Title III of the Helms-Burton Act creates a private cause of action for U.S. nationals whose property was confiscated by the Castro regime before March 12, 1996. However, the Act grants U.S. presidents the authority to suspend these lawsuits if it’s necessary to the national interest and will expedite a transition to democracy in Cuba. And that’s exactly what they all did until 2019, when for the first time these cases were permitted proceed.
Attorneys John Bellinger and Sean Mirski have reported extensively on these cases on the Lawfare blog. In an advisory published on the Cuba Standard site, they report that plaintiffs “have filed roughly 40 suits under Title III in the two years it has been operative, including 15 new suits against a mix of U.S., European and Cuban companies operating in industries such as mining, sugar, tobacco, advertising, banking, construction, and ranching.”
Here’s the problem, most of the property at issue in these cases was confiscated in the early 1960s, over half a century ago. In 1996, when the Act was passed, the affected property owners (read: claimants) were old, but most were still alive. By now, 25 years later, most of those claimants have long since passed away.
Is a Helms-Burton Act claim a “personal right” that dies with you or a “property right” your heirs can inherit (and prosecute after your death)?
Because many of the original claimants are now dead, early on in these cases the issue came up as to whether their private cause of action under the Helms-Burton Act is a property right their heirs can inherit (and prosecute after their deaths) or a personal right that dies with them? (By way of example, this distinction used to be a big deal in the publicity rights context, though that’s changing). The controlling statue is 22 U.S.C. § 6082(a)(4):
(B) In the case of property confiscated before March 12, 1996, a United States national may not bring an action under this section on a claim to the confiscated property unless such national acquires ownership of the claim before March 12, 1996.
Here, the Plaintiff’s father allegedly inherited the property from the Plaintiff’s grandfather in 1988, and then Plaintiff’s mother inherited the property from his father in November 2016. (ECF No. 29 at ¶ 16.) Sometime after the Plaintiff’s mother inherited the land in November 2016, she “chose to pass her ownership claim” to the Plaintiff. (Id.) The plain language of the statute indicates that these allegations are insufficient. The statute states that a United States national may not bring an action “unless such national” acquires an interest to the property before 1996. 22 U.S.C. § 6082(a)(4)(B) (emphasis added). “[S]uch national” plainly refers to the “United States national” who may or may not bring an action under the Helms-Burton Act. See Havana Docks Corporation v. MSC Cruises SA Co., — F. Supp. 3d –, 2020 WL 59637, at *3 (S.D. Fla. Jan. 6, 2020) (Bloom, J.) (reasoning that ignoring the qualifying word “such” in interpreting a separate provision of the Act “would run afoul basic canons of statutory interpretation.”). Moreover, this interpretation of the subsection is consistent with its intent, which is to prevent individuals from transferring their ownership interest in confiscated property to a United States citizen after the Act’s enactment in 1996. Conference Report at H1660, 1996 WL 90487. Congress did not intend for those who acquired an interest in confiscated property after 1996 to bring Helms-Burton Act claims if their property was confiscated before March 12, 1996. Therefore, Gonzalez has failed to state a claim upon which relief may be granted.
If it’s a personal right, do dead people own this right?
Based on the statutory construction reflected in the Gonzalez case (and others like it), defendants have successfully fended off Helms-Burton Act claims filed by the heirs of the original March 12, 1996 claimants.
OK, so if you inherit a claim under the Act after 1996 you’re not the same owner that existed in 1996 (new owner = no claim), but what if the probate estate of the original owner is trying to prosecute one of these claims, has ownership transferred to the estate or is the same owner (now deceased) still acting (via his estate’s personal representative) upon the original personal right granted under the Act (same owner = viable claim)?
Lurking under the surface of this bit of statutory construction is a fundamental, almost philosophical question: do dead people own property? There’s a lot more riding on that question than who wins or loses one of these Helms-Burton Act cases. Not surprisingly, it’s a question that really smart people have ruminated on for a long time, including none other than Thomas Jefferson, who in a letter to James Madison wrote:
The earth belongs in usufruct to the living; the dead have neither powers nor rights over it. The portion occupied by any individual ceases to be his when he himself ceases to be, and reverts to society.
This Helms-Burton Act case involves claims by Odette Blanco de Fernandez née Blanco Rosell and the estates of her four deceased brothers who are suing Seaboard Marine for trafficking in property that was confiscated by the Cuban government in 1960. The brothers all died after 1996.
Not surprisingly the defendant moved to dismiss the claims by the estates of the deceased brothers on the grounds that these estates acquired their claims after 1996. In other words, defendant argued that when the brothers died their claims (to the extent they’re property subject to transfer) passed to their probate estates (new owners = no claims). Plaintiffs argued the claims were still owned by the deceased brothers, and the only thing the estates were doing (via their personal representatives) was prosecuting those personal rights on behalf of the deceased owners (same owners = viable claims). Here’s how the court summarized this argument:
Plaintiffs contend that “[o]wnership of the decedent’s property maintains with the decedent until it is formally distributed by the personal representative to the heirs and other beneficiaries[.]” … As such, according to Plaintiffs, the deceased Blanco Rosell Siblings still owned their claims to the Confiscated Property, no one else acquired them, and the personal representatives are authorized to manage their claims by bringing this lawsuit on their behalf.
