Agudas Chasidei Chabad of United States v. Russian Federation

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 11, 2024 Decided August 6, 2024

No. 23-7036

AGUDAS CHASIDEI CHABAD OF UNITED STATES, A

NON-PROFIT RELIGIOUS CORPORATION,

APPELLEE

v.

RUSSIAN FEDERATION, A FOREIGN STATE, ET AL.,

APPELLEES

TENEX-USA INCORPORATED,

APPELLANT

Consolidated with 23-7037

Appeals from the United States District Court

for the District of Columbia

(No. 1:05-cv-01548)

Carolyn B. Lamm and Nicolle Kownacki argued the cause

for appellant TENEX-USA, Inc. With them on the briefs were

Jacqueline L. Chung and Ena Cefo.

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Wesley W. Whitmyer, Jr. and David C. Tobin were on the

briefs for appellant State Development Corporation VEB.RF.

Robert P. Parker argued the cause for appellee. With him

on the brief were Steven M. Lieberman and Paul S. Macri.

Before: SRINIVASAN, Chief Judge, WILKINS and CHILDS,

Circuit Judges.

Opinion of the Court filed by Chief Judge SRINIVASAN.

SRINIVASAN, Chief Judge: For the third time, we consider

an appeal in this long-running lawsuit brought by Agudas

Chasidei Chabad of United States to reclaim religious property

unlawfully expropriated by the Russian state. Years ago,

Chabad obtained a default judgment against the Russian

Federation and several of its agencies along with an order

directing them to return the expropriated property. The

defendants ignored that order, so the district court imposed

monetary sanctions against them, payable to Chabad. The

sanctions have now accrued to over $175 million and have been

made enforceable through interim judgments.

This appeal arises out of Chabad’s attempt to collect on

those sanctions judgments by attaching the property of three

companies it contends the Russian Federation owns and

controls. We hold that Chabad may not do so. As a foreign

state, the Russian Federation has sovereign immunity from

civil suits unless its immunity has been abrogated by the

Foreign Sovereign Immunities Act. The district court believed

that it had jurisdiction over the Russian Federation pursuant to

that Act’s “expropriation exception” to immunity. Our

precedents, however, establish that the expropriation exception

is inapplicable in the circumstances of this case. The district

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court thus does not have—and has never had—jurisdiction over

Chabad’s claims against the Russian Federation.

Because the district court entered the default judgment and

sanctions judgments against the Russian Federation in excess

of its jurisdiction, those judgments are void as against the

Federation. And without the judgments against the Federation,

there is no predicate for Chabad to attach the property of

companies the Federation allegedly owns and controls. We

vacate the district court’s decision concluding otherwise.

I.

A.

Agudas Chasidei Chabad of United States (Chabad) is a

religious movement of Russian origin dating back to the 1700s.

Over its first century and a half, Chabad accumulated a library

of more than 12,000 volumes containing its history and central

teachings (the Library). It also compiled an archive of the

writings of its spiritual leaders, or Rebbes, documents it

considers sacred (the Archive). Collectively, the Library and

the Archive are known as “the Collection.” As our first

decision in this case recognized, “[t]he religious and historical

importance of the Collection to Chabad . . . can hardly be

overstated.” Agudas Chasidei Chabad of U.S. v. Russian Fed’n

(Chabad I), 528 F.3d 934, 938 (D.C. Cir. 2008).

During the twentieth century, the Soviet Union took both

pieces of the Collection from Chabad—the Library in the

1920s and the Archive after the end of World War II. Since

their expropriation, the Library and Archive have resided in

Russia in the custody of government agencies now called the

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Russian State Library (RSL) and the Russian State Military

Archive (RSMA).

B.

Chabad filed this lawsuit in 2004, naming as defendants

the Russian Federation, the RSL, the RSMA, and the Russian

Ministry of Culture and Mass Communications. Chabad

sought, among other relief, an order directing the Collection’s

return.

As a basis for jurisdiction, Chabad invoked the Foreign

Sovereign Immunities Act (FSIA), 28 U.S.C. §§ 1330, 1602 et

seq. The FSIA affords a blanket grant of immunity to foreign

states (and their agencies and instrumentalities) from the civil

jurisdiction of American courts, subject to certain exceptions.

Id. §§ 1604–1611. Chabad relied on the FSIA’s so-called

“expropriation exception,” which allows courts to hear certain

claims against foreign states involving “property taken in

violation of international law.” Id. § 1605(a)(3).

The case first reached our court after the district court

granted in part the defendants’ motion to dismiss. The district

court held that, under the FSIA’s expropriation exception, it

had jurisdiction over Chabad’s claims against the RSMA but

not over its claims against the RSL. Agudas Chasidei Chabad

of U.S. v. Russian Fed’n, 466 F. Supp. 2d 6, 19–20, 31 (D.D.C.

