Agudas Chasidei Chabad of United States v. Federation

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 17, 2008 Decided June 13, 2008

No. 07-7002

AGUDAS CHASIDEI CHABAD OF UNITED STATES,

APPELLEE/CROSS-APPELLANT

v.

RUSSIAN FEDERATION, RUSSIAN MINISTRY OF CULTURE AND

MASS COMMUNICATION, RUSSIAN STATE LIBRARY, AND

RUSSIAN STATE MILITARY ARCHIVE,

APPELLANTS/CROSS-APPELLEES

Consolidated with

07-7006

Appeals from the United States District Court

for the District of Columbia

(No. 05cv01548)

James H. Broderick, Jr. argued the cause for

appellants/cross-appellees. With him on the briefs was

Donald T. Bucklin.

Nathan Lewin argued the cause for appellee/cross-

appellant. With him on the briefs were Marshall B.

2

Grossman, Seth M. Gerber, Alyza D. Lewin, and William B.

Reynolds.

Before: HENDERSON, Circuit Judge, and EDWARDS and

WILLIAMS, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS.

Opinion concurring in the judgment filed by Circuit

Judge HENDERSON.

WILLIAMS, Senior Circuit Judge: 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. See Agudas

Chasidei Chabad v. Russian Federation (“District Court

Decision”), 466 F. Supp. 2d 6, 10-14 (D.D.C. 2006). Agudas

Chasidei Chabad says that the Collection was taken by the

Soviet Union—or its successor, the Russian Federation—in

violation of international law.

3

According to the plaintiff’s allegations (as amplified in

some cases by later submissions), 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 (“RSMA,” again a term we use to include its

predecessors).

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

4

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,1 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.

District Court Decision, 466 F. Supp. 2d at 31. 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

1

The plaintiff initially filed suit in the Central District of

California, but that court, in response to a Russian motion for

change of venue, ordered the case transferred to the district court

here.

5

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.

I. FSIA: Immunity and Jurisdiction

The district court held that Russia was immune under the

FSIA with respect to the Library claims, but not with respect

to the Archive. 466 F. Supp. 2d at 31. Agudas Chasidei

Chabad’s appeal as to the Library is properly before us

because the district court entered final judgment as to those

claims under Fed. R. Civ. P. 54(b), expressly determining that

there is “no just reason for delay” of appellate review. Under

the collateral order doctrine, we also have jurisdiction over

Russia’s appeal of the district court’s assertion of jurisdiction

over the Archive claim. See Kilburn v. Socialist People’s

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

2004).

A. Background and General Principles

Section 1330(a) of Title 28 gives the district courts

subject matter jurisdiction over cases against foreign states “as

to any claim for relief in personam with respect to which the

foreign state is not entitled to immunity either under sections

1605-1607 of this title [parts of the FSIA] or under any

applicable international agreement.” In its suit against Russia,

Agudas Chasidei Chabad argues that the FSIA’s expropriation

exception, § 1605(a)(3), precludes the defendants’ immunity.

It states in relevant part:

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(a) A foreign state shall not be immune from the

jurisdiction of courts of the United States or of the States

in any case—

....

(3) in which [A] rights in property taken in violation of

international law are in issue and [B][1] 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 [2] that property or any property exchanged for

such property is owned or operated by an agency or

instrumentality of the foreign state and that agency or

instrumentality is engaged in a commercial activity in

the United States . . . .

28 U.S.C. § 1605(a)(3).

The provision appears to rest jurisdiction in part on the

character of a plaintiff’s claim (designated “A”) and in part on

the existence of one or the other of two possible “commercial

activity” nexi between the United States and the defendants

(designated “B”). Before exploring the statute’s particular

requirements, we pause to note the standards by which courts

are to resolve questions of federal jurisdiction.

