Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-09-05196/USCOURTS-caDC-09-05196-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

---

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 24, 2010 Decided March 29, 2011 

No. 09-5196 

EMPRESA CUBANA EXPORTADORA DE ALIMENTOS Y 

PRODUCTOS VARIOS, DOING BUSINESS AS CUBAEXPORT, 

APPELLANT

v. 

UNITED STATES DEPARTMENT OF THE TREASURY, OFFICE OF 

FOREIGN ASSETS CONTROL, ET AL., 

APPELLEES

Appeals from the United States District Court 

for the District of Columbia 

(No. 1:06-cv-01692) 

David H. Bernstein argued the cause for appellant. With 

him on the briefs were Carl Micarelli and Peter M. Brody. 

Jonathan H. Levy, Attorney, U.S. Department of Justice, 

argued the cause for appellees. With him on the brief were 

Tony West, Assistant Attorney General, U.S. Department of 

Justice, Ronald C. Machen, Jr., U.S. Attorney, and Douglas 

N. Letter, Attorney, U.S. Department of Justice. 

Before: KAVANAUGH, Circuit Judge, and EDWARDS and 

SILBERMAN, Senior Circuit Judges. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 1 of 25
2 

 Opinion for the Court filed by Circuit Judge

KAVANAUGH, with whom Senior Circuit Judge EDWARDS

joins. 

 Dissenting opinion filed by Senior Circuit Judge 

SILBERMAN. 

 KAVANAUGH, Circuit Judge: First enacted in 1917, the 

Trading with the Enemy Act authorizes the President, under 

specified conditions, to impose embargoes on trade with 

foreign nations. In 1963, acting pursuant to that statute, 

President Kennedy directed the Department of the Treasury to 

issue the Cuban Assets Control Regulations. Those 

regulations prohibit most transactions between American and 

Cuban persons. The regulations authorize the Secretary of the 

Treasury to make certain exceptions to the embargo, but the 

regulations state that any such exceptions “may be amended, 

modified, or revoked at any time.” 

 As issued in 1963, the Treasury regulations contained an 

exception allowing Cuban-affiliated entities to register and 

renew U.S. trademarks. In 1976, acting under that exception, 

a Cuban corporation known as Cubaexport registered the 

trademark HAVANA CLUB with the U.S. Patent and 

Trademark Office. In 1996, one of Cubaexport’s subsidiaries 

renewed the trademark. But in 1998, Congress modified the 

exception to the Cuban Assets Control Regulations that had 

allowed Cubaexport to register and renew its HAVANA 

CLUB trademark. The 1998 law barred renewals of certain 

trademarks, including Cubaexport’s. As a result, the 

Department of the Treasury’s Office of Foreign Assets 

Control prohibited Cubaexport from renewing its trademark 

when the trademark again came due for renewal in 2006. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 2 of 25
3 

 In this Court, Cubaexport invokes the presumption 

against retroactivity and argues that the 1998 law should be 

interpreted to bar only new trademark registrations, not 

renewals of previously registered trademarks. Cubaexport 

also contends that, if the 1998 law does bar renewal of 

previously registered trademarks, then it violates the 

substantive due process doctrine. We disagree with both 

arguments. Because the Cuban Assets Control Regulations 

stated that exceptions were revocable at any time, Cubaexport 

had no vested right to perpetual renewal of the trademark. 

Therefore, the presumption against retroactivity does not 

apply, and we must interpret the 1998 law according to its 

terms – namely, to bar both new registrations and renewals of 

previously registered trademarks. Moreover, the 1998 

legislation readily satisfies the deferential substantive due 

process test. Cubaexport raises several other contentions, but 

they likewise are without merit. We therefore affirm the 

District Court’s judgment against Cubaexport. 

I 

 The Trading with the Enemy Act of 1917 authorizes the 

President to impose comprehensive economic sanctions on 

foreign nations in certain circumstances. See 50 U.S.C. app. 

§ 5(b).1

 In 1963, pursuant to that Act and President 

Kennedy’s order, the Department of the Treasury issued the 

Cuban Assets Control Regulations, 31 C.F.R. Part 515. Those 

regulations prohibit, among other things, transactions by “any 

 1

 As enacted in 1917, the Act authorized sanctions in war and 

peacetime national emergencies. In 1977, Congress amended the 

Act so that it no longer applies to peacetime emergencies. But 

Congress grandfathered the embargo against Cuba, allowing its 

extension by presidential declaration. See Pub. L. No. 95-223, 

§ 101, 91 Stat. 1625 (codified as note following 50 U.S.C. app. 

§ 5); see generally Regan v. Wald, 468 U.S. 222, 226-29 (1984). 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 3 of 25
4 

person subject to the jurisdiction of the United States” 

involving property in which Cuba or any Cuban national has 

“any interest of any nature whatsoever, direct or indirect.” 

31 C.F.R. § 515.201. 

 Under the regulations, exceptions may be “specifically 

authorized by the Secretary of the Treasury (or any person, 

agency, or instrumentality designated by him).” Id. Such 

exceptions may take two forms: A so-called “general license” 

is a general exception written into the Treasury regulations 

themselves. A “specific license” is an exception made by the 

Department of the Treasury for a specific applicant. Id.

§§ 501.801, 515.316-.318. 

