First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement.
As we focus on the New Year and a new Biden administration, we make a prediction in each area we cover. In commercial disputes, we believe that a Biden administration is likely to suspend the private right to bring claims under the Helms-Burton Act. In international arbitration, despite some of Biden's statements to the contrary during the campaign, we believe there are likely to be more trade deals and perhaps some reform to the system of settling investment disputes, but international arbitration is here to stay. Finally, in judgment enforcement, we predict that with the continued presence of COVID-19, the states and perhaps even the federal government will limit or preclude certain judgment enforcement tools intended to protect consumers, but the limits could have broader implications.
Commercial Disputes: Helms-Burton Act
As our colleagues explained in more detail in a client advisory on sanctions, the Biden administration will need to decide whether to return to the longstanding approach of suspending the right to bring lawsuits in US federal court under Title III of the 1996 Helms-Burton Act for "trafficking" in property of a US national that had been confiscated by the Cuban government after the 1959 Cuban revolution. Former President Trump’s administration was the first to allow private claims since the enactment of Helms-Burton in 1996. Dozens of lawsuits have been filed, and the authors of this update appear as counsel in a case pending in the United States District Court for the District of Columbia. We think there is a significant chance that a Biden administration will suspend the right to bring actions under Title III. It is worth noting, however, that lawsuits already filed would not be affected by a new suspension of the right and that a suspension of the private right of action does not take effect for 15 days.
On January 25, 2021, the White House announced that administration will review the United States' current Cuba policy. According to an internal statement released by the administration, the plan is to reconsider the policies of former President Donald Trump. It remains to be seen if this prediction pans out, but the new administration is certainly reviewing this policy early on.
International Arbitration: Settlement of Investment Disputes
As our international trade colleagues describe in more detail, most predict that a Biden Administration will engage in more bilateral and multilateral international trade deals than the prior administration. The question is what about dispute resolution in any existing or new deals. While far from a central focus of the campaign, as a candidate, President-elect Biden, expressed his position on investor-state dispute settlement as follows: "I oppose the ability of private corporations to attack labor, health, and environmental policies through the Investor-State Dispute Settlement (ISDS) process and I oppose the inclusion of such provisions in future trade agreements." Joe Biden, Responses to United Steel Workers Candidate Questionnaire (May 17, 2020). While it is difficult to discern a clear policy from this statement, our prediction is that there may be reform of the ISDS system but it is not going away and there will continue to be a dispute resolution mechanism in bilateral and multilateral treaties.
Judgment Enforcement: COVID-19 Limitations
During COVID, the federal government and various states have curtailed certain court-ordered processes that typically fall under judgment enforcement, including, but not limited to, evictions. While not covered much by the news media, on September 1, 2020 the CDC issued an order halting residential evictions to prevent the spread of COVID-19. In one of the first moves of the new administration, President Biden signed executive orders, directing the Centers for Disease Control and Prevention (CDC) to extend its order temporarily halting certain residential evictions through March 31, 2021. As Biden entered office, the CDC's order was set to expire on January 31. Additionally, at least 18 states or local jurisdictions have issued moratoriums on evictions. As we detailed in our May 2020 First Tuesday Update, Enforcing Judgments During COVID-19 Times, judgment enforcement occurs at the local level by local officials and COVID-19 will continue to impact, and likely significantly slow down, judgment enforcement and execution, particularly when targeted at residences and personal property during the pandemic. Our prediction is that the Biden administration’s first priority will be COVID-19-relief and that the moratorium will continue to be extended for some time until the late summer or early fall.
By Steven K. Davidson, Michael J. Baratz, Jared R. Butcher and Molly Bruder Fox