First, to the extent that jurisdiction depends on particular

factual propositions (at least those independent of the merits),

the plaintiff must, on a challenge by the defendant, present

adequate supporting evidence. Thus, a plaintiff must establish

the facts of diversity for purposes of jurisdiction under 28

U.S.C. § 1332. McNutt v. Gen. Motors Acceptance Corp.,

298 U.S. 178 (1936). For purely factual matters under the

FSIA, however, this is only a burden of production; the

burden of persuasion rests with the foreign sovereign claiming

7

immunity, which must establish the absence of the factual

basis by a preponderance of the evidence. See, e.g., Aquamar

S.A. v. Del Monte Fresh Produce N.A., Inc. 179 F.3d 1279,

1290 (11th Cir. 1999); Cargill Int’l v. M/T Pavel Dybenko,

991 F.2d 1012, 1016 (2d Cir. 1993); Alberti v. Empresa

Nicaraguense de la Carne, 705 F.2d 250, 255-56 (7th Cir.

1983).

Second, to the extent that jurisdiction depends on the

plaintiff’s asserting a particular type of claim,2 and it has

made such a claim, there typically is jurisdiction unless the

claim is “immaterial and made solely for the purpose of

obtaining jurisdiction or . . . wholly insubstantial and

frivolous,” i.e., the general test for federal-question

jurisdiction under Bell v. Hood, 327 U.S. 678, 682-83 (1946),

and Arbaugh v. Y & H Corp., 546 U.S. 500, 513 & n.10

(2006). (Other circuit courts have applied this same standard

when jurisdiction depends on factual propositions intertwined

with the merits of the claim, but we need not express any

opinion on this point. See Safe Air for Everyone v. Meyer,

373 F.3d 1035, 1040 (9th Cir. 2004); cf. Morrison v. Amway

Corp., 323 F.3d 920, 925 (11th Cir. 2003) (finding no need

for the independent ascertainment, for jurisdictional purposes,

of merits-intertwined facts).) The Bell v. Hood standard to be

applied is obviously far less demanding than what would be

required for the plaintiff’s case to survive a summary

judgment motion under Fed. R. Civ. P. 56. Thus, for

example, in Clark v. Tarrant County, 798 F.2d 736 (5th Cir.

1986), the court upheld jurisdiction on a finding that the

plaintiffs’ position on the disputed element of their claim

“cannot be said [to be] wholly frivolous,” id. at 742, saying

2

We do not understand our concurring colleague’s

gerrymandering of this phrase to suggest that it refers to

jurisdictional facts. See Henderson Op. at 2.

8

expressly that it did “not intimate whether” the plaintiffs in

fact established the necessary element, id. at 743. See

generally Harry T. Edwards & Linda A. Elliott, Federal

Standards of Review ch. III.A (2007).

Section 1605(a)(3) presents both types of jurisdictional

questions. The alternative “commercial activity”

requirements (“B”) are purely factual predicates independent

of the plaintiff’s claim, and must (unless waived—see below)

be resolved in the plaintiff’s favor before the suit can proceed.

The remainder (“A”) does not involve jurisdictional facts, but

rather concerns what the plaintiff has put “in issue,”

effectively requiring that the plaintiff assert a certain type of

claim: that the defendant (or its predecessor) has taken the

plaintiff’s rights in property (or those of its predecessor in

title) in violation of international law.3 It is undisputed that

Agudas Chasidei Chabad has made such claims as to both

parts of the Collection. The defendants assert various legal

and factual inadequacies in the claims. It is rather unclear

what standard the district court applied to those contentions,

but Bell requires only that such potential inadequacies do not

render the claims “wholly insubstantial” or “frivolous.” See

327 U.S. at 682-83. As we shall show below, the claims

plainly survive that test.

Russia has seemed to draw a distinction between the

“rights in property” element of the plaintiff’s claim and the

“taken in violation of international law” element. In a motion

to dismiss Russia conceded that “[h]ere, for the purposes of

3

The District Court stated that under § 1605(a)(3) a

plaintiff can put property “in issue” without making any claim of its

own to rights in the property. 466 F. Supp. 2d at 21-22. This is

incorrect; and, in any case, a plaintiff relying on § 1605(a)(3) would

have an independent obligation to assert a basis for its own

standing.