2006). We affirmed in part and reversed in part, concluding

that the district court had jurisdiction over both. Chabad I, 528

F.3d at 939, 955.

But neither the district court nor our court examined

whether there was jurisdiction over Chabad’s claims against

the Russian Federation itself or whether the Federation instead

was immune from suit. Although our opinion remarked that

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we “reverse [the district court’s] finding of Russia’s

immunity,” just what precisely we meant by that statement vis-

à-vis the Russian Federation is unclear, since we at times in the

opinion referred to all the defendants collectively as “Russia”

and conducted no analysis specific to the Russian Federation.

Id. at 955 (emphasis added); see generally De Csepel v.

Republic of Hungary, 859 F.3d 1094, 1105–06 (D.C. Cir.

2017).

The upshot of Chabad I was that all the defendants,

including the Russian Federation, remained in the case. In the

wake of our decision, however, the defendants withdrew from

the litigation. The Russian Federation, speaking on behalf of

itself and its agencies, asserted its belief that “a Court in the

United States does not have the authority to adjudicate rights

in property that in most cases always has been located in the

Russian Federation.” Statement with Respect to Further

Participation at 1 (June 26, 2009), J.A. 92. The Federation thus

concluded that further participation in the case would be

inconsistent with its “sovereignty.” Id. at 2, J.A. 93.

Approximately a year later, the district court granted

Chabad a default judgment against all defendants and ordered

them to surrender the Collection. After the defendants failed

to comply, the court imposed contempt sanctions, requiring the

defendants to pay Chabad $50,000 per day until they returned

the Collection. The defendants, though, neither paid the

sanctions nor returned the Collection. In the ensuing years, the

court entered interim judgments of accrued sanctions, which

now total more than $175 million.

C.

Unable to execute directly against the assets of the absent

defendants to satisfy the accumulating sanctions judgments,

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Chabad looked elsewhere. It sought, in particular, to collect

from entities in the United States with connections to the

Russian state. That effort eventually led Chabad to Tenex-

USA, a third-tier subsidiary of the Russian State Atomic

Energy Corporation, and State Development Corporation

VEB.RF (VEB), a Russian state development bank. See

Agudas Chasidei Chabad of U.S. v. Russian Fed’n (Chabad II),

19 F.4th 472, 474–75 (D.C. Cir. 2021).

Our second decision in this case, Chabad II, followed

Chabad’s efforts to subpoena information from Tenex-USA

and VEB about their assets and ownership. Id. As relevant

here, Tenex-USA responded to the subpoena by seeking partial

vacatur of the default judgment and sanctions judgments

pursuant to Federal Rule of Civil Procedure 60(b). Id. Tenex-

USA argued that the district court lacked jurisdiction over

Chabad’s claims against the Russian Federation under the

FSIA’s expropriation exception. Id. at 475. And Tenex-USA

maintained that, absent jurisdiction as to the Russian

Federation, there was no basis for Chabad to seek attachment

of Tenex-USA’s assets based on its alleged ties to the

Federation. Id.

We disposed of Chabad II without reaching that

jurisdictional question. We held that, regardless of the district

court’s jurisdiction over the Russian Federation, Tenex-USA

could not invoke Rule 60(b) to void the judgments against the

Russian Federation. Id. at 477. That rule allows only “a party

or its legal representative” to seek relief from judgment. Fed.

R. Civ. P. 60(b). And Tenex-USA was neither a party to the

judgments—the parties instead were the Russian Federation

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and its agencies—nor any party’s legal representative. Chabad

II, 19 F.4th at 477.

The case thus returned to the district court. Chabad then

moved to attach the U.S. property of Tenex-USA, its parent

company Tenex Joint-Stock Company (Tenex JSC), and VEB,

and to execute on that property to satisfy the sanctions

judgments it held against the Russian Federation. Chabad

argued that all three companies were alter egos of the Russian

Federation and that their property should be considered

Russian Federation property for purposes of enforcing the

judgments.

The district court denied Chabad’s motion without

prejudice. Agudas Chasidei Chabad of U.S. v. Russian Fed’n,

659 F. Supp. 3d 1, 3 (D.D.C. 2023). The court first held that

Chabad had satisfied the FSIA’s expropriation exception as to

the Russian Federation, so the Federation lacked immunity

with respect to the judgments entered against it. Id. at 7–10.

The court next concluded that, for the most part, Chabad had

satisfied a separate FSIA exception to the immunity from

attachment that the FSIA otherwise confers on foreign state

property. Id. at 10–11.

