Brazil's Odebrecht sues Florida over Cuba, Syria law

MIAMI Tue Jun 5, 2012 2:10pm EDT

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MIAMI (Reuters) - The U.S. subsidiary of Brazilian construction giant Odebrecht has filed a lawsuit challenging a recently signed Florida law barring local governments from hiring companies that do business in Cuba or Syria.

The lawsuit, filed on Monday in Miami federal court, claims the measure is "unconstitutional and unenforceable" and argues that the federal government, not states, has the authority to enact laws involving foreign affairs.

Signed by Governor Rick Scott last month, the law drew strong backing in the state's Republican-led legislature, particularly from Cuban-American politicians in Miami, who argued Florida tax dollars should not be used to support dictatorships.

But Scott later came under heavy criticism after acknowledging the law would likely require federal approval, and he vowed to defend it against any legal challenges.

Set to go into effect on July 1, the law prohibits state and local governments from awarding contracts of $1 million or more to any company that conducts business in Cuba or Syria. Both countries are designated by the United States as state sponsors of terrorism.

The law appeared to target Odebrecht USA, the South Florida-based subsidiary of the Brazilian conglomerate, which has another subsidiary involved in a major upgrade to Cuba's Port of Mariel near the capital, Havana.

Lane Wright, a Scott spokesman, declined to comment, saying the governor's office had not seen a copy of the lawsuit. Thomas Neal McAliley, a lawyer representing Odebrecht, did not immediately respond to a request for comment.

Odebrecht argues in the lawsuit that federal regulations "provide the federal Executive Branch with significant flexibility regarding the implementation and application of sanctions directed at Cuba, but do not authorize states to enforce their own sanctions."

The U.S. subsidiary also claims that it is "remote and distant from, and has no contact with, the corporate entity involved in the expansion of the Cuban Port of Mariel or any business operations in Cuba of any kind."

Odebrecht USA provides construction and engineering services, focusing largely on public infrastructure and transportation projects.

The company has been awarded 35 contracts with Florida state agencies and local governments since 1990 worth $3.9 billion, it said in the lawsuit. Among them was a project for a performing arts center in Miami.

It is currently bidding on a proposed $700 million hotel and office complex associated with the Miami airport.

(Additional reporting by Michael Peltier in Tallahassee; editing by M.D. Golan)

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