 Under the regulations, exceptions are not forever. Since 

1963, the regulations have cautioned that any exception to the 

trade embargo “may be amended, modified, or revoked at any 

time.” See 28 Fed. Reg. 6974, 6985 (July 9, 1963); see also

31 C.F.R. § 501.803. 

 This case involves trademarks. As issued in 1963, the 

Cuban Assets Control Regulations contained an exception 

allowing Cuban-affiliated entities to register and renew U.S. 

trademarks. See 28 Fed. Reg. 6974, 6982 (July 9, 1963). 

 In 1974, Cubaexport – a company owned by the Cuban 

government – applied to the U.S. Patent and Trademark 

Office to register the trademark HAVANA CLUB for the sale 

of rum. In 1976, as a result of the regulatory exception 

allowing Cuban companies to register U.S. trademarks, the 

U.S. Patent and Trademark Office approved Cubaexport’s 

application. In 1996, one of Cubaexport’s subsidiaries 

renewed the trademark pursuant to that same exception to the 

Cuban Assets Control Regulations. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 4 of 25
5 

 In 1998, however, Congress passed and President Clinton 

signed a law eliminating the ability of Cuban companies to 

register or renew certain trademarks. See Omnibus 

Consolidated and Emergency Supplemental Appropriations 

Act, 1999, Pub. L. No. 105-277, § 211(a)(1), 112 Stat. 2681. 

That Act provides: 

Notwithstanding any other provision of law, no 

transaction or payment shall be authorized or approved 

pursuant to section 515.527 of title 31, Code of Federal 

Regulations, as in effect on September 9, 1998, with 

respect to a mark, trade name, or commercial name that is 

the same as or substantially similar to a mark, trade 

name, or commercial name that was used in connection 

with a business or assets that were confiscated unless the 

original owner of the mark, trade name, or commercial 

name, or the bona fide successor-in-interest has expressly 

consented. 

As of September 9, 1998, 31 C.F.R. § 515.527 stated: 

Transactions related to the registration and renewal in 

the United States Patent and Trademark Office or the 

United States Copyright Office of patents, trademarks, 

and copyrights in which the Government of Cuba or a 

Cuban national has an interest are authorized. 

§ 515.527(a) (emphasis added). Thus, because of the 1998 

Act and its reference to 31 C.F.R. § 515.527, Cubaexport’s 

trademark no longer fit within the regulatory exception for 

trademarks that had existed since 1963.2

 The new law 

 2

 The 1998 Act applies to marks used in connection with a 

business or assets that were “confiscated.” That description covers 

the HAVANA CLUB mark. In 1960, Cuba’s Communist 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 5 of 25
6 

therefore posed a problem for Cubaexport when the 

HAVANA CLUB trademark came due for renewal in 2006 

and Cubaexport tried to renew the mark. The Department of 

the Treasury’s Office of Foreign Assets Control, known as 

OFAC, informed Cubaexport’s counsel that the company was 

legally barred from paying the fee required to renew the 

trademark. 

 Cubaexport then filed suit. Cubaexport contended that 

the 1998 Act violated the substantive due process doctrine. 

Cubaexport further asserted that OFAC’s decision 

contravened the procedural requirements of the Due Process 

Clause and the Administrative Procedure Act, and that 

OFAC’s decisions were arbitrary and capricious under the 

Administrative Procedure Act. The District Court rejected 

each claim and granted summary judgment to the 

Government. We review the District Court’s decision of 

those questions of law de novo. 

II 

 To begin, we think it clear that the 1998 Act bars not just 

registration of new trademarks but also renewals of previously 

registered trademarks. The Act specifically applies to 

“transactions” and “payments.” A renewal is both. A 

trademark renewal is a transaction. See THE AMERICAN 

HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE (3d ed. 

1996) (transaction is “[s]omething transacted, especially a 

 

government confiscated the businesses and facilities owned by the 

distiller José Arechabala, S.A. Among the company’s assets at that 

time were several U.S. trademark registrations for the rum brand 

HAVANA CLUB. By 1974, those registrations had expired, at 

which point Cubaexport registered the HAVANA CLUB mark as 

its own. See Havana Club Holding, S.A. v. Galleon S.A., 203 F.3d 

116, 127-30 (2d Cir. 2000). 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 6 of 25
7 

business agreement or exchange” and to transact is to “do, 

carry on, or conduct: transact business over the phone; 

transacting trade agreements”). And a trademark renewal 

requires a payment. See 15 U.S.C. § 1059 (requiring payment 

of fee to renew trademark). 

 Even more to the point, the 1998 Act specifically crossreferences “section 515.527 of title 31, Code of Federal 

Regulations, as in effect on September 9, 1998.” The 

regulation at 31 C.F.R. § 515.527 expressly listed both 

registrations and renewals as “transactions.” 

 Therefore, by its terms, the 1998 Act plainly bars both 

new trademark registrations and renewals of previously 

registered trademarks. As a result of the 1998 Act, 

Cubaexport was prohibited from renewing its HAVANA 

CLUB trademark when it tried to do so in 2006. Invoking the 

presumption against retroactivity, Cubaexport argues that the 

1998 Act bars only the new registration of trademarks, not the 

renewal of previously registered marks such as Cubaexport’s. 

Alternatively, Cubaexport contends that the 1998 Act 

contravenes the substantive due process doctrine. We 

disagree with both arguments. 

