Exxon Mobil Corp. v. Corporación Cimex, S.A.

Overview

Sovereign immunity prevents US courts from hearing cases against foreign governments in most cases. But a special law may grant permission for corporations to sue Cuban government-owned businesses who privatized industries in the 1960's.

Facts

After Cuba's revolution, the Castro government expropriated oil and gas assets owned by Exxon's predecessor, Esso. Congress enacted the Helms-Burton Act (LIBERTAD Act) in 1996, creating a private right of action against entities that 'traffic' in confiscated Cuban property. Exxon sued Cimex, a Cuban state-owned company, under Title III of the Act, but courts divided on whether sovereign immunity under the FSIA bars such claims independently of Title III.

Issue

Whether the Foreign Sovereign Immunities Act bars Helms-Burton Act Title III suits against Cuban state-owned enterprises as government instrumentalities entitled to sovereign immunity, and whether the FSIA's expropriation exception applies to claims arising from Cuba's nationalization of American-owned property.

Rule

The FSIA (28 U.S.C. § 1604) grants foreign states and their instrumentalities immunity from U.S. courts subject to enumerated exceptions. The expropriation exception (28 U.S.C. § 1605(a)(3)) applies when property is taken in violation of international law and the instrumentality engages in commercial activity in the United States. The Helms-Burton Act (22 U.S.C. § 6082) creates a private right of action against any person that 'traffics' in confiscated Cuban property.

Analysis

Exxon argues Title III of the Helms-Burton Act creates an independent right of action against those trafficking in confiscated property and independently abrogates sovereign immunity of Cuban state entities. Congress expressly intended Title III to override immunity. The statute's text and history demonstrate no separate FSIA exception is required.

Conclusion

The Court held 6-3 that the Helms-Burton Act creates a specific exception to foreign sovereign immunity, allowing U.S. courts to hear suits against Cuban government-owned entities that trafficked in confiscated American property. Exxon's claims against the Cuban state corporation may proceed in federal court.

The U.S. grants general sovereign immunity, but the Helms-Burton Act explicitly restricts that immunity for Cuban agencies when sued under the Act. Suits against Cuba may continue.