If dead people don’t own property, your Helms-Burton Act claim evaporates at the moment of death.
In line with other federal judges the court in this case didn’t buy plaintiffs’ argument, dismissing their claims. According to the court the deceased brothers no longer owned their claims, when they died those interests (to the extent they’re property subject to transfer) passed to their probate estates as new owners. New owners = no claims. Motion to dismiss granted.
What’s interesting for Florida probate attorneys is the “why” of the court’s ruling, which turns entirely on probate law concepts that come up all the time in our daily practice (even if we’re not conscious of them). Here’s how the judge articulated the basis for her ruling:
The Court rejected Plaintiffs’ argument that “the estates and personal representatives ‘stepped into the shoes’ of the decedents [and] maintain[ed] the original acquisition date of the Confiscated Property” and determined that “upon the death of the four Blanco Rosell Siblings, their assets became property of their respective estates and no longer belonged to them individually.” Id. at 16. See Depriest v. Greeson, 213 So. 3d 1022, 1025 (Fla. 1st DCA 2017); Sharps v. Sharps, 214 So. 2d 492, 495 (Fla. 3d DCA 1968) (“Upon [husband’s] death, in the twinkling of a legal eye, that check became an asset of the husband’s estate.”); see also Fla. Stat. § 732.101(2) (“The decedent’s death is the event that vests the heirs’ right to the decedent’s intestate property.”); Fla. Stat. § 732.514 (“The death of the testator is the event that vests the right to devises unless the testator in the will has provided that some other event must happen before a devise vests.”).
The court in this case relied heavily on the Depriest decision, which I wrote about from the very mundane and practical point of view of why letting family members drive a decedent’s car is a really bad idea. Who knew a simple probate case involving personal injuries caused by someone driving a decedent’s car would one day determine the outcome of dozens of complex federal actions freighted with all of the geopolitical baggage U.S.-Cuba relations have carried for decades?!
Anyway, for those of you looking for a deeper dive into the Florida probate law underlying this case, below is a long quote from Judge Bloom’s order that walks us through her analysis of Depriest. What I find most interesting about this analysis is how it rests on a distinction we don’t often think about as probate attorneys: personal rights vs. property rights.
Florida probate proceedings are by statute in rem proceedings; they deal with property rights. Naturally, probate attorneys are primed to think only in terms of those rights. And that can be a trap, as demonstrated by this Helms-Burton Act case, which turned on personal rights that don’t survive postmortem.
Building on that distinction Judge Bloom then interrogates a simple — yet consequential — question: do dead people own property? Answer: NOT in Florida. This is a must-read for probate attorneys.
In Depriest, an injured motorist brought an action against a decedent’s estate, alleging that the estate was vicariously liable for damages caused by the decedent’s daughter while driving the decedent’s car. Id. at 1024. Before the trial court and on appeal, the parties disputed whether the estate owned the decedent’s car after he died. Id. at 1025. While the Depriest Court ultimately agreed with the trial court’s disposition of the case, they did “not agree that the estate had no legal ownership in Decedent’s car.” Id. at 1025. The court explained as follows:
When Decedent died, “in the twinkling of a legal eye,” the car became an asset of his estate. Sharps v. Sharps, 214 So. 2d 492, 495 (Fla. 3d DCA 1968) (holding that an uncashed check payable to the decedent became an asset of his estate the instant he died, and his widow would have to prove that it was a gift to her individually in order to obtain the proceeds for herself). See also Mills v. Hamilton, 121 Fla. 435, 163 So. 857, 858 (1935) (“It is well settled that at the death of the owner of any personal property the title thereto vests in his personal representative and during the administration the personal representative is entitled to the possession of the same.”).
Although Decedent’s car was an asset of the estate, it did not belong to anyone individually. Decedent’s will did not bequeath the car to anyone, and his daughter and stepson were co-equal beneficiaries under the residuary clause of the will. Therefore, neither the daughter nor the stepson had any specific right to the car, nor did either of them as individuals have a superior right against the other to prohibit use of the car. The car was an asset of the estate and subject to administration. In re Vettese’s Estate, 421 So. 2d 737, 738 (Fla. 4th DCA 1982) (holding that property improperly transferred directly to decedent’s daughters must be returned to the estate for proper administration under the terms of the will and governing law); see also § 731.201(14), Fla. Stat. (2013) (defining “estate” as “the property of a decedent that is subject to administration”); Blechman v. Estate of Blechman, 160 So. 3d 152, 157 (Fla. 4th DCA 2015) (“If the subject property will pass either intestate or by way of a will, then it is part of the decedent’s probate estate.”). Ultimate ownership of the car would not be determined until after resolution of claims, taxes, debts, expenses of administration, and other obligations of the estate, if any. It might have ended up being sold to pay the estate’s obligations, no longer belonging to the estate or any beneficiary.
*5 Id. at 1025-26; see also Sharps, 214 So. 2d at 495 (holding that while “it was not improper for” the decedent’s wife to deposit the subject check into their joint account during her husband’s lifetime, it was improper to deposit the check into the account after her husband died because “that check became an asset of the husband’s estate.”).