U.S. Court Blocks Cuban Heirs' Claim Over Factory Seized by Castro Regime

A U.S. federal appeals court has upheld the dismissal of a lawsuit filed by seven American citizens, descendants of businessman Ramón Rodríguez Gutiérrez, against two British companies accused of profiting from a tobacco factory confiscated by the Cuban government in 1961.

Last Thursday, the Eleventh Circuit Court of Appeals affirmed the earlier decision by the Federal District Court for the Southern District of Florida in favor of Imperial Brands and WPP.

The court clarified that U.S. courts lack personal jurisdiction over these foreign companies in this matter. This ruling is purely jurisdictional and does not address whether the companies illegally used the property, engaged in "trafficking" according to the Helms-Burton Act, or if the heirs are entitled to compensation.

The plaintiffs hold a 90% stake in Ramón Rodríguez e Hijos Sociedad en Comandita, a company that operated a cigarette factory and an adjacent mixed-use building in Havana before the Castro regime took power.

First-instance documents identify the property as the Partagás factory. The lawsuit claims that the Cuban government seized the company and its assets during the 1961 nationalization of the tobacco industry.

The heirs alleged that Habanos S.A., a state-controlled company, utilized the facilities for manufacturing, storing, marketing, and distributing cigars. Additionally, the state monopoly Tabacuba reportedly set up offices in the neighboring building.

The lawsuit initially named Habanos S.A., Imperial Brands, WPP, and the advertising agencies Young & Rubicam and Burson Cohn & Wolfe as defendants.

Imperial Brands, based in the United Kingdom, acquired Spanish company Altadis in 2007, which held a non-controlling 50% stake in Habanos S.A. The British multinational divested this stake in 2020.

The plaintiffs argued that from 2010 to October 2020, WPP and its subsidiaries assisted in promoting Habanos products related to the seized property through U.S.-based websites and platforms such as Twitter, YouTube, and Instagram.

The claim was filed under Title III of the Helms-Burton Act, which allows U.S. citizens to seek damages from those allegedly using, managing, or benefiting from properties seized by the Cuban government after January 1, 1959, without the owners' consent.

However, the Eleventh Circuit concluded that requiring Imperial Brands and WPP to defend themselves in U.S. courts would impose an "unreasonable" burden.

The judges pointed out that neither company engaged directly in significant related activities within the United States, nor did they maintain a substantial presence justifying federal jurisdiction.

In WPP's case, the plaintiffs attempted to attribute the actions of its U.S. subsidiaries to the parent company. The court found this argument insufficient, as it was not proven that Young & Rubicam and Burson Cohn & Wolfe were mere extensions or alter egos of the parent company.

Moreover, the court rejected the notion that Imperial Brands' indirect stake in Habanos S.A. could make it liable for the Cuban company's actions. The ruling emphasized that Habanos was controlled by the Cuban state, not Imperial.

While the court acknowledged that the heirs have a strong interest in defending their rights under the Helms-Burton Act, it determined that these interests did not outweigh the constitutional challenges of exercising jurisdiction over the two British companies.

The court also noted that U.K. law limits its companies' involvement in lawsuits brought under Title III of the Helms-Burton Act without government approval.

"Under the particular circumstances presented, we hold that bringing WPP and Imperial under U.S. jurisdiction would impose an unreasonable burden on both companies," the court concluded.

The decision solely confirms the dismissal of claims against Imperial Brands and WPP for lack of personal jurisdiction. The judges did not assess the companies' alternative argument that the lawsuit did not present a legally sufficient claim.

Habanos S.A. was previously excluded from the litigation for a different reason: the court determined that the Southern District of Florida was not the appropriate venue for proceedings against that company.

Therefore, the ruling does not absolve the companies of the allegations or establish that the property was not confiscated. Its scope is limited to concluding that, given the specific circumstances of the case, Imperial Brands and WPP cannot be subjected to this process in U.S. courts.