Court rules for Exxon Mobil in Cuban confiscation case

 The Supreme Court on Tuesday ruled in Exxon Mobil v. Corporación Cimex that a lawsuit by Exxon Mobil against Cuban state-owned companies for the confiscation of assets owned by subsidiaries of the oil giant’s predecessor can go forward.

Writing for the majority, Justice Brett Kavanaugh explained that the Helms-Burton Act, a federal law passed in 1996, cancels the immunity that the Cuban government and its companies would normally have, so that plaintiffs seeking to rely on that statute to sue them are not required to satisfy an exception to the Foreign Sovereign Immunities Act, a federal law that generally prohibits lawsuits in U.S. courts against foreign governments and their “agencies and instrumentalities.” “Stacking an FSIA requirement on top of the Helms-Burton Act would thwart Congress’s design and directly contravene the President’s foreign policy judgments,” Kavanaugh wrote.

Justice Elena Kagan, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson, dissented. She argued that “[n]othing in the text or ‘architecture’ of the Helms-Burton Act suggests that Congress abrogated the sovereign immunity of these defendants—much less that it did so with the requisite unmistakable clarity.”

The law at the center of the case was the Cuban Liberty and Democratic Solidarity Act, also known as the LIBERTAD Act or the Helms-Burton Act. It allows U.S. nationals to bring lawsuits in federal court against anyone who “traffics in property which was confiscated by the Cuban Government on or after January 1, 1959.” It also gives the president the power to suspend the right to bring a lawsuit when he believes that doing so is “necessary to the national interests of the United States and will expedite a transition to democracy in Cuba.” From 1996 until 2019, when President Donald Trump declined to renew the suspension, U.S. presidents repeatedly suspended the right to bring a lawsuit.

On the same day that the Trump administration ended the suspension, Exxon filed the case in federal court in Washington, D.C., seeking more than $1 billion. It contended that three Cuban-owned companies violated the Helms-Burton Act by trafficking in confiscated property that Exxon owned – specifically, by (among other things), extracting, importing, and refining crude oil and operating service stations using property that Exxon’s subsidiaries had possessed but the Cuban government had confiscated in 1960.

The Cuban companies urged U.S. District Judge Amit Mehta to dismiss the case, arguing that it was barred by the FSIA. Mehta ruled that the Helms-Burton Act does not itself overcome the immunity normally conferred by the FSIA. But, he concluded, one of the exceptions to that immunity – for lawsuits involving “commercial activity” in the United States – did apply to one of the Cuban companies because of its operation of gas stations in Cuba that process money transfers from U.S. residents to Cuba and sell products imported from the United States.

A divided panel of the U.S. Court of Appeals for the District of Columbia Circuit agreed that the FSIA generally bars lawsuits against Cuban state-owned companies in U.S. courts. In an opinion by Chief Judge Sri Srinivasan, the court sent the case back to the lower court for it to take another look at whether the commercial-activity exception applies – namely, whether the Cuban company’s money transfers and sales of U.S. goods at its gas stations have effects in the United States “and whether the effects are sufficiently ‘direct.’”

Exxon appealed to the Supreme Court, which granted review last year. On Tuesday, the justices reversed.

In his 22-page opinion, Kavanaugh emphasized that “one Congress cannot bind another—meaning that a later Congress always may repeal or modify an old law, or enact a new law that is exempt from the old law. In 1996, when Congress passed the Helms-Burton Act, Congress was free to directly abrogate the foreign sovereign immunity of Cuban agencies and instrumentalities, thereby overriding the FSIA.”

That is exactly what it did, Kavanaugh concluded. First, he wrote, Congress in the Helms-Burton Act indicated that it intended to eliminate immunity under the FSIA. The law creates a right to sue that “expressly applies against Cuban agencies and instrumentalities”: it “explicitly confers a private right of action for any U. S. national whose ‘property’ was ‘confiscated by the Cuban Government’” to sue “any person that … traffics in” that property. And the law defines “person” broadly, Kavanaugh noted, “to include ‘any agency or instrumentality of a foreign state.’” 

Second, Kavanaugh continued, “Congress does not ordinarily enact self-defeating statutes.” The Helms-Burton Act was intended to provide a remedy for U.S. nationals whose property had been seized, he wrote, but the Cuban companies’ theory would “largely negate” that remedy. It would rarely, if ever, be possible for plaintiffs to also satisfy one of the exceptions to the FSIA, Kavanaugh posited, because the Helms-Burton Act “codified a comprehensive economic embargo against Cuba and barred most commercial interactions between Americans and Cubans.”

Third, Kavanaugh pointed to the fact that, for purposes of jurisdiction, lawsuits brought under the Helms-Burton Act fall under a different provision of federal law than lawsuits brought under the FSIA. The Helms-Burton Act classifies such lawsuits as covered by the provision that “allows civil actions to proceed in federal court whenever they arise ‘under the Constitution, laws, or treaties of the United States,’” while lawsuits under the FSIA are governed by the provision that gives federal district courts the power to hear lawsuits against foreign countries. In making this distinction, Kavanaugh concluded, “Congress made clear that actions under the Helms-Burton Act are not actions under the FSIA.”

Fourth and finally, Kavanaugh suggested that the president’s power to suspend lawsuits under the Helms-Burton Act “based on current security and foreign policy assessments” is analogous to the scheme that was in place for foreign sovereign immunity before the FSIA was enacted in 1976, under which decisions about immunity were “the province of the Executive Branch.” “It is not plausible,” Kavanaugh wrote, “to conclude that Congress, in the Helms-Burton Act, in essence reinstated the pre-FSIA immunity regime while simultaneously subjecting suits under the Act to the FSIA.”

In her dissent, Kagan countered that whether the Cuban-owned companies are immune from lawsuits in U.S. courts “depends on whether an FSIA exception is met.” The majority’s contrary conclusion, she said, rests “on the ground that a different law, the Helms-Burton Act, abrogates (in nonlegal speak, eliminates) the immunity that the FSIA may otherwise grant. The problem for the majority is that the bar for finding” that Congress has repealed the general presumption of immunity in the FSIA “is high,” Kagan said: “Congress must make its intent to abrogate ‘unmistakably clear in the language of the statute.’” But Congress has failed to do so here, Kagan concluded. As an initial matter, she noted, nothing in the text of the Helms-Burton Act says anything about repealing sovereign immunity. And Congress knew how to do so when it wanted to: in another provision of the Helms-Burton Act, Congress amended the FSIA’s rules governing a different kind of immunity (regarding when property owned by the Cuban government can be seized to carry out judgments).

Kagan also expressed skepticism about Kavanaugh’s assertion that Congress must have intended to repeal immunity under the FSIA, because plaintiffs would never be able to satisfy any of that law’s exceptions. Indeed, she observed, Exxon may have shown in this case that the FSIA’s commercial-activity exception applies: the district court had ruled that it did apply to one of the Cuban companies because of its operation of gas stations in Cuba that process money transfers from U.S. residents to Cuba and sale of products imported from the United States.

https://www.scotusblog.com/2026/06/court-rules-for-exxon-mobil-in-cuban-confiscation-case/