A 

 Under the branch of the presumption against retroactivity 

doctrine that is relevant here, a statute is interpreted not to 

have retroactive effect if (i) the statute does not clearly 

specify its temporal scope3

 and (ii) applying the statute 

 3

 The precedents are murky as to how precise a statute’s 

temporal reach must be in order to overcome the presumption 

against retroactivity. The Supreme Court has sometimes required 

an “express command” – akin to a clear statement – for a statute to 

have retroactive effect. Landgraf v. USI Film Products, 511 U.S. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 7 of 25
8 

retroactively would affect a party’s vested rights. See 

Fernandez-Vargas v. Gonzalez, 548 U.S. 30, 37 (2006).4

 

Cubaexport contends that it acquired a vested right to renewal 

of the HAVANA CLUB trademark when it first registered the 

mark in 1976. It argues that the 1998 Act therefore should be 

 

244, 280 (1994). However, the Court more recently added that “in 

the absence of language as helpful as that we try to draw a 

comparably firm conclusion about the temporal reach specifically 

intended by applying ‘our normal rules of construction.’” 

Fernandez-Vargas v. Gonzalez, 548 U.S. 30, 37 (2006) (quoting 

Lindh v. Murphy, 521 U.S. 320, 326 (1997)). We need not 

determine here how clear a statute must be to override the 

presumption against retroactivity (and in turn whether the language 

of the 1998 Act suffices to meet that standard) because, as we 

explain below, Cubaexport’s lack of a vested right means the 

presumption does not apply in any event in this case. Cf. 

Fernandez-Vargas, 548 U.S. at 41, 42-47 (statute lacks requisite 

“clear statement” to apply retroactively, but presumption does not 

apply because statute has no retroactive effect). 

4

 The presumption against retroactivity also applies when a 

statute would “increase a party’s liability for past conduct, or 

impose new duties with respect to transactions already completed.” 

Id. at 37 (quoting Landgraf, 511 U.S. at 280). We do not 

understand Cubaexport to advance an argument under that branch 

of the retroactivity doctrine. Nor could it. The 1998 Act did not 

increase Cubaexport’s liability or impose any new duties with 

respect to past conduct or completed transactions. For example, a 

hypothetical 1998 law that required Cubaexport to pay $10,000 for 

its 1976 trademark registration would impose new liabilities or 

duties for purposes of that branch of the retroactivity doctrine. The 

actual 1998 Act at issue here, however, did not increase 

Cubaexport’s liability or require Cubaexport to do anything. 

Rather, it merely prevented Cubaexport from renewing a trademark 

that was subject to the Cuban Assets Control Regulations. The 

relevant retroactivity question is whether the 1998 Act deprived 

Cubaexport of a vested right to renew such a trademark. It did not, 

as we explain in the text. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 8 of 25
9 

construed (notwithstanding its text) to bar only new 

registrations, not renewals of marks that were first registered 

before 1998. 

 The key question in this case with respect to the 

presumption against retroactivity is whether, as of 1998, 

Cubaexport possessed a vested right to renewal of the 

trademark. We think not. Even assuming that most 

trademark registrants acquire a perpetual right to renew their 

marks when they first register them, cf. Ewing v. Standard Oil 

Co., 42 App. D.C. 321, 324 (D.C. Cir. 1914), Cubaexport did 

not. The Cuban Assets Control Regulations – which 

generally bar U.S. transactions involving Cuban-owned 

companies – have been in effect since 1963. When 

Cubaexport first registered its mark in 1976, the regulations 

contained an exception allowing trademark registrations and 

renewals. But the regulations also specified that any such 

exception “may be amended, modified, or revoked at any 

time.” 28 Fed. Reg. 6974, 6985 (July 9, 1963). 

 Because Cubaexport’s right to renew the trademark was 

expressly revocable at any time, Cubaexport did not obtain a 

vested right to perpetual renewal of the HAVANA CLUB 

trademark when it registered the mark in 1976. See 

Fernandez-Vargas, 548 U.S. at 45 (presumption of 

retroactivity does not apply where party “had an ample 

warning” of change in law); Dames & Moore v. Regan, 453 

U.S. 654, 673 n.6 (1981) (no protected property interest if 

contingent on revocable exception to embargo regulations). 

Before 1998, Cubaexport perhaps had an expectation that it 

would be able to renew its trademark if the regulatory 

exception was not revoked. But it did not have a vested right. 

And a law that merely “upsets expectations based in prior 

law” – such as the 1998 statute at issue here – does not trigger 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 9 of 25
10 

the presumption against retroactivity. Landgraf v. USI Film 

Products, 511 U.S. 244, 269 (1994). 

 Contrary to the suggestion of the dissent, we do not 

purport to do anything novel when we refer to a “vested 

right.” We simply apply the Supreme Court’s precedents, 

which have consistently used the term “vested right” in 

considering this branch of the presumption against 

retroactivity doctrine. See, e.g., Fernandez-Vargas, 548 U.S. 

at 37 (“The modern law thus follows Justice Story’s definition 

of a retroactive statute, as ‘taking away or impairing vested 

rights . . . .’”) (alterations omitted); Republic of Austria v. 

