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Agudas Chasidei Chabad of United States v. Russian Federation

July 26, 2011

AGUDAS CHASIDEI CHABAD OF UNITED STATES PLAINTIFF,
v.
RUSSIAN FEDERATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Signed by Royce C. Lamberth, Chief Judge,

MEMORANDUM OPINION

I. INTRODUCTION

Plaintiff Agudas Chasidei Chabad of the United States is a New York-based, non-profit religious corporation holding a default judgment under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1330, 1602 et seq., against the Russian Federation, a foreign state, the Russian Ministry of Culture and Mass Communication (the "Ministry"), the Russian State Library ("RSL"), and the Russian State Military Archive ("RSMA"). The default judgment entitles plaintiff to a collection of religious books and artifacts concerning the cultural heritage of its fore bearers. These items fell into defendants' hands in the early 20th century, and Russia has, to date, declined to return them. Further complicating matters, upon learning of the default judgment after withdrawing from this litigation, Russia announced that it will refuse to loan cultural artifacts and art to institutions in the United States for fear that plaintiff will attach such items in satisfaction of the default judgment. Before the Court are plaintiff's motions seeking permission to pursue execution of its judgment and imposition of sanctions on all defendants for failure to return the collections. The Court will grant the former and deny the latter at this time.

II. PROCEDURAL HISTORY

The full background underlying this action is set forth in this Court's prior opinion in Agudas Chasidei Chabad v. Russian Fed'n, 466 F. Supp. 2d 6, 10--14 (D.D.C. 2006). In short, plaintiff is the incorporated entity and successor to a worldwide organization of Jewish religious communities having origins in Eastern Europe and Russia. Id. at 11. These groups were part of the Chasidim movement and adhere to Chasidism, which teaches of the presence of God in all things, even the most mundane. Id. During the tumultuous periods of World War I and World War II, two sets of historical and religious records were lost to the Chasidim movement. In particular, the "Library," which includes books and manuscripts maintained by the leaders of the movement, was taken by the Soviet Department of Scientific Libraries following the Bolshevik Revolution, while the "Archive," which consists of more than 25,000 pages of materials handwritten by the movement's leaders, was left in Poland in 1939 by the leader of the movement when fleeing to America and subsequently seized by the Soviet Army from defeated German troops. Id. at 12--13. Though remaining in Soviet possession through much of the 20th century, in the early 1990s a series of rulings by Soviet tribunals determined that the Library and Archive were not the national property of the Soviet Union and ordered that the collections be returned to plaintiff. Id. at 13. Before the return could be accomplished, however, the Soviet Union was dissolved and the new Russian Federation nullified the prior orders. Id. As a result, both the Library and the Archive remained in Russian possession.

Plaintiff turned to the U.S. courts in 2004, bringing suit against Russia and various state agencies in the Central District of California. The action is brought under the FSIA, which codifies principles of sovereign immunity by barring the assertion of jurisdiction over foreign states by any state or federal court in the United States. 28 U.S.C. § 1604. At the same time, the Act enumerates several specific exceptions to general principles of sovereign immunity, one of which is applicable here: "A foreign state shall not be immune . . . in any case in which rights in property taken in violation of international law are in issue." Id. § 1605(a)(3). Plaintiff's action was transferred to this Court in 2005, and shortly thereafter the Court granted in part and denied in part defendants' motion to dismiss on both jurisdiction and forum non conveniens grounds. Agudas Chasidei Chabad, 466 F. Supp. 2d at 31.*fn1 Following nearly four years of active litigation between the parties, all defendants withdrew from this matter, explaining that "[t]he Russian Federation views any continued defense before this Court and, indeed, any participation in this litigation as fundamentally incompatible with its rights as a sovereign nation." Statement of Defendants with Respect to Further Participation 2, Jun. 26, 2009 [71] ("Ds' Stmt"). A year later, the Court entered default judgment after finding that "[p]laintiff has met its burden of proving a prima facie case against defendants and has established its right to relief by evidence satisfactory to the Court." Agudas Chasidei Chabad v. Russian Fed'n, 729 F. Supp. 2d 141, 148 (D.D.C. 2010). The Court simultaneously ordered defendants "to surrender . . . the complete collection of religious books, manuscripts, documents and things that comprise the 'Library' and the 'Archive.'" Order & Judgment 2, July 30, 2010 [80].

