Cuba Embargo in Florida Goes Too Far, Court Says

Courthouse News Service
By IULIA FILIP

Florida cannot stop companies with remote business ties to Cuba from bidding on state or local public contracts, the 11th Circuit ruled.

     Florida passed the Cuba Amendment in May 2012 to ostensibly prevent companies that did business in Cuba or Syria, or were related to such companies, from bidding on state or local public contracts worth at least $1 million. Slated to take effect on July 1, 2012, the law would have applied to any company whose subsidiaries, parent companies or affiliates had business ties to Cuba or Syria, including distant foreign affiliates.

     It also would have required companies to certify that they did not have business operations in any of the two countries when submitting a bid or renewing a contract with a government agency. Any agency or local government entity participating in the contract could impose a civil penalty of $2 million or twice the amount of the contract against companies that filed false certifications.

     Coral Gables-based company Odebrecht Construction sued the Florida Department of Transportation (FDOT) in June 2012 to prevent it from enforcing the amendment against the company. Odebrecht, whose Brazilian parent company had unrelated foreign subsidiaries that did business in Cuba, was one of more than 200 Florida businesses potentially affected by the amendment.

     Claiming that most of its income comes from infrastructure and transportation projects, Odebrecht said the law would prevent it from bidding on high-value public contracts in Florida, including several FDOT contracts worth up to $1.8 billion for which it qualified.

     Odebrecht argued that the law violated the supremacy clause of the U.S. Constitution because it conflicted directly with the federal regime of sanctions against Cuba, and weakened the president's ability to formulate uniform policies concerning Cuba. A federal judge agreed last year and blocked the amendment before it took effect.

     A three-judge panel of the 11th Circuit refused to lift the injunction last week, finding that the state law conflicted with the comprehensive economic sanctions the federal government had imposed for decades to limit American companies from doing business in Cuba.

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