Altmann, 541 U.S. 677, 693 (2004) (“retroactive statutes may 

upset settled expectations by taking away or impairing vested 

rights acquired under existing laws”) (internal quotation 

marks and alterations omitted); INS v. St. Cyr, 533 U.S. 289, 

321 (2001) (“A statute has retroactive effect when it takes 

away or impairs vested rights acquired under existing laws . . . 

.”) (internal quotation marks omitted); Landgraf, 511 U.S. at 

269 (“[E]very statute, which takes away or impairs vested 

rights acquired under existing laws . . . must be deemed 

retrospective.”); id. at 274 (no retroactivity found in prior case 

because “plaintiff had no ‘vested right’”). Adhering to the 

Supreme Court’s precedents, this Court has likewise 

repeatedly referred to vested rights in retroactivity cases. See, 

e.g., Arkema Inc. v. EPA, 618 F.3d 1, 7 (D.C. Cir. 2010) (“A 

rule operates retroactively if it takes away or impairs vested 

rights.”); Marrie v. SEC, 374 F.3d 1196, 1207 (D.C. Cir. 

2004) (“a rule is retroactive if it takes away or impairs vested 

rights”) (internal quotation marks omitted); Celtronix 

Telemetry, Inc. v. FCC, 272 F.3d 585, 589 (D.C. Cir. 2001) 

(no retroactivity under Landgraf because plaintiff had “no 

vested right” in previous licensing regime given that “the 

Commission always retained the power to alter the term of 

existing licenses by rulemaking”). 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 10 of 25
11 

 The dissent says: “Whether OFAC could revoke” 

Cubaexport’s “right – and under what conditions – is quite 

beside the point.” Dissenting Op. at 3. We disagree. We 

think the Government’s longstanding authority to revoke 

Cubaexport’s right to renewal is exactly the point. In our 

judgment, the Government’s express and longstanding 

revocation authority devastates Cubaexport’s argument that it 

somehow had a “vested right” to perpetual renewal of the 

trademark.5

 Because Cubaexport did not possess a vested right to 

renewal of the trademark, the presumption against 

retroactivity does not apply in this case. We therefore 

interpret the 1998 Act according to its ordinary meaning. By 

its plain terms, the Act bars both new registrations and 

renewals of marks (such as Cubaexport’s) that were first 

 5

 The dissent also relies on a Second Circuit case interpreting a 

different provision of the 1998 Act, a provision barring Cuban 

trademark holders from obtaining injunctive relief to enforce 

certain trademarks. But our approach is consistent with that of the 

Second Circuit. That court stated that the 1998 Act may lack 

sufficient precision to overcome the presumption against 

retroactivity, but it ultimately declined to decide that issue or apply 

the presumption against retroactivity because, under the Supreme 

Court’s analysis in Landgraf, “application of the new provision 

[was] not retroactive.” Havana Club Holding, S.A. v. Galleon S.A., 

203 F.3d 116, 128-29 (2d Cir. 2000) (quoting Landgraf, 511 U.S. at 

273). In the portion of Landgraf relied on by the Second Circuit, 

the Supreme Court explained that “relief by injunction operates in 

futuro,” and thus a “plaintiff had no vested right” to such relief. 

Landgraf, 511 U.S. at 273-74 (internal quotation marks omitted and 

second emphasis added). As in the Second Circuit case, 

Cubaexport’s lack of a vested right here means we need not reach 

the question whether the 1998 Act is so clear as to overcome the 

presumption against retroactivity. See supra note 3. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 11 of 25
12 

registered before 1998. See Fernandez-Vargas, 548 U.S. at 

42-47. 

B 

 According to Cubaexport, if the 1998 Act bars renewal of 

previously registered trademarks, then the statute violates the 

substantive due process doctrine. 

 Cubaexport’s argument rests on an inflated conception of 

substantive due process. Unless legislation infringes a 

fundamental right, judicial scrutiny under the substantive due 

process doctrine is highly deferential. See Washington v. 

Glucksberg, 521 U.S. 702, 720-22 (1997). This case does not 

involve a fundamental right – and Cubaexport does not claim 

otherwise. Therefore, under the Supreme Court’s precedents, 

we ask only whether the legislation is rationally related to a 

legitimate government interest. See United States v. Carlton, 

512 U.S. 26, 30-31 (1994); FCC v. Beach Communications, 

Inc., 508 U.S. 307, 313-15 (1993); Ferguson v. Skrupa, 372 

U.S. 726 (1963); Williamson v. Lee Optical, Inc., 348 U.S. 

483 (1955); see also Lochner v. New York, 198 U.S. 45, 74-76 

(1905) (Holmes, J., dissenting). 

 If a statute applies retroactively – for example, when a 

statute imposes new duties or liabilities for past acts – the 

“retroactive aspects of legislation, as well as the prospective 

aspects, must meet the test of due process, and the 

justifications for the latter may not suffice for the former. But 

that burden is met simply by showing that the retroactive 

application of the legislation is itself justified by a rational 

legislative purpose.” Carlton, 512 U.S. at 31 (quoting 

Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 

717, 729-30 (1984)) (alterations omitted); see also Usery v. 

Turner Elkhorn Mining Co., 428 U.S. 1, 16-17 (1976); cf. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 12 of 25
13 

Eastern Enterprises v. Apfel, 524 U.S. 498, 547-50 (1998) 

(Kennedy, J., concurring). 

