President Biden Suspending Title III of the Libertad Act? Might Clarence Thomas Supreme Court Nomination Hearing Provide Clues

Might President Joseph Biden suspend Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”)?

The Trump Administration on 2 May 2019 made operational Title III of the 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.

Thus far, twenty-nine lawsuits have been filed- eleven certified claimants (there are 5,913 certified claimants) and eighteen non-certified claimants (estimates as high as 200,000). Four of the lawsuits are at Courts of Appeals. There are nearing two hundred attorneys from sixty-seven law firms representing more than one hundred plaintiffs and defendants; and nearing sixty defendants are located in twenty-eight countries. LINK To Libertad Act Lawsuit Statistics

The U.S.-Cuba Trade and Economic Council interacts with a larger number of attorneys on Republic of Cuba-related matters than does any organization in the United States. There does not exist a consensus from Libertad Act lawsuit attorneys representing plaintiffs and defendants who believe that Title III would again be suspended by a Biden Administration.

The most consistent reasoning by the attorneys includes 1) nothing to gain from suspending as the European Union (EU), where most of the non-United States defendants are located, has not taken any meaningful measures as of yet, so a Biden Administration would not have a quid pro quo opportunity 2) no compelling reason not to await the final dispositions of the twenty-nine lawsuits filed 3) as long as Title III is active, it is a bargaining tool for a Biden Administration, so why loose it prematurely and 4) there is no meaningful domestic political pressure to re-suspend it.

Is Joseph Biden hostile to property rights? Could be. However, not outlandish to believe him saying: “Come on man, Castro stole those folks’ property. Here’s the deal: Not on my watch. Not OK with a guy like me who got up as a kid every morning and hustled to help my family keep a roof over their heads. Not OK to take the house or business of a hard-working family.”

Biden on Property Rights
By Michael M. Berger
Senior Counsel- Appellate
Manatt LLP
August 25, 2020

Manatt appellate senior counsel Michael Berger authored an article for Daily Journal about Democratic presidential nominee Joe Biden’s historical stance on property rights. In particular, Berger analyzed Biden’s questioning during a hearing to determine whether presidential nominee Clarence Thomas should be confirmed to the U.S. Supreme Court, which concerned the protection afforded property owners by the 5th Amendment's guarantee that private property will not be taken for public use without the payment of just compensation and the 14th Amendment's guarantee that no state can deprive anyone of life, liberty or property without due process of law. Berger also noted the importance of this line of questioning, saying, “the ascent of Joe Biden to the top spot on a presidential ticket has caused many people to review the half-century of Biden's public life for possible clues as to future actions.” LINK TO COMPLETE ARTICLE

Joe Biden and Limited Government
By David Boaz
Cato Institute
24 August 2008

Barack Obama and Joe Biden both get a perfect 100 from the big-government liberal Americans for Democratic Action, which probably tells you all you need to know. But I remember a dramatic moment back in 1991 when Biden made his commitment to unlimited government clear and dramatic. Clarence Thomas had been nominated for the Supreme Court, and Biden, then chairman of the Senate Judiciary Committee, was questioning him. Biden bore in on the possibility that Thomas might believe in "natural law," the idea, as Tony Mauro of USA Today summarized it, that "everyone is born with God-given rights - referred to in the Declaration of Independence as 'inalienable rights' to 'life, liberty and the pursuit of happiness' - apart from what any law or the Constitution grants." Biden singled out Cato adjunct scholar Richard Epstein and Cato author Stephen Macedo and demanded to know if Thomas agreed with them that the Constitution protects property rights. Waving Epstein's book Takings in the air like Joe McCarthy with a list of communists, Biden demanded to know, as we very loosely paraphrased it in Cato's 25-year Annual Report (pdf; page 14), "Are you now or have you ever been a libertarian?" As most judicial nominees do when pursued by a senator roused to defend his power like a mama bear, Thomas assured Senator Biden that he wouldn't take the Constitution too seriously.

Was Biden right to worry? Well, as we said in the Annual Report, four years later Thomas joined the Court in declaring, "We start with first principles. The Constitution creates a Federal Government of limited powers." But ten years later the Court finally considered whether the Constitution protects property rights and said, "Ehh, not so much." Thomas protested, "Something has gone seriously awry with this Court’s interpretation of the Constitution. Though citizens are safe from the government in their homes, the homes themselves are not." Biden was right to worry that Thomas's understanding of individual rights and the Constitution just might put some limits on the power of government.

Title III Suspension History 

Title III has been suspended every six months since the Libertad Act was enacted in 1996- by President William J. Clinton, President George W. Bush, President Barack H. Obama and President Donald J. Trump.  

• 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 US$8.7 billion.  

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 2019 value of approximately US$427,267.01.  The USFCSC authorized 6% per annum, meaning the 2019 value of US$50,000.00 is approximately US$1,649,384.54.  

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.