While the court ruled in Chabad’s favor in those respects,

it further determined that Chabad had not fulfilled the FSIA’s

requirement to provide notice of a default judgment to a

defendant before attaching its assets to satisfy the judgment.

Id. at 11–15 (citing 28 U.S.C. § 1610(c)). Although Chabad

had served the default judgment on the Russian Federation, it

had not served the sanctions judgments. Id. at 12–15. The

court therefore denied Chabad’s motion without prejudice,

directing Chabad to serve the sanctions judgments on the

Russian Federation and then file a renewed attachment motion.

Id. at 15. Because the court rested its decision on lack of notice,

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it did not resolve whether the property of Tenex JSC, Tenex-

USA, or VEB is in fact property of the Russian Federation to

which Chabad has a legitimate claim. Id.

VEB and Tenex-USA now appeal. They argue, among

other things, that the district court erred in asserting jurisdiction

over Chabad’s claims against the Russian Federation under the

FSIA’s expropriation exception. (Because Tenex-USA

purports to speak only for itself, not Tenex JSC, we refer

almost entirely to Tenex-USA throughout the remainder of the

analysis. And because VEB raises no arguments of its own and

merely incorporates those of Tenex-USA, we generally do not

refer separately to VEB, although most of what we say about

Tenex-USA applies to VEB too.)

II.

We begin by confirming our jurisdiction over this appeal.

Chabad raises four jurisdictional objections, none of which has

merit.

First, Chabad contends that Tenex-USA lacks standing to

appeal a decision in its favor—viz., the district court’s denial

of Chabad’s attachment motion. Chabad is correct that, in

general, “a party cannot appeal from a favorable judgment.”

15A Charles A. Wright & Arthur R. Miller, Federal Practice

and Procedure § 3902 (3d ed. 2023); see also California v.

Rooney, 483 U.S. 307, 311 (1987) (per curiam). The district

court, though, did not deny Chabad’s attachment motion

outright; instead, it denied the motion without prejudice. And

a party is “within its rights to appeal a dismissal without

prejudice on the grounds that it wants one with prejudice.” El

Paso Nat. Gas Co. v. United States, 750 F.3d 863, 885 (D.C.

Cir. 2014) (citation and internal quotation marks omitted).

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The reason is that an order dismissing a case (or, as here,

denying an attachment motion) without prejudice “subject[s]

the defendant to the risk . . . of further litigation.” Disher v.

Info. Res., Inc., 873 F.2d 136, 138 (7th Cir. 1989). That is the

case here. The district court’s order expressly contemplates

that Chabad will “file its motion again” and “have the

opportunity and authority to collect upon a renewed motion.”

Agudas Chasidei Chabad of U.S., 659 F. Supp. 3d at 15. But

if Tenex-USA had gotten the ruling it wanted—a denial of

Chabad’s motion with prejudice—further proceedings would

be foreclosed, and Tenex-USA would be out of the case.

Tenex-USA may take this appeal in an effort to achieve that

more favorable outcome.

Second and similarly, Chabad argues that Tenex-USA

seeks to appeal the district court’s reasoning, rather than its

judgment, contrary to the basic principle that a party may only

appeal “judgments, not opinions.” United States v. Simpson,

430 F.3d 1177, 1184 (D.C. Cir. 2005) (citation and internal

quotation marks omitted). But Tenex-USA in fact asks us to

review a judgment—or, more accurately, an order—not merely

an opinion. Tenex-USA seeks review of the portion of the

district court’s order that denies Chabad’s motion without

prejudice rather than with prejudice. And because we may

review an order to that effect, we also may review the reasons

the court denied the order without prejudice rather than with

prejudice. See El Paso Nat. Gas, 750 F.3d at 885.

Third, Chabad maintains that we already determined in

Chabad II that Tenex-USA lacks standing to raise the issue of

the Russian Federation’s immunity. Chabad misunderstands

Chabad II’s holding. Chabad II, as noted, held that Tenex-

USA could not attack the judgments in this case through a Rule

60(b) motion because Tenex-USA was not “a party or its legal

representative” in the litigation resulting in those judgments.

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19 F.4th at 477 (quoting Fed. R. Civ. P. 60(b)). But Chabad II

did not foreclose the possibility of Tenex-USA ever raising a

sovereign-immunity argument.

In fact, the court specifically recognized that VEB—

identically situated to Tenex-USA—could have raised such an

argument in an appeal of the denial of its motion to quash

Chabad’s subpoena. Id. at 476. And rightly so: a nonparty

may challenge an order on sovereign-immunity grounds if the

nonparty “has an interest that is affected” by the order—as long

as it does so through an appropriate procedural vehicle.

