 2019 made operational Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).
Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.
The Trump Administration on 2 May 2019 made operational Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).
Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.
40 Lawsuits Filed (15 certified claimants & 25 non-certified claimants)
1 Settlement (certified claimants)
4 Of Dismissed Lawsuits At Court Of Appeals
US$258,400.00+ Court Filing Fees (not including attorney court appearance fees)
83+ Law Firms
235+ Attorneys
14,400+ Filed Court Documents
US$19+ Million Law Firm Billable Hours (estimated 85% by defendants)
15 Countries Impacted
119 Plaintiffs (some in multiple cases)
4 Class Action Requests
80 Defendants (including corporate parent, subsidiaries; some sued in multiple lawsuits)
26 United States Defendants (not including subsidiaries)
15 Republic of Cuba Initial Defendants (eleven remaining)
30 Non-United States Defendants
9 European Union-Based Defendants
5 Companies Notified As Potential Defendants
Lawsuits Filed In United States District Courts in Southern Florida (26), Middle District Florida (1), Washington DC (2), Western Washington State (1), Nevada (1), Southern District New York (2), Eastern District Louisiana (1), Northern Texas (1), New Jersey (1), Southern Texas (2), and Delaware (2). Some of the lawsuits have been transferred, some cases have been consolidated, and some cases have been dismissed. For filing an action brought under Title III of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, P.L. 104-114, 110 Stat. § 785 (1996) the fee is US$6,800.00.
83 Law Firms Retained By Plaintiffs/Defendants: Ainsworth & Clancy; Allen & Overy;; Akerman; Andrews & Springer; Arent Fox; Aronovitz Law; Astigarraga Davis Mullins & Grossman; Baker & McKenzie; Ballard Spahr; Barakat Law; Berenthal & Associates; Berliner Cooch & Taylor; Berliner Corcoran & Rowe; Corcoran & Rowe; Bird & Bird; Boies Schiller Flexner; Bracewell; Broad & Cassel; Carlton Fields; Carlton Fields Jorden Burt; Coffey Burlington; Cleary Gottlieb Steen & Hamilton; Colson Hicks Eidson; Cooch and Taylor; Creed & Gowdy; Cross Castle; Cueto Law Group; Duane Morris, Dubbin & Kravetz; Ewusiak Law; Fields PLLC; Gibson, Dunn & Crutcher; Hirzel Dreyfuss and Dempsey; Hogan Lovells; Holland & Knight; Horr, Novak & Skipp, P.A.; IPS Legal Group; Jones Day; Jones Walker; Kantrowitz, Goldhamer, & Graifman; Kelly Hart & Hallman; Kozyak Tropin & Throckmorton; Law Office of Alexander Villarreal; Law Office of Andre G. Raikhelson; Law Offices of John S. Gaebe; Law Offices of Paul Sack; Law Offices of Robert L. Muse; Mandel & Mandel; Manuel Vazquez PA; McGuire Woods; MoloLamken; Margol & Margol; Mayer Brown; Morgan, Lewis & Bockius; Morris James; Morris Nichols Arsht & Tunnell; Murphy & Anderson; Nelson Mullins; Pacifica Law Group; Pillsbury Winthrop Shaw Pittman; Potter Anderson & Corroon; Pusateri, Johnston, Guillot & Greenbaum; Rabinowitz, Boudin, Standard, Krinsky & Lieberman; Rasco Klock Perez & Nieto; Reed Smith; Reid Collins & Tsai; Rice Reuther Sullivan & Carroll; Rivero Mestre; Rodriguez Tramont & Nunez; Roig, Tutan, Rosenberg, Martin & Bellido; Roig & Villarreal; Rosenthal, Monhait & Goddess; Scott Douglass & McConnico; Sidley Austin; Stearns Weaver Miller Weissler Alhadeff & Sitterson; Steptoe & Johnson; Trenam, Kemker, Scharf, Barkin, Frye, O’Neill & Mullins; Venable; Walden Macht & Haran; Wicker Smith O’Hara McCoy & Ford; Young, Conaway, Stargatt & Taylor; Wilkie, Farr & Gallagher; Wilmer Cutler Pickering Hale and Dorr; Zumpano Patricios.
Countries Impacted: Canada, Chile, China, Denmark, France, Germany, Netherlands, Panama, Republic of Cuba, Singapore, Spain, Switzerland, Thailand, United Kingdom, United States.
Certified Claimant Participation: Of the 5,913 claimants certified by the United States Foreign Claims Settlement Commission (USFCSC), these (original claim value in parenthesis) have filed Libertad Act lawsuits: 2nd largest certified claimant North American Sugar (US$97,373,414.72); 8th largest certified claimant Exxon Mobil Corporation (US$71,611,002.90 and US$173,157.12); 9th largest certified claimant The Francisco Sugar Company (US$53,389,438.37); 31st largest certified claimant Havana Docks Corporation (US$9,179,700.08); 37th largest certified claimant Helen Claflin (US$7,508,689.96); 67th largest certified claimant King Ranch (US$3,216,084.97); 72nd largest certified claimant Mary Rentschler (US$2,929,577.88); 88th largest certified claimant Julies Shepard (US$2,033,959.17); 181st largest certified claimant William Claflin (US$623,674.31); 182nd largest certified claimant Anne Allen (US$623,674.00); 195th largest certified claimant Javier Garcia-Bengochea (US$547,365.24); 3,953rd largest certified claimant John Weeks (US$3,114.00).
