Cruise Lines Ordered to Pay $440M in Damages for Use of Havana Pier

A U.S. federal judge on December 30 awarded nearly $440 million in damages plus additional sums for costs to the plaintiffs in a Libertad case over the cruise industry’s use of port facilities in Havana during the three years cruises were permitted to Cuba. While the cruise lines are planning to appeal the decision, the case is being seen as a watershed in the long-running fight for compensation for assets seized during the 1959 Cuban revolution and other events around the globe.

U.S. District Court Judge Beth Bloom issued final judgments against Carnival Corporation, Royal Caribbean Group, Norwegian Cruise Line Holdings, and MSC Cruises. Each of the cruise lines is being ordered to pay more than $109 million in damages. The figure was arrived at supporting the nearly $9.2 million claim certified by the Foreign Claims Settlement Commission for the Havana Docks Corporation which held the rights to the docks since the 1930s. The judgment also consists of interest which was trebled as punitive damages. The judgments also included varying amounts between $2 million and $3.5 million in attorney’s fees as well as $200,000 or more in additional costs in the individual judgments.

The case stems from a 1996 act passed by the U.S. Congress that gave the heirs to assets wrongfully seized and not compensated for their property the right to sue companies that profited from the use of the property. Before Donald Trump, every U.S. president had suspended the right to sue for damages but Trump cleared the way for the heirs to the Havana Docks Corporation to sue as well as other similar lawsuits. The U.S.-Cuba Trade and Economic Council reports to date 44 Libertad cases have been filed including other suits against leading commercial shipping companies and others doing business in Cuba.

The cruise lines argued that the case should have been dismissed because they were trading under an exemption issued by the United States as part of President Barrack Obama’s effort to effect change in Cuba by rebuilding relations. After more than 40 years, the first cruises commenced in May 2016 and continued until Trump revoked the Obama-era permits in 2019. 

The court had previously found that the cruise lines had gone beyond their education permits offering a broad range of traditional tourist activities while passengers were ashore in Cuba. The court cited visits to the beaches and nightclubs as well as a broad range of shore excursions offered by the cruise lines. Court papers report that the cruise lines earned more than $1.1 billion from their cruises and paid $138 million to entities associated with the Cuban government. Judge Bloom said the cruise lines had engaged in “trafficking acts,” for which they could be liable for damages under the 1996 Helms-Burton Act known as the Libertad Act.

A spokesperson for Carnival Corporation told the Miami Herald that the company, which was the first to send a cruise ship to Cuba in 2016, engaged in lawful travel explicitly licensed, authorized, and encouraged by the U.S. government at the time. Saying they strongly disagree with both the ruling and now the judgment, the spokesperson for Carnival told the Miami Herald that they plan to appeal the decisions.

Finding that the companies had profited from trafficking the assets, the judge in March wrote in her opinion that the treasury department licenses did not automatically immune the cruise lines from liability. At issue was the question of what activities were education as required by the permits and if the cruise lines violated that by conducting tourism.

The U.S.-Cuba Trade and Economic Council points out it took 43 months for this first judgment to be ordered on the lawsuits but that it could pave the way for other successful claims. Experts had questioned if any of the suits could ever meet the legal standards to gain a judgment. The Foreign Claims Settlement Commission previously certified over 5,900 claims valued at over $1.9 billion. 

Of the forty-four Libertad Act Title III lawsuits filed since May 2019, The U.S.-Cuba Trade and Economic Council reports one has been settled for an undisclosed amount, while one has reached a court verdict/judgment, some have been dismissed, some have been appealed to respective Courts of Appeals, and two have sought, but not received review by the United States Supreme Court. Commercial shipping companies including Maersk, MSC, Crowley Maritime, and Seaboard Marine, have been named in cases as well as large U.S. corporations including Texaco and Marriott.