Aurelius Cap. Partners v. Republic of Argentina, 584 F.3d 120,

127–28 (2d Cir. 2009); see Pinson v. Samuels, 761 F.3d 1, 7

(D.C. Cir. 2014); Broidy Cap. Mgmt. LLC v. Muzin, 61 F.4th

984, 991 (D.C. Cir. 2023). The district court’s order plainly

affects Tenex-USA’s interest in its United States property. So

even if Tenex-USA could not protect that interest through a

Rule 60(b) motion, it can do so in this appeal.

Finally, Chabad submits that the denial without prejudice

of its attachment motion cannot be appealed until the district

court’s proceedings have come to an end. It is true that our

jurisdiction ordinarily is limited to appeals from “final

decisions of the district courts” that end the litigation on the

merits. 28 U.S.C. § 1291. But under the collateral order

doctrine, there is a “‘small class’ of collateral rulings that,

although they do not end the litigation, are appropriately

deemed ‘final’” and immediately appealable. Mohawk Indus.,

Inc. v. Carpenter, 558 U.S. 100, 106 (2009) (quoting Cohen v.

Beneficial Indus. Loan Corp., 337 U.S. 541, 545–46 (1949)).

The district court’s ruling that it has jurisdiction over the

Russian Federation under the FSIA’s expropriation exception

meets the three conditions that render an interlocutory decision

an immediately appealable collateral order. See Johnson v.

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Jones, 515 U.S. 304, 310–11 (1995). First, the court

conclusively decided that it has jurisdiction. See Agudas

Chasidei Chabad of U.S., 659 F. Supp. 3d at 10. Second, the

issue of a court’s jurisdiction over claims against a foreign state

is important and separate from the ultimate merits question in

the ongoing collection proceedings: whether Tenex-USA’s

property is in fact attachable. See Kilburn v. Socialist People’s

Libyan Arab Jamahiriya, 376 F.3d 1123, 1126 (D.C. Cir.

2004). And third, the denial of sovereign immunity is

“effectively unreviewable on appeal from a final judgment.”

Id. (citation and internal quotation marks omitted); see EM Ltd.

v. Republic of Argentina, 695 F.3d 201, 205 (2d Cir. 2012)

(explaining that “[i]n post-judgment litigation,” the relevant

final judgment is the “judgment that concludes the collection

proceedings”). “[S]overeign immunity,” we have explained,

“is an immunity from trial and the attendant burdens of

litigation, and not just a defense to liability on the merits.”

Kilburn, 376 F.3d at 1126 (citation and internal quotation

marks omitted); see also Foremost-McKesson, Inc. v. Islamic

Republic of Iran, 905 F.2d 438, 443 (D.C. Cir. 1990).

Because our conclusion as to the Russian Federation’s

immunity suffices to resolve this appeal, and because a

particular ruling in an order may be immediately appealable

even if the order in its entirety is not, see Oglala Sioux Tribe v.

U.S. Nuclear Regul. Comm’n, 896 F.3d 520, 527–28 (D.C. Cir.

2018), we need not consider whether we have jurisdiction at

this time to review other rulings in the district court’s order.

III.

Tenex-USA’s primary submission is that the district court

lacks—and has always lacked—jurisdiction over Chabad’s

claims against the Russian Federation. Accordingly, Tenex-

USA says, the default judgment and sanctions judgments the

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court entered against the Russian Federation are void. And as

a result, Chabad is without a legal predicate to attach Tenex-

USA’s property in satisfaction of those judgments, even

assuming that property is Russian Federation property in the

relevant sense (which Tenex-USA vigorously denies).

We agree with Tenex-USA’s argument: under our

precedents, the FSIA’s expropriation exception does not

abrogate the Russian Federation’s sovereign immunity in the

circumstances of this case. And we reject Chabad’s contention

that, even if the district court lacks jurisdiction over its claims

against the Russian Federation, the principle of jurisdictional

finality precludes us from giving effect to that conclusion at

this stage of the proceedings.

A.

1.

The FSIA establishes that “a foreign state shall be immune

from the jurisdiction of the courts of the United States and of

the States” unless an exception to immunity applies. 28 U.S.C.

§ 1604. The sole exception in play in this case is the

“expropriation exception.” That exception divests foreign

sovereign immunity “in any case”

[1] in which rights in property taken in

violation of international law are in issue

and [2A] that property or any property

exchanged for such property is present in

the United States in connection with a

commercial activity carried on in the

United States by the foreign state; or [2B]

that property or any property exchanged

for such property is owned or operated by

an agency or instrumentality of the

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foreign state and that agency or

instrumentality is engaged in a

commercial activity in the United

States . . . .