 The deferential substantive due process test is easily 

satisfied here. The 1998 Act is rationally related to the 

legitimate government goals of isolating Cuba’s Communist 

government and hastening a transition to democracy in Cuba. 

See Memorandum from Paul Simons, Deputy Assistant 

Secretary of State (July 28, 2006), Joint Appendix 85-86. The 

Act reinforces the Castro regime’s isolation by denying 

Cuban-affiliated entities the use of U.S. trademarks related to 

businesses and assets confiscated by the Cuban government. 

And by barring renewal of trademarks that had previously 

been registered (not just new registrations), the 1998 Act 

applies to a greater number of such trademarks. Moreover, 

any unfairness that otherwise might arise from applying the 

1998 Act to renewals is mitigated – indeed, eliminated – by 

the fact that the Cuban Assets Control Regulations had clearly 

warned that exceptions for trademarks were revocable at any 

time. Cf. Eastern Enterprises, 524 U.S. at 549-50 (Kennedy, 

J., concurring). Therefore, for purposes of the substantive due 

process doctrine, the 1998 Act – both in its substance and its 

application to renewal of pre-1998 trademarks – is rationally 

related to a legitimate government interest.6

 Because the 1998 Act is clear and because Cubaexport’s 

constitutional claim fails, we are likewise unpersuaded by 

Cubaexport’s constitutional avoidance argument – namely, 

that, in order to avoid a serious constitutional question, we 

should construe the 1998 law to apply only to those marks 

 6

 The Government separately argues that Cubaexport has no 

substantive due process rights because it is a foreign national 

without a substantial connection to the United States. Because we 

reject Cubaexport’s substantive due process argument on other 

grounds, we need not consider that contention. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 13 of 25
14 

first registered after 1998. A clear statute and a weak 

constitutional claim are not a recipe for successful invocation 

of the constitutional avoidance canon. See Clark v. Martinez, 

543 U.S. 371, 381 (2005) (requiring “competing plausible 

interpretations of a statutory text” and “serious constitutional 

doubts” to apply the canon). 

III 

 Cubaexport also argues that it was entitled under the 

Administrative Procedure Act to notice and an opportunity to 

be heard before the Department of the Treasury’s Office of 

Foreign Assets Control determined that Cubaexport could not 

renew the HAVANA CLUB trademark. See 5 U.S.C. 

§ 558(c). But Cubaexport in fact received notice and an 

opportunity to be heard – and was heard – prior to the 

agency’s final determination. 

 After enactment of the 1998 law, Cubaexport’s trademark 

next came up for renewal in 2006. Because of the 1998 

statute, Cubaexport could no longer rely on the regulatory 

exception (known as the “general license”) for trademarks. In 

a letter dated April 6, 2006, OFAC thus notified Cubaexport 

that the company would need an individualized exception 

from OFAC (known as a “specific license”) in order to renew 

the HAVANA CLUB trademark with the U.S. Patent and 

Trademark Office. The OFAC letter invited Cubaexport to 

communicate with OFAC in writing or by telephone. 

Cubaexport did so, writing two letters to the U.S. Patent and 

Trademark Office on which it copied OFAC. On July 28, 

2006, however, OFAC notified Cubaexport of its decision 

denying Cubaexport permission to renew the mark. OFAC 

explained to Cubaexport that “under these circumstances” 

(that is, after enactment of the 1998 law) the Cuban Assets 

Control Regulations barred renewal of the HAVANA CLUB 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 14 of 25
15 

mark unless OFAC were to make an individualized exception 

(a “specific license”). The agency went on to say that it was 

denying Cubaexport’s request for an individualized exception. 

OFAC denied that request based in part on the State 

Department’s guidance that issuance of such a license to 

Cubaexport would be “inconsistent with U.S. policy.” 

 This sequence of events belies Cubaexport’s claim that it 

did not receive notice and an opportunity to be heard. 

Cubaexport obviously does not like the answer it received, but 

it was allowed to (and did) advance its arguments to OFAC.7

 Relying on 5 U.S.C. § 558(c), Cubaexport separately 

suggests that a formal adjudication was necessary in order for 

the Government to deny renewal of Cubaexport’s trademark. 

According to Cubaexport, because the regulatory exception 

for trademarks is called a “general license,” OFAC’s 

determination that Cubaexport no longer qualified for that 

exception constituted a license revocation governed by 

§ 558(c). But even assuming that the general regulatory 

exception for trademarks meets the definition of a “license” 

for purposes of § 558(c), the text of § 558(c) does not require 

formal adjudications for license revocations. Section 558(c) 

mentions §§ 556 and 557 (which are the provisions governing 

formal adjudication) only in connection with license 

applications, not revocations. Four courts of appeals have so 

interpreted § 558(c). See Gallagher & Ascher Co. v. Simon, 

687 F.2d 1067, 1073-75 (7th Cir. 1982) (collecting cases). 

Cubaexport cites a footnote to the contrary in Porter County 

Chapter of the Izaak Walton League, Inc. v. NRC, 606 F.2d 

1363, 1368 n.12 (D.C. Cir. 1979). However, even accepting 

that this footnote applies to the regulatory exception at issue 

 7

 Cubaexport’s procedural due process argument falters for the 

same reason. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 15 of 25
16 

here, that footnote observation was at best dicta, and we 

decline to elevate it now to a holding. 