Following entry of default judgment, plaintiff sent by FedEx copies of the opinion and final judgment, in both English and Russian, to the address and contact for each defendant that was provided by defendants' former counsel at the time Russia and the Russian entities withdrew from this case. Compare Certificate of Service, Oct. 20, 2010 [84-1], with Ex. A to Reply in Support of Motion to Withdraw, Aug. 6, 2009 [75]. Two months later, the Court received aletter from the U.S. Department of State indicating that the Russian Ministry of Foreign Affairs had returned these documents to the American Embassy in Moscow. Dec. 8th Letter, Dec. 10, 2010 [86]. In the intervening period, plaintiff had also sent copies and translations of these papers to the State Department for service through diplomatic channels. Notice of Service, Nov. 24, 2010 [85]. Not long thereafter, the Court received another letter indicating that service of these documents had been effected through diplomatic channels in late 2010. Affidavit of Service, Jan. 11, 2011 [87]. In January, the Court received yet another letter-this time from the Russian Ministry of Justice. Jan. 16th Letter, Jan. 21, 2011 [88]. A translation indicates that the Jan. 16th Letter declares as follows:

The Ministry of Justice of the Russian Federation hereby returns without judicial review all court documents issued by the Columbia District Court along with the petition filed by the Chassidic Community of the United States, seeking return of the Chassidic religious library. The documents are being returned due to nonexistence of an international treaty between the United States and Russia which would regulate legal provisions pertaining to civil, family and trade matters.

Certified Translation, Feb. 24, 2011 [90-1]. A few months after receipt of the Jan. 16th Letter, plaintiff filed motions requesting a determination that notice of the default judgment has been provided to defendants-allowing plaintiff to pursue execution of the default judgment-and seeking imposition of sanctions against defendants. Motion to Enforce Judgment and Permit Attachment, Apr. 4, 2011 [91] ("Enforcement Mtn."); Motion for Sanctions, Apr. 4, 2011 [92] ("Sanctions Mtn.").

Before the Court could address these motions, two events relevant to their disposition occurred. First, Russia announced that it was suspending exchanges of Russian art and cultural artifacts with American institutions, such as museums and universities, until resolution of this case, and directed its State-run museums to cancel scheduled loans to their American counterparts. Carol Vogel & Clifford J. Levy, Dispute Derails Art Loans from Russia, N.Y. Times, Feb. 2, 2011. According to one account, Russian officials are seeking legal assurances from the United States that any art and artifacts will be immune from attachment by plaintiff or others. Id. Second, in light of these developments, the United States appeared in this action and asked the Court for additional time to review plaintiff's motions before any ruling was issued. Notice of Potential Participation, Apr. 15, 2011 [93]. In an attempt to remedy any concerns, plaintiff sent a letter to the State Department in May promising that it "will not seek to enforce its default judgment by attaching or executing against any art or object of cultural significance loaned by the Russian Federation to American museums that is covered" by federal statutes. May 9th Letter, May 13, 2011 [94-1]. Plaintiff then submitted a copy of that letter to the Court, and separately declared that it "does not seek to disrupt in any manner the non-profit exchange of art and cultural objects between the Russian and American people." Statement of Plaintiff, May 13, 2011 [94]. A few days later, the United States requested another thirty days to respond in light of plaintiff's letter and statement. Second Notice of Potential Participation, May 16, 2011

[95]. Once again attempting to head-off any governmental involvement, plaintiff submitted a stipulation in which it agreed not to seek attachment of any objects from Russia declared by the State Department to be of "cultural significance" that were to be part of an upcoming exhibit. Stipulation Prohibiting Attachment of Certain Cultural Objects, May 18, 2011 [96].

Notwithstanding plaintiff's commendable attempts to minimize any interference with the exchange of art and cultural artifacts between the United States and Russia, the United States eventually submitted a Statement of Interest, June 15, 2011 [97] ("U.S. Stmt."). That statement explains that the United States government has an interest in ensuring proper enforcement of 22 U.S.C. § 2459(a), which immunizes from "any judicial process" art and other objects of "cultural significance" imported into the United States from any foreign country under an agreement between "cultural or educational institutions" in both countries. U.S. Stmt. at 3. The United States goes on to explain that, if issued, plaintiff's "proposed order would fail to alert other courts or enforcement authorities to the potential immunities applicable to Defendants' property," and thus could risk undermining the effectiveness of § 2459(a). Id. at 5. In response, plaintiff submitted a new proposed order that includes the following text:

(3) Plaintiff may enforce the judgment against defendants . . . through attachment and execution of defendants' property which falls within the immunity exceptions under 28 U.S.C. §§ 1610(a)(3), (b)(2) and is not protected by 22 U.S.C. § 2459. Any application by Plaintiff for a Writ of Attachment . . . shall identify the specific property that is the subject of application. . . . Pursuant to its agreement, Plaintiff shall not enforce the default judgment in this action by seeking to attach or execute against any art or object of cultural significance which has been granted protection under 22 U.S.C. § 2459.

Proposed Order 1--2, June 21, 2011 [98-1]. With the entirety of this background in mind, the Court now turns to the ...


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