Id. § 1605(a)(3) (bracketed labels added). A district court thus

has jurisdiction over claims against a foreign state or its

agencies and instrumentalities under the expropriation

exception if rights in property are at issue, that property has

been taken in violation of international law, and the appropriate

“commercial-activity nexus requirement” is satisfied. De

Csepel, 859 F.3d at 1104.

In Simon v. Republic of Hungary, 812 F.3d 127, 146 (D.C.

Cir. 2016), rev’d in part on other grounds sub nom. Fed.

Republic of Germany v. Philipp, 592 U.S. 169 (2021), we held

that “[t]he nexus requirement differs somewhat for claims

against the foreign state . . . as compared with claims against

an agency or instrumentality of the foreign state.” Simon

understood clause 2A to be the only path to jurisdiction over

claims against a foreign state itself: the property that is the

subject of the claims (or property exchanged for it) must be

“present in the United States in connection with a commercial

activity” that the foreign state “carrie[s] on” in the United

States. Id. (quoting 28 U.S.C. § 1605(a)(3)). And Simon

correspondingly read clause 2B to be the only basis for

jurisdiction over claims against an agency or instrumentality of

a foreign state: the property need not be present in the United

States, but it must be “owned or operated by an agency or

instrumentality of the foreign state” that is “engaged in a

commercial activity in the United States.” Id.

Simon was decided years after Chabad I, and Simon did

not discuss the fact that Chabad I apparently kept the Russian

Federation in this case. See pp. 4–5, supra. But under Simon’s

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interpretation of the expropriation exception, the Russian

Federation ought to have been dismissed: a claim against a

foreign state must fit within clause 2A, which, as noted,

requires the expropriated property in issue to be present in the

United States. Yet it is undisputed that the expropriated

property giving rise to this suit—the Collection—is not present

in the United States. Nonetheless, Chabad I said (without

elaboration) that it was overturning the district court’s “finding

of Russia’s immunity.” 528 F.3d at 955.

Although Simon did not address that seeming tension with

Chabad I, our court directly confronted it the following year in

De Csepel v. Republic of Hungary. De Csepel, like this case

and Simon, was an expropriation-exception suit against a

foreign sovereign (Hungary) concerning property located

outside the United States. 859 F.3d at 1104–05. The plaintiffs

argued that, under Chabad I, jurisdiction existed over Hungary

even though the expropriated property was not in the United

States. Id. at 1105. Hungary responded by relying on Simon,

under which jurisdiction over Hungary could arise only

pursuant to clause 2A, which is inapplicable when the property

is outside the United States. Id. at 1104.

We sided with Hungary, holding that Simon’s

interpretation of the expropriation exception governed. We

reasoned that Chabad I had not in fact “held that a foreign state

loses immunity if the second nexus requirement [clause 2B] is

met.” Id. at 1105 (first alteration in original). “The issue of the

Russian state’s immunity,” we explained, “was completely

unaddressed by the district court and neither raised nor briefed

on appeal” in Chabad I. Id. What is more, the Chabad I court

“did not explain why it kept the Russian Federation in the

case.” Id. It instead “reversed the district court with no

explanation at all,” id. at 1106, stating in a single conclusory

sentence that it “reverse[d] [the district court’s] finding of

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Russia’s immunity,” id. at 1105 (quoting Chabad I, 528 F.3d

at 955) (second alteration in original). Such a “cursory and

unexamined statement[] of jurisdiction,” we determined, had

“no precedential effect.” Id. at 1105–06 (citation and internal

quotation marks omitted). Simon, by contrast, had “expressly

considered and decided the question of foreign state immunity

under the expropriation exception.” Id.

We have applied the expropriation exception on more than

one occasion since De Csepel. In each instance, we considered

ourselves bound by Simon’s construction of § 1605(a)(3). See

Schubarth v. Fed. Republic of Germany, 891 F.3d 392, 399–

401 (D.C. Cir. 2018); Philipp v. Fed. Republic of Germany, 894

F.3d 406, 414 (D.C. Cir. 2018), rev’d in part on other grounds,

592 U.S. 169 (2021). Accordingly, De Csepel and our

subsequent decisions have consistently held that “a foreign

state is immune to claims for the expropriation of property not

present in the United States.” Schubarth, 891 F.3d at 394–95.

2.

Under Simon and De Csepel, the expropriation exception

cannot provide a basis for jurisdiction over Chabad’s claims

against the Russian Federation in this case. The expropriated

property those claims involve, the Collection, sits in Russia,

not the United States. And as we have now held several times,

expropriated property must be located in the United States for

jurisdiction to lie under the expropriation exception over claims

against a foreign state. Simon, 812 F.3d at 146. Even if

Chabad I could be read to have reached a different conclusion,

our decision in De Csepel resolved that Simon, not Chabad I,

controls.

