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Judge denies Carnival's bid to dismiss Cuba lawsuit

havana terminal
Carnival Corp. is being sued under Title III of the Helms-Burton Act for allegedly trafficking in stolen Cuban property — cruise facilities at Santiago and at Havana, pictured here PHOTO: Anne Kalosh
A federal judge in Miami has denied Carnival Corp.'s motion to dismiss a lawsuit that claims the cruise giant trafficked in stolen property by using cruise facilities in Santiago de Cuba.

Carnival in May became the first US-based company sued by Americans whose properties in Cuba were seized after the revolution, under Title III of the Helms-Burton Act.

Ruling could lead to other lawsuits

John Kavulich, president of the New York-based US-Cuba Trade and Economic Council, who has provided the court transcript, said the judge's ruling could lead to other lawsuits and other cruise lines being sued.

Carnival’s attorneys had argued for dismissal on the grounds the company did not ‘traffic’ the property, whose use was incidental to travel legally authorized by the US Office of Foreign Assets Control, and because the plaintiff hadn’t adequately established claim to the property.

Judge James Lawrence King held that the lawful travel exemption in Helms-Burton as an affirmative defense to trafficking must be established by Carnival, not negated by the plaintiff. In other words, 'Helms-Burton frames the travel provision as an exception to otherwise unlawful conduct, not as lawful conduct that must be negated by the plaintiff to stake a claim.'

Claim to Santiago cruise docks

Florida businessman Javier Garcia-Bengochea claims an 82.5% interest in waterfront property in Santiago via inherited ownership of stock in La Maritima, a Cuban company that owned the Santiago docks before they were nationalized.

Carnival argued the plaintiff hadn’t adequately established claim to the property, and said that being an individual shareholder La Maritima would not entitle the assertion of a claim on behalf of the company.

Congress's intent?

The court disagreed, saying that nothing has demonstrated Garcia-Bengochea's claim is untrue. And Judge King was not persuaded that the plaintiff doesn't have a claim to the property because, he said, there's no indication Congress was legislating with corporate formalities in mind. Rather, in Helms-Burton 'claim' is a broadly used term referring to the right to something.

The judge further stated that Carnival's reading of the statute would substantially undermine Congress's goal of deterring trafficking.

'... Under Carnival's interpretation, one can traffic in a Cuban corporation’s confiscated property with impunity as long as the Cuban government not only took the property, but also nationalized the corporate entity itself, leaving only the individual shareholders behind to pursue any rights the corporation might have lost to the Castro regime,' King wrote.

'And because the Act applies to confiscations dating back to January 1959, there is a strong possibility that many of these corporations no longer exist or are otherwise unable to assert claims on their own behalf. In fact, in this case, Carnival argues that La Maritima is not a US national capable of bringing a Helms-Burton claim for the confiscated docks, and according to Carnival, that means no one is. The court finds it implausible that Congress intended such a result.'

Carnival reponds

'We believe that we operated within the approved government process regarding Cuba,' Carnival Corp. spokesman Roger Frizzell told Seatrade Cruise News. 'We look forward to proving the merits of our case.'

Separate Havana Cruise Terminal suit

Carnival is also being sued by Mickael Behn, who claims ownership of the Havana Cruise Terminal.