American & LATAM Airlines Hit With Lawsuit

American Airlines and LATAM Airlines, an airline based in Santiago, Chile, have been hit with a lawsuit filed under Title III of the 1996 Helms-Burton Act.

The litigation makes American Airlines the second U.S. company, after Carnival Cruise Lines, to be sued under the law, which allows Americans to sue companies doing business in Cuba that are allegedly profiting off of land expropriated after the 1959 Cuban revolution. The Helms-Burton Act was first passed in 1996 but every U.S. administration had suspended it until the Trump administration announced it would, for the first time, allow it to take effect.

The complaint was filed Wednesday by Coral Gables-based Rivero Mestre, a law firm that has filed a number of Helms-Burton lawsuits since the law took effect May 2.

Plaintiff Jose Ramon López Regueiro is the son of José López Vilaboy, who, according to the complaint, owned what is now the José Martí International Airport in Havana before it was expropriated by the Cuban government in 1959.

López Vilaboy bought the airport, then referred to as the Rancho Boyeros Airport, in 1952 from Pan American Airways, according to the complaint. He then modernized and improved it by extending the runway and building a new terminal building, the suit alleges.

Neither American Airlines nor LatAm Airlines could immediately be reached for comment.

Rivero Mestre will be holding a press conference on the litigation around noon Wednesday.

American Airlines runs flights from José Martí to several U.S. cities, including Miami, Fort Lauderdale, Houston and Los Angeles. LATAM Airlines provides flights from Havana to a few Latin America countries, including Peru and Chile.

Because of the lack of precedent in Helms-Burton proceedings, it’s unclear how the suit will fare in court. So-called blocking statutes — laws passed in several countries that block Helms-Burton actions — make collecting outside of the U.S. near-impossible. While American Airlines is a U.S. company, it is unclear what U.S. assets can be collected from LATAM Airlines.

Despite the unchartered legal territory, an August ruling in a separate Helms-Burton case involving Carnival Cruise Lines signaled that these suits won’t easily go away. In that ruling, U.S. District Senior Judge James Lawrence King and U.S. District Judge Beth Bloom declined to toss two Helms-Burton lawsuits brought against the cruise line in the Southern District of Florida.

Carnival argued that because it was granted waivers by the U.S. government, its use of the ports are considered “lawful travel” — a claim the judges rejected.

“Based on the text and structure of Helms-Burton, the court holds that the lawful travel exception is an affirmative defense to trafficking that must be established by Carnival, not negated by plaintiff,” King wrote.

The new complaint states that the plaintiff provided American and LATAM airlines 30-days notice before the suit was filed, making the two defendants liable to treble damages.

While the complaint does not specify damages or the property’s value, plaintiff López Regueiro told French news agency AFP that his stake in the airport was worth $24 million at the time of confiscation.

Damages for Helms-Burton litigation are calculated by a formula: the greater of either fair market value of the property at the time of confiscation, plus interest, the current market value of the property or the “amount determined.”

Because of this calculation, previous Helms-Burton suits have claimed damages of hundreds of millions of dollars. This is the case for one suit filed in July against French investment bank Société Générale S.A.

Source: https://www.law.com/dailybusinessreview/2019/09/25/american-and-latam-airlines-hit-with-helms-burton-lawsuit/

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