In nonetheless concluding that it had jurisdiction over

Chabad’s claims against the Russian Federation, the district

court relied on Chabad I. The court read Chabad I to have

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allowed for jurisdiction over a foreign state under either clause

2A or clause 2B of the expropriation exception. Agudas

Chasidei Chabad of U.S., 659 F. Supp. 3d at 8. And it thought

that our later decisions—including Simon and De Csepel—did

not mandate a different result, because they departed from

Chabad I, an earlier and, in the court’s view, binding precedent.

Id. at 9. As the district court saw things, Chabad I established

the law of the circuit, and it remains the law of the circuit

because we have not overruled it en banc. Id. at 9–10.

We appreciate that, at one time, there might have been

uncertainty about whether Chabad I or Simon supplied this

circuit’s law on the proper interpretation of the expropriation

exception. But our decision in De Csepel definitively settled

the matter in favor of Simon. We extensively analyzed the

issue and squarely held that Chabad I did not create “[b]inding

circuit law” because it never held “that a foreign state loses

immunity if the second nexus requirement is met.” De Csepel,

859 F.3d at 1105 (alteration in original) (citation and internal

quotation marks omitted). Chabad I’s passing remark about

“Russia’s immunity,” De Csepel emphasized, had “no

precedential effect.” Id. at 1105–06 (citation and internal

quotation marks omitted).

De Csepel’s authoritative reading of Chabad I is now itself

binding circuit law, which the district court (and our court)

must follow unless we reconsider the issue en banc. Lest any

doubt remain about the law in this circuit, we reiterate once

again: there is no jurisdiction over a claim against a foreign

state under the FSIA’s expropriation exception unless the

expropriated property is located in the United States. De

Csepel forecloses reliance on Chabad I to conclude otherwise.

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B.

Chabad advances two reasons why we nevertheless should

not apply Simon in this case. The first is readily dismissed:

Chabad asks us to reconsider Simon’s holding, but we are

bound by that holding after De Csepel, no less than were the

panels in Schubarth and Philipp. And in any event, for the

reasons explained in De Csepel, we would adopt Simon’s

construction of the expropriation exception even if we were

free to interpret the FSIA on a blank slate. De Csepel, 859 F.3d

at 1107–08.

Chabad also argues that, even if Simon is the law today,

the principle of jurisdictional finality precludes us from

revisiting the district court’s jurisdiction over its claims against

the Russian Federation at this stage of the proceedings. We

conclude, however, that jurisdictional finality poses no barrier

to our applying our governing precedent in this case.

Under the doctrine of jurisdictional finality, “principles of

res judicata apply to jurisdictional determinations—both

subject matter and personal.” Ins. Corp. of Ireland, Ltd. v.

Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 n.9

(1982). The usual rule is that “[a] party that has had an

opportunity to litigate the question of . . . jurisdiction” may not

“reopen that question in a collateral attack upon an adverse

judgment.” Id.

To support application of that principle here, Chabad relies

on Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d

1543 (D.C. Cir. 1987), in which we described two options

available to a defendant who questions the jurisdictional basis

of a lawsuit against it. First, such a defendant “may appear,

raise the jurisdictional objection, and ultimately pursue it on

direct appeal. If he so elects, he may not renew the

jurisdictional objection in a collateral attack.” Id. at 1547.

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“Alternatively, the defendant may refrain from appearing,

thereby exposing himself to the risk of a default judgment.

When enforcement of the default judgment is attempted,

however, he may assert his jurisdictional objection.” Id.

According to Chabad, the Russian Federation took option

one: it initially appeared in the case, contested jurisdiction,

appealed, and lost (in Chabad I). That result, Chabad reasons,

cannot now be challenged in enforcement proceedings

following the default judgment, because a party that appears

and challenges jurisdiction cannot “renew the jurisdictional

objection in a collateral attack.” Practical Concepts, 811 F.2d

at 1547.

The Practical Concepts framework does not control in this

case. To begin with, the defendant in Practical Concepts had

not appeared in the case prior to the entry of a default judgment

against it, so only the second path we described was relevant to

our disposition. Id. at 1545. Nor did we purport to establish

any ironclad rule in Practical Concepts, stating only that

defendants “generally” face the choice we described. Id. at

1547. Our use of indefinite language was appropriate, given

that equitable considerations and exceptions have always

informed the application of res judicata. See Canonsburg Gen.

Hosp. v. Burwell, 807 F.3d 295, 306 (D.C. Cir. 2015). The

Practical Concepts passage on which Chabad relies thus

provides “generally” applicable guidance, but it does not

delimit the full range of permissible outcomes. And several

features of the present case persuade us that applying

jurisdictional finality is unwarranted.