IV 

 Cubaexport also contends that OFAC’s actions were, for 

a variety of reasons, substantively arbitrary and capricious in 

violation of the Administrative Procedure Act. See 5 U.S.C. 

§ 706(2)(A). We can quickly dispatch those claims. 

 Cubaexport challenges OFAC’s determination that the 

Cuban Assets Control Regulations did not authorize renewal 

of its trademark. But as we have already explained, the 1998 

law passed by Congress applies to the HAVANA CLUB 

mark. OFAC was of course required to follow the 1998 law. 

 Cubaexport also objects that OFAC, in determining that 

the Cuban Assets Control Regulations did not authorize 

renewal of its trademark, primarily relied on factual findings 

from a related suit, see Havana Club Holding, S.A. v. Galleon 

S.A., 203 F.3d 116, 127-30 (2d Cir. 2000), to which 

Cubaexport was not a party. Cubaexport argues that because 

it never had an opportunity to contest those findings before 

OFAC, it could not convince the agency that the original 

owner of the mark, José Arechabala, S.A., was insolvent 

when the Cuban government nationalized the business. 

Consequently, according to Cubaexport, the business was not 

“confiscated” under the terms of the 1998 Act. Even if we 

assume that Cubaexport could demonstrate the insolvency of 

José Arechabala, S.A., we believe it is obvious that the 

business was confiscated within the meaning of the statute. 

As both parties agree, the Cuban government nationalized the 

business’s facilities, factories, and other industrial and 

commercial enterprises in 1960. See THE AMERICAN 

HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE (3d ed. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 16 of 25
17 

1996) (defining confiscated as “[s]eized by a government; 

appropriated”). 

 Cubaexport further contends that the agency acted 

irrationally in refusing to carve out an individualized 

exception to the 1998 Act for Cubaexport. Recall that even 

though the 1998 Act eliminated the general exception (the 

“general license”) for certain trademarks, OFAC still retained 

residual authority to make an individualized exception to the 

trade embargo (a “specific license”). But Cubaexport has 

failed to show that OFAC acted unreasonably in declining to 

grant such an exception. 

 Cubaexport complains, in particular, that OFAC should 

not have relied on the State Department’s advice in reaching 

its decision. That complaint doesn’t make much sense. The 

State Department and OFAC are parts of a single Executive 

Branch headed by one President, and we decline to impose a 

novel Administrative Procedure Act rule that would deter one 

executive agency from consulting another about matters of 

shared concern. See U.S. CONST. art. II; cf. Sierra Club v. 

Costle, 657 F.2d 298, 405-06 (D.C. Cir. 1981). Here, 

moreover, it was entirely sensible for OFAC to reach out to 

the Department of State. After all, the State Department is an 

active participant in the Nation’s foreign policy, and the 

Cuban embargo is of course a tool of foreign policy. 

 Finally, contrary to Cubaexport’s contention, OFAC has 

not acted in an irrationally inconsistent manner in granting 

individualized exceptions to the Cuban embargo regulations. 

It is true that OFAC has allowed Cubaexport to pay legal 

expenses related to the HAVANA CLUB mark. But that is 

not inconsistent with OFAC’s refusal to allow Cubaexport to 

renew that trademark. OFAC’s longstanding regulations treat 

payment of legal expenses differently from transactions in 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 17 of 25
18 

intellectual property. See 31 C.F.R. §§ 515.512 & 515.527(c). 

That is logical; after all, paying attorneys and registering or 

renewing a trademark may trigger different analyses of the 

competing interests. We see no reason that an exception to 

the regulations for legal expenses would require OFAC to 

make an exception for this matter. 

* * * 

 We have considered all of Cubaexport’s arguments and 

find them without merit. We therefore affirm the judgment of 

the District Court. 

So ordered. 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 18 of 25
SILBERMAN, Senior Circuit Judge, dissenting: The court’s

opinion, in my view, is unsound doctrinally, both with regard to

principles of statutory interpretation and to basic tenets of

administrative law. The Department of Treasury, through its

Office of Foreign Assets Control (“OFAC”), has allowed Cuban

companies to register trademarks in the United States under the

Cuban Assets Control Regulations, see 28 Fed. Reg. 6974, 6982

(July 9, 1963), even though the companies are not permitted to

sell their products here.1 Cubaexport obtained its HAVANA

CLUB trademark in 1976, pursuant to a general license in the

Cuban Assets Control Regulations authorizing “[t]ransactions

related to the registration and renewal . . . of patents, trademarks,

and copyrights in which the government of Cuba or a Cuban

national has an interest.” 31 C.F.R. § 515.527(a)(1). 

When Cubaexport sought to renew its trademark in 2006,

OFAC, by a letter (an informal adjudication), concluded that

renewal of the HAVANA CLUB trademark was prohibited.

OFAC’s director explained in a declaration to the district court

that he based this decision on 31 C.F.R. § 515.527(a)(2),

OFAC’s regulation implementing section 211. OFAC also

denied Cubaexport’s request for a specific license to renew its

trademark based on the same regulation. Nowhere in its

declaration did OFAC ground its decision in its power to modify

or revoke a general license pursuant to 31 C.F.R. § 501.803

(upon which the majority puts great significance). 

