D.C. Circuit Allows Chabad Case Against Russia to Go Forward
The D.C. Circuit has ruled that the Chabad case against Russia can go forward notwithstanding various FSIA, act of state, and forum non conveniens defenses raised by Russia. It is a very complicated case, but here are the essential facts and holding:
Agudas Chasidei Chabad of United States is a non-profit Jewish organization incorporated in New York. It serves as the policy-making and umbrella organization for Chabad-Lubavitch-generally known as “Chabad”-a worldwide Chasidic spiritual movement, philosophy, and organization founded in Russia in the late 18th century. (Chabad’s name is a Hebrew acronym standing for three kinds of intellectual faculties: Chachmah, Binah, and Da‘at, meaning wisdom, comprehension, and knowledge.) In every generation since the organization’s founding, it has been led by a Rebbe-a rabbi recognized by the community for exceptional spiritual qualities. Agudas Chasidei Chabad stakes claim to thousands of religious books, manuscripts, and documents (the “Collection”) that were assembled by the Rebbes over the course of Chabad’s history and comprise the textual basis for the group’s core teachings and traditions. The religious and historical importance of the Collection to Chabad, which is extensively reviewed in the district court opinion, can hardly be overstated. Agudas Chasidei Chabad says that the Collection was taken by the Soviet Union-or its successor, the Russian Federation-in violation of international law.
According to the plaintiff’s allegations …, Russia’s Bolshevik government seized one portion of the Collection (known as the “Library”) during the October Revolution of 1917, taking it from a private warehouse in Moscow, where the Fifth Rebbe had sent it for safekeeping as he fled the German forces invading Russia. Although the Soviet government initially acted with some hesitancy, by 1925 it appears to have finally rejected pleas for return of the Library by the Fifth Rebbe and the Sixth (who succeeded the Fifth in 1920). The regime stored the materials at its Lenin Library, which later became the Russian State Library (“RSL,” a term we use to include its predecessor).
After arresting the Sixth Rebbe for “counter revolutionary activities” (namely establishing Jewish schools), the Soviets beat him and sentenced him to death by firing squad, but then commuted the sentence to exile. The Sixth Rebbe resettled in Latvia in 1927 and became a citizen there, bringing with him another set of religious manuscripts and books known as the “Archive.” In 1933 he moved to Poland, bringing the Archive along. On September 1, 1939, Nazi German forces invaded Poland, forcing the Rebbe to flee yet again. Nazi forces seized the Archive and transferred it to a Gestapo-controlled castle at Wölfelsdorf, a village about fourteen miles south of Glatz (now Klodzko) in Lower Silesia. Soviet military forces commandeered the Archive in September 1945, calling its contents “trophy documents” and carrying them away to Moscow. The Archive is now held by the Russian State Military Archive….
With the assistance of the U.S. government, the Sixth Rebbe escaped Nazi Europe and came to New York, where Agudas Chasidei Chabad was incorporated in 1940. The plaintiff and its predecessor made various efforts to recover the Collection for nearly 70 years. It enjoyed brief successes regarding the Library in 1991-1992, amid a flurry of Soviet and then Russian judicial, executive, and legislative pronouncements, but various governmental actions ultimately thwarted the group’s efforts to secure possession of the Library, actions that it describes as a further expropriation.
To regain possession of both the Library and the Archive, the plaintiff brought suit against the Russian Federation as well as its Ministry of Culture and Mass Communication, the RSL, and the RSMA (all collectively referred to as “Russia” except as needed to distinguish among them). Russia moved to dismiss the claims on grounds of foreign sovereign immunity, forum non conveniens, and the act of state doctrine. Before the district court, Russia scored a partial victory; the court dismissed all claims as to the Library, finding for them no exception to Russia’s sovereign immunity, but it denied Russia’s motion as to the Archive. Both sides appeal.
We affirm the district court’s order in part and reverse it in part. First, on our reading of the expropriation exception of the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1605(a)(3), plaintiffs must demonstrate certain jurisdictional prerequisites by a preponderance of the evidence before the case goes forward, whereas they can satisfy others simply by presenting substantial and non-frivolous claims. On this reading, we hold that Agudas Chasidei Chabad satisfied the FSIA’s jurisdictional requirements as to both the Library and the Archive. Second, we conclude that the district court did not abuse its discretion in rejecting the application of forum non conveniens. Finally, we affirm the district court’s rejection of Russia’s motion to dismiss as to the Archive on act of state grounds, and we vacate its apparent ruling that the act of state doctrine operates as an alternative ground for dismissal of Chabad’s claims as to the Library.