A panel of skeptical federal appeals judges meeting in Miami Thursday sharply questioned a Florida law prohibiting the state and local governments from hiring companies with business ties to Cuba.
Several questions from the three-judge panel centered on whether the law would conflict with the federal government’s power to set foreign policy. Last year, U.S. District Judge K. Michael Moore blocked the law from taking effect, ruling in favor of Odebrecht USA, the Coral Gables-based subsidiary of the Brazilian engineering and construction conglomerate. The state appealed.
On Thursday, 11th U.S. Circuit Court of Appeals Judge Stanley Marcus asked Gregory Costas, an attorney for the Florida Department of Transportation, if the law would ban companies permitted under federal law to do some business with Cuba — such as providing agricultural equipment or medical supplies — from obtaining government contracts in Florida.
“That would be doing business with Cuba,” Costas responded.
“Isn’t that a square collision with the federal regime?” Marcus said.
Odebrecht sued FDOT over the law, approved by a near-unanimous majority of state legislators and signed by Republican Gov. Rick Scott. It would prohibit state and local government agencies from awarding contracts worth at least $1 million to U.S. firms whose foreign-owned parent companies or subsidiaries work in Cuba or Syria. An affiliate of Odebrecht USA’s parent company is heading a major expansion of the Cuban Port of Mariel.
Costas argued that Odebrecht USA had not proved it would be caused “irreparable harm” by the law, because the firm had not bid for an FDOT project in 15 years. But that view was too narrow, Marcus suggested, since the law affects all government agencies.
“The legislation goes farther than the [transportation] department,” he said.
The law would prevent Odebrecht USA, which does not work in Cuba or Syria, from bidding on future public contracts, essentially killing its business, said Jim Moye, an attorney for the firm.
“If you can’t bid work, you’re out of business,” said Moye, who was asked far fewer questions than Costas. “That’s their lifeblood.”
The law has caused political turmoil for the governor, who flew to Miami to sign it last year only to later issue a written statement suggesting the legislation was unconstitutional. That prompted swift backlash from Cuban Americans, prompting the governor to clarify that his administration would defend the law.
Scott stood by the law Thursday.
“Look at what Syria’s doing now,” he told a Miami Herald reporter after an interview with the newspaper’s editorial board. Scott pointed to recent reports of a chemical weapon being used in an attack in Syria’s ongoing civil war.
The political fallout has also extended to local governments, particularly in light of Odebrecht’s latest proposal to develop 33 acres around Miami International Airport as part of a $512 million project known as Airport City.
Several county commissioners have said they don’t want to give Odebrecht more business, after reluctantly awarding the firm the contract to rebuild wharves at PortMiami. Odebrecht also has done extensive business at the airport and the Adrienne Arsht Center for the Performing Arts.
Last year, 62 percent of Miami-Dade voters approved a nonbinding ballot question to ban the county from hiring companies that “actively” do business with state sponsors of terrorism. Since then, elected officials in several cities, including Miami Beach, Miami Lakes and Sweetwater, have approved identical measures opposing the hiring of Odebrecht for the Airport City project, citing the intent of the challenged law.
“It’s just about, I think, sensitivity to other people who suffered through atrocity,” said Miami Beach Commissioner Jonah Wolfson, who sponsored his city’s resolution. “They’re benefitting tremendously economically from a deal like this, and it just doesn’t seem right.”
The resolution has the support of Mauricio Claver-Carone, executive director of the U.S.-Cuba Democracy Political Action Committee in Washington that pushed for the state legislation.
“How is it that the number one business partner of the Cuban dictatorship is the number one recipient of projects and money from the Cuban-American community?” he said. “That is unheard of.”
The judges did not say when they would rule.
After Thursday’s hearing, Gilberto Neves, president and CEO of Odebrecht USA, appeared hopeful.
“I think we’ll be OK, but we’re anxious to see the final result,” he said.