Lawsuits muddle U.S.-Cuba thaw; nation still owes Florida man $3.2B

Lawsuits muddle U.S.-Cuba thaw; nation still owes Florida man $3.2B
Published: November 27, 2015

It has been six months since the United States removed Cuba from its
list of state sponsors of terrorism, but the legacy of that past
designation has lingered on, hurting attempts to fully normalize
relations between the two nations.

But one important roadblock in U.S.-Cuba relations might be coming to an
end.

During its 33 years on the terror list, Cuba did not have sovereign
immunity, which protects foreign governments from civil lawsuits in U.S.
courts. In that time, U.S. courts have approved an estimated $4 billion
in civil judgments against Cuba and owed to U.S. citizens.

Once cleared of any terror ties by the State Department on May 29, a
six-month waiting period remained for any lawsuits that were in the
process of being filed. That statutory period ends Sunday.

Until paid, despite again having sovereign immunity, Cuban assets that
touch U.S. soil can be seized to settle the claims, holding up regular
commerce between the nations.

But Miami attorney Andrew Hall, who represents Gustavo Villoldo, a South
Florida man owed the lion's share of past judgments — $3.2 billion —
told the Tribune via email that "there is a global settlement in sight!"

Hall did not reply to further emails asking for clarification on when
the settlement would be finalized or what it would entail, so it is
unknown if the Cuban government is paying cash, if the over $200 million
in Cuban assets the U.S. government has frozen will be used or if the
Cuban government is paying the total amount owed or negotiated a smaller
payment.

Nor is it known if this global settlement includes the estimated $8
billion in property claims levied against Cuba by those who had their
land, homes and businesses nationalized by the communist government.

Under U.S. law, the Cuban embargo can only be lifted after the two
nations settle the property claims.

Tampa attorney Ralph Fernandez, an ardent opponent of the Castro-run
Cuban government, said he has heard judgments are being settled on a
case-by-case basis rather than as a whole.

The timing of a deal on the civil judgments could play a role in any
agreement between the United States and Cuba that would allow for
commercial airlines to fly between the two countries for the first time
in over five decades. Currently, only U.S. charter flights take
passengers to and from Cuba.

While not confirmed by either government, analysts believe a sticking
point on the negotiations has been Cuba's right to use U.S. airports.
Because Cuban airlines are state-run, any of its planes that land in the
U.S. could be seized to settle the civil judgments.

In 2003, when a Cuban plane was hijacked and flown to Key West, for
instance, Cuba demanded the plane's return, but it was instead
auctioned. The money was used to settle part of a $27 million judgment
won by a Cuban-American woman who said she unwittingly had married a
Cuban spy as part of his cover.

While none of the known civil suits against the Cuban government were
filed by Tampa-area residents, they continue to affect the area.

Tampa International Airport is a popular hub for charter flights to
Cuba. In fiscal year 2015, 71,462 passengers traveled between Tampa and
the island nation, an increase of 10,000 from the year before.
Commercial flights would likely further increase that business.

And St. Petersburg has sent two delegations to Cuba in the past few
months with an art exchange among the initiatives discussed. Much of
Cuba's iconic and historic art is owned and on display in state-run
museums, meaning the Cuban government would be reluctant to allow its
art to be displayed in the United States without guarantees it wouldn't
be seized to pay off civil judgments.

South Florida's Villoldo, who won a multibillion-dollar lawsuit against
the Cuban government, says his father was forced by Ernesto "Che"
Guevera, a leader of the revolution that seized Cuba in 1959, to commit
suicide to prevent the murder of his family. The family's businesses,
including a General Motors dealership, were nationalized.

Villoldo was awarded $2.8 billion, which has grown to $3.2 billion
because of interest.

Others still trying to collect include the families of Bobby Fuller and
Aldo Vera.

Vera was a high-ranking Cuban police official who attempted to organize
an anti-Castro political group in Puerto Rico, where his family contends
he was gunned down in 1976 by Cuban agents. Vera's family was awarded
$49.3 million.

Fuller was executed by Cuba in 1960 for "counterrevolutionary activity"
in a trial his family contends was a sham. His family was awarded $454
million.

These judgments have remained controversial among the legal community,
with some attorneys pointing out that Cuba was not designated a sponsor
of terror when the crimes occurred, so the government was protected by
sovereign immunity at that time.

In each of the lawsuits, the plaintiffs won by default when Cuba chose
not to defend itself in court.

Because of what he calls "empty chair verdicts," Fernandez, the Tampa
attorney and a Castro opponent, believes that any settlement will
ultimately be for a "nominal percentage" of what was awarded.

Regardless of how much of the estimated $4 billion in civil judgments
against Cuba is paid out through a settlement, said Antonio Martinez II,
a New York-based attorney specializing in Latin America relations, he
expects the nation's government to find ways to recoup its losses.

"Every time we have seized or collected upon Cuban assets, Cuba
strategically responds to recover whatever it perceives was lost and
then some," he said.

For example, Martinez said, when the U.S. seized more than $100 million
in long-distance fees in 2002 to pay some of these judgments, Cuba
"jacked up the price of long-distance calls from 40 cents a minute to
more than $1 a minute."

Similarly, when the George W. Bush administration tightened sanctions
against Cuba to make it impossible for the country to use U.S. dollars
in the international banking system in 2003, "Cuba responded with the
annoying and costly 10 percent surcharge still being collected on all
U.S. dollar exchanges in Cuba, paid for mostly by Americans," Martinez said.

Some attorneys speculated that once Cuba was removed from the sponsors
of terror list and had sovereign immunity restored, it would be
protected retroactively against the existing civil lawsuits.

But according to an email to the Tribune from the State Department,
"Plaintiffs holding existing judgments against Cuba could continue to
pursue attachments to satisfy their judgments."

pguzzo@tampatrib.com

Source: Lawsuits muddle U.S.-Cuba thaw; nation still owes Florida man
$3.2B | TBO.com and The Tampa Tribune -
http://www.tbo.com/news/crime/lawsuits-muddle-us-cuba-thaw-nation-still-owes-florida-man-32b-20151127/