First, the party now contesting jurisdiction, Tenex-USA,

was not a defendant in the case when it was filed or when the

district court entered the default judgment. See Chabad II, 19

F.4th at 477. Indeed, Tenex-USA had no reason even to be

19

aware of the litigation until it received a subpoena from Chabad

in 2019, in the course of post-judgment enforcement

proceedings. So we see little reason to deny Tenex-USA the

benefit of FSIA law that was clearly established in our circuit

by the time Tenex-USA first became involved in the case.

After all, the reasoning of Practical Concepts by its own terms

applies in situations in which the party contesting jurisdiction

post-judgment was “[a] defendant who kn[ew] of” the initial

action against it. 811 F.2d at 1547. So, while a “party that has

had an opportunity to litigate the question of subject-matter

jurisdiction may not . . . reopen that question in a collateral

attack upon an adverse judgment,” Ins. Corp. of Ireland, 456

U.S. at 702 n.9, Tenex-USA is not such a party. Rather, Tenex-

USA contested jurisdiction at the first opportunity available to

it.

We recognize that it remains unresolved whether,

notwithstanding its “separate juridical status,” First Nat’l City

Bank v. Banco Para el Comercio Exterior de Cuba, 462 U.S.

611, 621 (1983), Tenex-USA is in fact an alter ego of the

Russian Federation, as Chabad alleges. But even if Chabad is

correct on that score, it would not change the jurisdictional

finality analysis. The Russian Federation is an indirect

shareholder of Tenex-USA. And in general, a judgment

against the shareholder of a corporation binds the corporation

“only if” the corporation has “notice” of the “action resulting

in the judgment” and a “fair opportunity to defend” in that

action. Restatement (Second) of Judgments § 59(5) (Am. L.

Inst. 1982); 18A Wright & Miller, supra, § 4460. There is no

suggestion here that Tenex-USA was on notice of this suit or

had an opportunity to defend itself prior to the default

judgment. What is more, the Russian Federation’s actions—

with respect to the Collection and in this litigation—are

entirely disconnected from its status as an indirect Tenex-USA

owner. So it is immaterial to the jurisdictional-finality inquiry

20

whether Tenex-USA’s corporate separateness from the

Russian Federation should be disregarded for attachment

purposes.

In addition, the issue of the Russian Federation’s immunity

was never adjudicated before entry of the default judgment that

now provides the predicate for attachment proceedings against

Tenex-USA. As we explained in De Csepel, the Russian

Federation’s immunity “was completely unaddressed by the

district court” in the proceedings that led to Chabad I and

“neither raised nor briefed on appeal.” 859 F.3d at 1105. The

issue then received at best a “drive-by” ruling in our court that

did not amount to a precedential holding. Id. at 1106 (quoting

Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 91 (1998)).

And while the district court’s later opinion accompanying the

default judgment contained a jurisdictional analysis, that

analysis was limited to the RSL and RSMA and said nothing

specifically about the Russian Federation. See Agudas

Chasidei Chabad of U.S. v. Russian Fed’n, 729 F. Supp. 2d

141, 146–48 (D.D.C. 2010). Given that procedural backdrop

and the other considerations weighing against the application

of jurisdictional finality, the Russian Federation’s immunity

need not be forever insulated from examination.

Settling a jurisdictional question correctly—rather than

simply settling it—is also particularly important when the

question concerns foreign sovereign immunity. “Actions

against foreign sovereigns in our courts raise sensitive issues

concerning the foreign relations of the United States,”

Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 493

(1983), and can have serious “diplomatic implications,”

Republic of Sudan v. Harrison, 587 U.S. 1, 19 (2019). This

case is illustrative: the United States informed the district court

several times that the imposition of contempt sanctions on the

Russian Federation “risk[ed] damage to significant foreign

21

policy interests.” Statement of Interest of the United States at

10 (Aug. 29, 2012), J.A. 145; Statement of Interest of the

United States at 6–7 (Feb. 21, 2014), J.A. 166–67.

Mindful of such concerns, the Supreme Court has

explained that “the rule of law demands adherence to [the

FSIA’s] strict requirements.” See Harrison, 587 U.S. at 19.

And we have likewise cautioned that “[i]ntolerant adherence to

default judgments against foreign states could adversely affect

this nation’s relations with other nations and undermine the

State Department’s continuing efforts to encourage foreign

sovereigns generally to resolve disputes within the United

States’ legal framework.” FG Hemisphere Assocs., LLC v.

Democratic Republic of Congo, 447 F.3d 835, 838–39 (D.C.

Cir. 2006) (quoting Practical Concepts, 811 F.2d at 1551 n.19).

Those considerations do not give foreign states a free pass with

respect to jurisdictional finality. But they do counsel in favor

of rectifying an evident jurisdictional problem in the

circumstances of this case.

