11th Cir. Reverses Dismissal of Suit Against Cos. for Benefiting From Seized Port in Cuba
The U.S. Court of Appeals for the 11th Circuit reversed a lower court's dismissal of sugar producer North American Surgar Industries' suit against five companies for allegedly trafficking the company's property, which was stolen by the Cuban government. Judges Charles Wilson, Robert Luck and Barbara Lagoa held that the lower court incorrectly found that the alleged violations of the Helms-Burton Act only occurred in Cuba (North American Sugar Industries v. Xinjiang Goldwind Science & Technology, 11th Cir. # 23-10126).
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The Helms-Burton Act makes it illegal for anyone to traffic in property confiscated by the Cuban government after Jan. 1, 1959.
North American Sugar brought suit in the U.S. District Court in Southern Florida, alleging that three East Asian companies and two U.S. companies engaged in a conspiracy that "involved Helms-Burton trafficking from China, through Miami, Florida, and then to Puerto Carupano, Cuba." The Cuban government seized a commercial shipping port at Puerto Carupano from North American Sugar in 1960 for its own non-commercial activities. The company alleged that the five defendants engaged in a scheme to ship wind turbines from China to Cuba using the confiscated port.
A Florida court had dismissed the case for lack of personal jurisdiction, finding that the Helms-Burton violations only occurred in Cuba. The appellate court reversed after holding that the lower court failed to account for the act's broad construction of the term "traffic."
Lagoa wrote the decision and said that due to the statute's "broad language," a party can violate the Helms-Burton Act in Florida "even though the confiscated property that the actor 'traffics' is located in Cuba." The law defines "traffics" as when a party knowingly and intentionally sells or uses confiscated property, engages in a commercial activity "using or otherwise benefiting from confiscated property" or participates in or profits from trafficking by or through another person.
The 11th Circuit said this misreading of the law "affected the district court's personal-jurisdiction analysis under the tortious-act prong and business-activity prong of Florida's long-arm statute" and under the Due Process Clause. As a result, the court remanded the personal jurisdiction analysis.
Reviewing Florida's long-arm statute, which establishes jurisdiction in Florida courts over non-residents, the court noted that the law confers specific jurisdiction over non-resident defendants who personally, or through an agent, commit a tortious act within Florida. The appellate court held that such an act is committed within Florida "simply by engaging in Helms-Burton trafficking in Florida so long as the trafficking gives rise to a cause of action." This makes the question: "what did the Defendants do -- in Florida -- to give rise to a cause of action by 'traffic[king]' under the Helms-Burton Act?"
Next, while a non-resident "can commit a tortious act in Florida through telephonic, electronic, or written communications into Florida, that possibility exists only in contexts where the plaintiff suffered an injury in Florida," the court said. As a result, North American Sugar must show that the defendants "committed Helms-Burton trafficking while they were physically located in Florida" to establish jurisdiction, the court held.
Lagoa also held that "the district court also weighed conflicting evidence to conclude -- as a factual matter -- that no Defendant engaged in Helms-Burton trafficking in Florida," even though the motions to dismiss the case "were resolved under a prima facie standard." But the district court didn't hold an evidentiary hearing on what is required when lower courts weigh evidence to resolve factual disputes on personal jurisdiction before trial, the court said.