* * *

1

 That may be in anticipation of a regime change. As the

Solicitor of Labor in 1970 at an International Labor Organization

meeting in Geneva, I responded to a Cuban diplomat’s attack on the

U.S. with a disdainful rejection “because the Cuban government

represented only a temporary political phenomenon.” Time has

stretched my term “temporary.”

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 19 of 25
2

My disagreement with the majority centers on the court’s

disposition of Cubaexport’s retroactivity argument. Cubaexport

contends that the presumption against retroactivity, see Landgraf

v. USI Film Prods., 511 U.S. 244, 278-80 (1994),2 requires us to

read section 211 as barring only the new registration of

trademarks, not the renewal of previously-registered trademarks

such as Cubaexport’s. The majority dismisses this appeal based

on its notion that Cubaexport lacks a “vested right” in its

HAVANA CLUB trademark. See Maj. Op. at 7. My colleagues

may well be correct that the power OFAC enjoys to modify or

revoke its trademark license at any time defeats Cubaexport’s

constitutional claim, but I do not think it appropriate to reach

that question because I believe Cubaexport should prevail on its

statutory interpretation argument, and the case should be

remanded. 

The majority, apparently using the term “vested rights” to

mean something more than substantive rights, Maj. Op. at 8,

misapplies governing Supreme Court jurisprudence regarding

the interpretation of statutes – indeed does so in a fashion that

drives a large hole in the presumption against retroactivity. The

recent Supreme Court case upon which the court relies,

Fernandez-Vargas v. Gonzales, 548 U.S. 30 (2006), states that

“[s]tatutes are disfavored as retroactive when their application

‘would impair rights a party possessed when he acted, increase

a party’s liability for past conduct, or impose new duties with

respect to transactions already completed.’” 548 U.S. at 37

(quoting Landgraf, 511 U.S. at 280). To be sure, FernandezVargas cited an early case in which Justice Story referred to

“vested rights,” see id. (quoting Soc’y for the Propagation of the

2 See also Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208

(1988) (“Retroactivity is not favored in the law. Thus, congressional

enactments and administrative rules will not be construed to have

retroactive effect unless their language requires this result.”).

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 20 of 25
3

Gospel v. Wheeler, 22 F. Cas. 756, 767 (No. 13,156) (CCNH

1814)), but Fernandez-Vargas then equated “vested” with

“substantive” (as distinct from procedural), id. The Supreme

Court’s retroactivity jurisprudence consistently frames the

protected rights as “substantive.” See, e.g., Lindh v. Murphy,

521 U.S. 320, 326 (1997); Landgraf, 511 U.S. at 278. (In his

Landgraf concurrence, Justice Scalia made clear that the

majority’s use of the phrase “vested rights” meant only to

differentiate substantive rights from procedural ones. See

Landgraf, 511 U.S. at 290-91 (Scalia, J., concurring).) Indeed,

the other cases cited by the majority also use “vested” and

“substantive” interchangeably.3

 If the presumption against

retroactive legislation protected only substantive rights that are

somehow invulnerable – that could not be threatened by other

legal attacks – the presumption’s value would be degraded

substantially. 

There is no question that Cubaexport had a substantive

“right” to its trademark; otherwise, what did its trademark

mean? Whether OFAC could revoke that right – and under what

conditions4 – is quite beside the point. As I noted, the

government nowhere purported to exercise its revocation

authority in this case. (It may well be that an OFAC license

3

 The majority cites Celtronix Telemetry Inc. v. FCC, 272 F.3d

585 (D.C. Cir. 2001), for the proposition that a party does not have a

vested right in a licensing regime if the government retains the power

to alter the terms of existing licenses by rulemaking. Maj. Op. at 10

(citing Celtronix Telemetry, 272 F.3d at 589). But Celtronix’s holding 

is not so broad. There, we considered whether a party’s right to

request payment grace periods for a video and data service license

from the FCC was a vested right. Id. at 589. But as Celtronix makes

clear, the right in question was merely “procedural.” 

4

 Would not the APA’s arbitrary and capricious standard govern

OFAC’s authority?

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 21 of 25
4

revocation carries implications not apparent to us.) It is,

moreover, a patent violation of SEC v. Chenery Corp., 318 U.S.

80 (1943), for a reviewing federal court to uphold agency action

based on a legal theory – let alone a potential agency action –

that the agency did not initiate or embrace. That the government

contends that OFAC could exercise that power, as Chenery

explained, decidedly is not a relevant consideration. Chenery,

318 U.S. at 88. 

 In any event, as the majority concedes, Maj. Op. at 8 n.4,

quite apart from its “vested rights” approach to the presumption

against retroactivity, the presumption applies, as well, if a

statute would “impose new duties with respect to transactions

already completed.” Fernandez-Vargas, 548 U.S. at 37. As I

discuss below, OFAC, by interpreting section 211's

“transaction” to not include a renewal of a trademark – and

therefore to require Cubaexport to seek a new license for its

renewal – is certainly imposing a new duty if renewal rights are

automatic, and bound up with the initial registration of the

trademark. I think the majority errs in not reading Cubaexport

to assert that it did not complain that section 211 imposed any

new or increased liabilities or duties for past conduct. See Maj.