Finally, there is no indication of gamesmanship on the part

of the Russian Federation or Tenex-USA. It would be a

different case if, for instance, the Russian Federation had

appeared and contested jurisdiction, determined that its

arguments were unlikely to succeed, withdrawn and defaulted,

and then strategically reappeared in an attempt to challenge

jurisdiction a second time. Or one could imagine a scenario in

which a foreign state relied on its agencies or instrumentalities

for the specific purpose of raising or re-raising jurisdictional

arguments that otherwise would be precluded. In such

situations, applying jurisdictional finality would best promote

the values preclusion serves—judicial economy and the

22

protection of opposing litigants. See Parklane Hosiery Co. v.

Shore, 439 U.S. 322, 326 (1979).

But there is no hint of anything like that in this case. The

Russian Federation withdrew from the litigation in 2009. And

nothing in the record indicates that, 15 years on, it is using

Tenex-USA to make arguments on its behalf. Rather, Tenex-

USA was a stranger to the case until years after the default

judgment, when Chabad served it with legal process in

enforcement proceedings. At that point, Tenex-USA

understandably began to challenge the district court’s exercise

of jurisdiction as inconsistent with our precedents.

For those reasons, the doctrine of jurisdictional finality

does not prevent us from applying in this case the interpretation

of the FSIA’s expropriation exception that governs in our

circuit—just as we would do in any other case presenting the

issue.

C.

Because the district court lacked jurisdiction over

Chabad’s claims against the Russian Federation when it

entered the default judgment and sanctions judgments, those

judgments are void as against the Federation. Consequently,

the judgments may not be enforced through attachment of

Tenex JSC’s, Tenex-USA’s, or VEB’s assets. See TIG Ins. Co.

v. Republic of Argentina, 967 F.3d 778, 781 (D.C. Cir. 2020).

Chabad’s claim on those assets is entirely derivative of its

claim on the Russian Federation’s assets. And without a valid

judgment against the Russian Federation, it no longer has any

such claim.

Though Chabad does not raise the point, we note that a

final judgment entered in excess of a court’s jurisdiction

typically is not void unless “the court that rendered judgment

23

lacked even an arguable basis for jurisdiction.” Lee Mem’l

Hosp. v. Becerra, 10 F.4th 859, 863–64 (D.C. Cir. 2021)

(internal quotation marks omitted) (quoting United Student Aid

Funds, Inc. v. Espinosa, 559 U.S. 260, 271 (2010)). And given

the abstruseness of Chabad I’s jurisdictional determinations

and the fact that Simon had yet to be decided, we cannot say

there was no arguable basis for the district court’s exercise of

jurisdiction over the Russian Federation when it entered the

default judgment and most of the sanctions judgments. But as

Lee Memorial Hospital v. Becerra recognized, we have

declined to apply the arguable-basis standard in cases involving

foreign sovereign immunity when the “objecting party”—here,

Tenex-USA—did not “appear[] in the challenged proceeding.”

Id. at 864 (quoting Bell Helicopter Textron, Inc. v. Islamic

Republic of Iran, 734 F.3d 1175, 1182 (D.C. Cir. 2013)). Since

that is the present situation, the judgments against the Russian

Federation are void simply because “the issuing court lacked

subject-matter jurisdiction, regardless of whether there existed

an ‘arguable basis’ for jurisdiction.” Bell Helicopter, 734 F.3d

at 1181.

Our holding also requires the Russian Federation to be

dismissed from the case: absent an applicable FSIA exception,

it is immune from Chabad’s claims. 28 U.S.C. §§ 1330(a),

1604. In arriving at that conclusion, we do not intend in any

way to downplay the wrongs Chabad has suffered or the

frustrations it has endured in its hundred-year effort to

reacquire its wrongfully taken sacred objects, of which this

lawsuit is only the latest chapter. The result we reach is simply

a consequence of the statute Congress enacted and the limits it

chose to set on claims against foreign states like the Russian

Federation. And we do not disturb the district court’s exercise

of jurisdiction over, or entry of judgment against, the RSL and

RSMA. Chabad remains free to proceed against those

entities—and perhaps also against the Russian Ministry of

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Culture and Mass Communications, although the Ministry’s

amenability to suit has not specifically been addressed to

date—as appropriate.

* * * * *

The district court stated that “unless and until it receives a

mandate” from this court directing it to dismiss the Russian

Federation, it “would continue to assert subject-matter

jurisdiction” over the Federation. Agudas Chasidei Chabad of

U.S., 659 F. Supp. 3d at 10. This opinion occasions such a

mandate. We vacate the district court’s order and remand for

further proceedings consistent with this opinion.

So ordered.