In Exxon Mobil Corp. v. Corporacion Cimex, S.A. (Cuba), the Supreme Court held that the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act, waives sovereign immunity for claims against Cuban agencies and state-owned companies. As a result, plaintiffs suing those entities under the Act do not need to satisfy one of the Foreign Sovereign Immunity Act's enumerated exceptions to immunity. Writing for a six-justice majority, Justice Kavanaugh explained that Congress abrogated the sovereign immunity of Cuban government entities when it passed the Helms-Burton Act in 1996, even though the Act does not contain an express sovereign-immunity waiver.
When Fidel Castro assumed power in Cuba, the Cuban government seized many foreign-owned assets, including those of American companies such as Exxon Mobil. For decades after, however, American companies had no practical way to recover compensation from the Cuban government for their confiscated property. The 1976 Foreign Sovereign Immunities Act (FSIA) specified certain exceptions to the general rule of foreign sovereign immunity. But the relevant exceptions required connection between the foreign government's activity and activity or effects in the United States, which proved a stumbling block for those seeking compensation for property confiscated and used in Cuba. After Cuba shot down two private planes in 1996, killing three American citizens, Congress provided a new avenue for relief through the Helms-Burton Act's private right of action. The Act also gave the president the ability to suspend the right of action, which presidents exercised continuously from the Act's passage in 1996 until 2019, when the first Trump administration ended the suspension and allowed suits under the Helms-Burton Act to proceed.
That same day, Exxon Mobil sued Cuban government-owned companies for over $1 billion in damages, alleging that they used and profited from Exxon's confiscated oil refinery and related assets seized by the Castro regime in 1960. The Cuban government defendants asserted a sovereign immunity defense, arguing that Exxon's claims must fall within one of the FSIA exceptions. Exxon argued that the Helms-Burton Act itself waived sovereign immunity and thus the claims need not fall into a FSIA exception. The district court and the D.C. Circuit both sided with the Cuban government, holding that Exxon needed to show its claims fell within an FSIA exception to proceed in court. The Supreme Court granted certiorari to determine whether the Helms-Burton Act abrogates foreign sovereign immunity for suits against Cuban agencies and instrumentalities, or whether plaintiffs proceeding under the Act must still satisfy an FSIA exception.
The Supreme Court held that the Helms-Burton Act waives sovereign immunity of Cuban government entities, and thus Exxon was not required to satisfy a separate FSIA exception to proceed. The Court found that the Helms-Burton Act's creation of a specific cause of action that expressly reaches "any agency or instrumentality of a foreign state" was a strong textual indication. And the Helms-Burton Act's cause of action would be essentially meaningless if FSIA applied, because such claims would often fail to meet the FSIA's requirements, given the Helms-Burton Act's simultaneous embargo against Cuba, which bars most commercial activity between the United States and Cuba. The Court also noted suits under Helms-Burton fell under the general federal question jurisdiction statute rather than FSIA's jurisdictional statute, showing that "actions under the Helms-Burton Act are not actions under the FSIA." Finally, the Court reasoned that the Act's presidential suspension authority gives the president a gatekeeping role that would be undermined if courts imposed an additional FSIA threshold after the president allowed suits to proceed. Accordingly, the Court held that Helms-Burton displaces the FSIA's default rule for sovereign immunity with respect to suits against Cuban government entities under the Act.
Justice Kagan, joined by Justices Sotomayor and Jackson, dissented. In her view, Congress's intent to abrogate sovereign immunity is not "unmistakably clear" within the text of the Helms-Burton Act, and thus a waiver is available only through a FSIA exception. Justice Kagan also notes the Helms-Burton Act still has utility without the sovereign immunity waiver because its cause of action allows suits against private parties. Accordingly, plaintiffs should still be required to satisfy a FSIA exception for their claims to move forward.
The Court's decision in Exxon Mobil removes a significant obstacle for U.S. nationals bringing Helms-Burton Act claims against Cuban agencies and instrumentalities that traffic in confiscated property. While this may allow plaintiffs to obtain judgments against Cuban government-owned defendants, plaintiffs may still face roadblocks when attempting to recover on those judgments, including because immunity from execution of judgments is separate from immunity from suit. The Court did not address the execution-immunity question but noted that there is still value in obtaining a judgment, even if a plaintiff cannot immediately collect on it. Additionally, "[t]his case does not present, and this opinion therefore does not address, the question whether the Helms-Burton Act abrogates the foreign sovereign immunity of other countries' agencies or instrumentalities."
Venable, which has extensive experience with Helms-Burton Act matters, continues to monitor legal developments from the Supreme Court and around the country that affect our clients and stakeholders.
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The authors thank Mariella T. Creaghan, a summer associate in our Washington, DC, office, for her assistance in writing this article.