In the third quarter of 2019, the then twenty-eight, now twenty-seven member Brussels, Belgium-based European Union (EU) confirmed its intention to issue a Request For Proposal (RFP) to law firms in the United States. The law firm(s) would be retained to file “amicus curiae” (friend-of-the-court) motions and other motions on behalf of each Libertad Act Title III lawsuit defendant who is domiciled in the EU. The RFP has yet to materialize.
Since 2 May 2019, some filings have been appealed, consolidated, dismissed, refiled, reversed, and transferred within districts and from district to district. Some defendants have been dismissed, but the case continues with other defendants.
Libertad Act
The Trump Administration has made operational Title III and further implemented Title IV of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).
Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.
Title IV restricts entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims. One Canada-based company and one Spain-based company are currently known to be subject to this provision based upon a certified claim and non-certified claim.
Suspension History
Title III was suspended every six months since the Libertad Act was enacted in 1996- by President William J. Clinton (1993-2001), President George W. Bush (2001-2009), President Barack H. Obama (2009-2017) and through the first two years of President Donald J. Trump (2017-2021).
· On 16 January 2019, The Honorable Mike Pompeo, United States Secretary of State, reported a suspension for forty-five (45) days.
· On 4 March 2019, Secretary Pompeo reported a suspension for thirty (30) days.
· On 3 April 2019, Secretary Pompeo reported a further suspension for fourteen (14) days through 1 May 2019.
· On 17 April 2019, the Trump Administration reported that it would no longer suspend Title III.
· On 2 May 2019, certified claimants and non-certified claimants were permitted to file lawsuits in United States courts.
Certified Claims Background
There are 8,821 claims of which 5,913 awards valued at US$1,902,202,284.95 were certified by the United States Foreign Claims Settlement Commission (USFCSC) and have not been resolved for nearing sixty years (some assets were officially confiscated in the 1960’s, some in the 1970’s and some in the 1990’s). The USFCSC permitted simple interest (not compound interest) of 6% per annum (approximately US$114,132,137.10); with the approximate current value of the 5,913 certified claims is approximately US$8,750,130,510.77.
The first asset (along with 382 enterprises the same day) to be expropriated by the Republic of Cuba was an oil refinery on 6 August 1960 owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73).
From the certified claim filed by Texaco: “The Cuban corporation was intervened on June 29, 1960, pursuant to Resolution 188 of June 28, 1960, under Law 635 of 1959. Resolution 188 was promulgated by the Government of Cuba when the Cuban corporation assertedly refused to refine certain crude oil as assertedly provided under a 1938 law pertaining to combustible materials. Subsequently, this Cuban firm was listed as nationalized in Resolution 19 of August 6, 1960, pursuant to Cuban Law 851. The Commission finds, however, that the Cuban corporation was effectively intervened within the meaning of Title V of the Act by the Government of Cuba on June 29, 1960.”
The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc. The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International; the certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba. The third-largest certified claim valued at US$97,373,414.72 is controlled by New York, New York-based North American Sugar Industries, Inc. The smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust.
The two (2) largest certified claims total US$449,377,207.76, representing 24% of the total value of the certified claims. Thirty (30) certified claimants hold 56% of the total value of the certified claims. This concentration of value creates an efficient pathway towards a settlement.
Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 requires that an asset had a value of US$50,000.00 when expropriated by the Republic of Cuba without compensation to the original owner. Of the 5,913 certified claims, 913, or 15%, are valued at US$50,000.00 or more. Adjusted for inflation, US$50,000.00 (3.70% per annum) in 1960 has a 2021 value of approximately US$162,850.00. The USFCSC authorized 6% per annum, meaning the 2021 value of US$50,000.00 is approximately US$233,000.00.
The ITT Corporation Agreement
In July 1997, then-New York City, New York-based ITT Corporation and then-Amsterdam, the Netherlands-based STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement could be renewed and was renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a certified claim valued at approximately US$130.8 million. ETECSA, which is now wholly-owned by the government of the Republic of Cuba, was a joint venture controlled by the Ministry of Information and Communications of the Republic of Cuba within which Amsterdam, the Netherlands-based Telecom Italia International N.V. (formerly Stet International Netherlands N.V.), a subsidiary of Rome, Italy-based Telecom Italia S.p.A. was a shareholder. Telecom Italia S.p.A., was at one time a subsidiary of Ivrea, Italy-based Olivetti S.p.A. The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International.