Op. at 8 n.4. Cubaexport broadly argued that section 211

“‘attaches new legal consequences to events completed before

its enactment.’” Appellant’s Opening Brief at 27 (quoting

Landgraf, 511 U.S. at 270).5

 

5

 Since the majority relies on a “vested rights” theory not

advanced by the government, its rather strained contention that

Cubaexport did not object to the new duty of renewal – which it did

– violates the “chuztpah” doctrine. See Harbor Ins. Co. v. Schnabel

Found. Co., 946 F.2d 930, 937 & n.5 (D.C. Cir. 1991); Nw. Airlines,

Inc. v. Air Line Pilots Ass'n, Int'l, 808 F.2d 76, 83 (D.C. Cir. 1987). 

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 22 of 25
5

Turning to Cubaexport’s argument that the government is

improperly applying section 211 retroactively, the obvious

initial inquiry is whether section 211 speaks prospectively only,

or both prospectively and retrospectively. I think section 211 is

more naturally read – even without the presumption – as

applying to the future only. It states that “[n]otwithstanding any

other provision of law, no transaction or payment shall be

authorized or approved pursuant to Section 515.527” (the

licensing regulations). Omnibus Consolidated and Emergency

Supplemental Appropriations Act of 1999, Pub. L. No. 105-277,

112 Stat. 2681 (1998), § 211 (emphasis added). OFAC

obviously realized this because it issued a regulation

implementing the statute, which changed “shall be authorized or

approved” to “is authorized or approved” (which the majority

ignores). 31 C.F.R. § 515.527(a)(2) (emphasis added). And the

district court also saw section 211 as speaking only

prospectively, but it concluded that although Cubaexport’s

registration of its trademark was unaffected, a renewal could be

stopped because it was a separate “new” transaction. See

Empresa Cubana Exportadora de Alimentos y Productos Varios

v. Dep’t of Treasury, 606 F. Supp. 2d 59, 81 (D.D.C. 2009). 

That is the government’s essential statutory argument before us

– not the “vested rights” theory advanced by the majority – that

renewal was a new transaction that OFAC had to authorize or

approve, and therefore section 211 applied to all trademark

renewals undertaken after its passage.

The key question, then, is the interpretation of the word

“transaction” in section 211. I read section 211 as certainly, at

least, suggesting that a “transaction” includes both the

registration, as well as necessary renewals, because renewal is

not separately mentioned, and therefore implicitly is coupled

with the initial license registration. Cubaexport drives that point

home by persuasively explaining that under our governing

trademark law, a holder’s right to a trademark, “once acquired,”

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 23 of 25
6

is “perpetual” unless abandoned. Ewing v. Standard Oil Co., 42

App. D.C. 321, 324 (1914); see also Qualitex Co. v. Jacobson

Prods. Co., Inc., 514 U.S. 159, 165 (1995). Renewal “in no

sense confers new rights,” and instead, “amounts only to a

record of existing rights.” Ewing, 42 App. D.C. at 324. The

government would have us ignore Ewing simply because it is an

old case – but that argument is silly. In any event, it seems clear

that the Patent and Trademark Office must renew a trademark

when requested, so long as the holder pays the usual fee and

submits an affidavit describing the mark’s use or explaining its

non-use. See 15 U.S.C. §§ 1058(b), 1059(a). The only purpose

of a renewal is to remove an abandoned trademark from the

register. See Ewing, 42 App. D.C. at 324; In re Bose Corp., 580

F.3d 1240, 1246 (Fed. Cir. 2009); Torres v. Cantine Torresella

S.r.l., 808 F.2d 46, 48 (Fed. Cir. 1986)). It does not add to,

subtract from, or alter a trademark holder’s substantive rights in

the trademark. The government does not dispute this

proposition. 

To be sure, the use of the additional word “payment” in

section 211 is anomalous. It is possible, although hardly

obvious, that by using the word “payment” Congress sought to

require a Cuban trademark holder to obtain a separate payment

license before it could renew its trademark. If we give

“payment” this separate meaning, it would render invalid section

515.527(a)(1)’s implicit authorization to pay renewal fees. And,

as a result, section 211 would have retroactive effect. But while

this reading is barely plausible, certainly section 211 does not

mandate it. At most, this plausible interpretation of “payment”

creates an ambiguity as to whether section 211 authorizes OFAC

to act retroactively.

The majority is not influenced by the Second Circuit’s

observation, in a related case, that “[s]ince section 211 does not

clearly indicate that it should be applied retroactively, the

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 24 of 25
7

traditional presumption against retroactivity would likely

apply.” Havana Club Holdings SA v. Galleon SA, 203 F.3d 116,

128-129 (2d Cir. 2000).6 The Second Circuit dutifully relied on

the Supreme Court’s opinion in Landgraf, the leading case

explaining that a statute is presumed to apply prospectively only,

in observing that section 211 should be construed as limited to

transactions occurring after the statute’s passage. I think we are

obliged to do so as well. Our inquiry should be at an end

because “the agency has misconceived the law,” and the case

should be remanded. Chenery Corp., 318 U.S. at 94. 

I respectfully dissent.

6

 The Second Circuit’s observation was dicta because the

provision at issue, not implicated in this case, spoke of the propriety

of prospective relief only. But its conclusion regarding section 211

nevertheless contradicts the majority’s opinion and supports my

position.

USCA Case #09-5196 Document #1300371 Filed: 03/29/2011 Page 25 of 25