By Louis M. Solomon
that Cultural Exchange Property Is Not Subject to Seizure under FSIA; and
Denies Sanctions without Prejudice
Agudas Chasidei Chabad of United
States v. Russian Federation, et al., 05-cv-1548 (RCL) (D.D.C. July 2011) [enhanced version available to lexis.com subscribers], is a decision by Chief Judge Lambert addressing several
noteworthy issues of international practice that we have posted on previously.
The decision also shows a U.S. federal court going to extraordinary lengths to
show deference and comity to a non-U.S. sovereign - who walked away from U.S.
litigation after being actively involved for four years - without abrogating
the rights of U.S. litigants protected under international and U.S. law.
The case involves Chabad's efforts
to recover from Russia a collection of religious books and artifacts concerning
the cultural heritage of Chasidism. The objects include a library and archives
of tens of thousands of pages. The objects came into Russia's hands
through the violation of international law, the Court had earlier ruled. The
former Soviet Union had officially determined that it had no right to the
property, but its orders requiring the return of the property to Chabad were
nullified by the new Russian Federation.
Defendants in the suit are the
Russian Federation, a "foreign state" under the FSIA, along with three Russian
instrumentalities. Defendants had withdrew from the case after "nearly four
years of active litigation" on the statement that, "The 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
Earlier in the litigation the Court
a motion for entry of a default judgment, having earlier made the laborious
and specific findings required by the FSIA in order to do so. See 441 F. Supp.
2d 6 (D.D.C. 2006) [enhanced
version ]. The current decision rules:
First, that Chabad had properly
served defendants with notice of the default, a requirement of the FSIA before
enforcement proceedings can commence and no mean task both given the
intricacies of the statute and the recalcitrance of the defendants.
Second, the Court found that due
notice had been given to defendants of the entry of the default judgment, which
is a separate and specific requirement of FSIA enforcement procedures. See our
posting on Rubin v. Islamic Republic of Iran, 637 F.3d 783, 800 (7th
Cir. 2011) [enhanced version / unenhanced version available from lexisONE Free Case Law] ("[E]ven when the foreign state fails to appear in the
execution proceeding, the court must determine that the property sought to be
attached is excepted from immunity under § 1610(a) or (b) before it can order
attachment or execution.").
Third, the Court addresses the
position taken the U.S., who expressed concern that Chabad would try to attach
Russian property in the U.S. as a result of cultural exchange. Such
seizures are is specifically exempt from attachment under 22 U.S.C. §
2459, which provides:
Whenever any work of art or other
object of cultural significance is imported into the United States from any
foreign country, pursuant to an agreement entered into between the foreign
owner or custodian thereof and the United States or one or more cultural or
educational institutions within the United States providing for the temporary
exhibition or display thereof within the United States at any cultural
exhibition, assembly, activity or festival . . . no court of the United States,
any State, the District of Columbia, or any territory or possession of the
United States may issue or enforce any judicial process . . . for the purpose
or having the effect of depriving such institution . . . of custody or control
of such object.
The Court determined that Chabad was
not seeking to attach any impermissible property but included in its order a
statement to that effect, without objection from Chabad. At the same time, the
Court did not address the question whether Chabad had any right to seize
specific property other than the property that is the subject of its judgment.
This is not a case where a money judgment was entered (as is the case, for example,
in the enforcement proceedings relating to Argentina, about which
we have posted previously). Rather, according to the Court itself, this was a
specific judgment for specific items of personalty (see the order granting the
default, referring to Chabad's claims as one seeking the return of property,
finding a property interest, and describing the relief sought in the case as
seeking only declaratory and injunctive relief. See also, for example,
New York's attachment statute, which requires that attachment be in aid of a
suit seeking money damages. CPLR 6201). Without a right to seize
substituted property, the entire issue of what Chabad could or couldn't seize
does not even seem to arise.
Finally, the Court determined that
sanctions were available in principle (consistent with the D.C. Circuit's treatment earlier this year) but were
not appropriate at this juncture in the case since defendants had not had
specific notice that sanctions would be imposed. The Court denied that part of
the motion without prejudice.
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