9

this motion only, the first prong [of the expropriation

exception] (rights in property at issue) is not disputed,

inasmuch as Plaintiff’s claims of right to the Library and the

Archive are placed in issue by Plaintiff’s complaint.” Def.

Mot. Dismiss 10. The motion then stated, “Obviously, the

Defendants vigorously deny that Plaintiff has any right of

ownership or possession of either the Library or the Archive.”

Id. at 10 n.7. On that issue, therefore, Russia recognized that

Agudas Chasidei Chabad’s burden was only to put its rights in

property in issue in a non-frivolous way. Where a plaintiff

has failed to do so, such as by making concessions logically

inconsistent with a substantial claim to “‘rights in property’ of

which he was deprived in derogation of international law,” a

court will not find jurisdiction. Peterson v. Kingdom of Saudi

Arabia, 416 F.3d 83, 88 (D.C. Cir. 2005).

When it came to whether rights had been “taken in

violation of international law,” however, Russia vigorously

disputed the matter, seeming to regard this element as a

jurisdictional fact that—like “commercial activity”—must be

resolved definitively before the court could proceed to the

merits. On the contrary, for jurisdiction, non-frivolous

contentions suffice under Bell. Thus in West v. Multibanco

Comermex, S.A., 807 F.2d 820 (9th Cir. 1987), the Ninth

Circuit found jurisdiction proper under § 1605(a)(3) when the

plaintiff’s claim of conversion was “substantial and non-

frivolous” and “provide[d] a sufficient basis for the exercise

of our jurisdiction, even though we ultimately rule against the

plaintiffs on the merits”; indeed, the court found on the merits

that the defendant’s acts were not actually “takings in

violation of international law.” Id. at 826, 831-33; see also

Siderman de Blake v. Republic of Argentina, 965 F.2d 699,

712-13 (9th Cir. 1992) (finding “no difficulty [in] concluding

that the . . . complaint contains ‘substantial and non-frivolous’

allegations that [the disputed property] was taken in violation

10

of international law,” subject to further fact finding on

remand).

B. Specific Application

We address first the “rights in property” element of the

plaintiff’s claim, then the “taken in violation of international

law” element, and then the commercial activity nexus.

Finally, we address Russia’s related argument that the plaintiff

failed to exhaust its remedies in Russia before proceeding in

the United States.

1. Agudas Chasidei Chabad’s property rights. The

plaintiff maintains that the international Chabad organization

held a property interest in the Collection as it accumulated,

with a succession of Rebbes acting as custodians for the

benefit of Chabad and its followers, and that on incorporation

it automatically became vested under New York law with the

property rights of its predecessor entity. See N.Y. Relig.

Corp. Law § 4. As mentioned, Russia initially conceded that

“[h]ere, for purposes of this motion only, the first prong [of

the expropriation exception] (rights in property at issue) is not

disputed, inasmuch as Plaintiff’s claims of right to the Library

and the Archive are placed in issue by Plaintiff’s complaint.”

Def. Mot. Dismiss 10. Before us, however, in its reply brief,

Russia claims that it somehow rendered its waiver

inoperative.4

4

An FSIA defendant’s waiver of immunity is effective to

meet the FSIA’s jurisdictional requirements because Congress, in

deploying the FSIA to implement Article III’s grant of subject

matter jurisdiction over suits between citizens of a state and foreign

states, limited that jurisdiction to cases in which a foreign state (or

its agency or instrumentality) is not immune under the FSIA. Those

immunities are entirely personal, as is shown by Congress’s

11

Whether it did so or not is of no moment, however, as the

concession was obviously correct; the plaintiff’s complaint

indeed put in issue its property rights, if any, in the Collection.

Russia’s sole basis for attacking the plaintiff’s assertion of

property rights rests on a notion that the Collection’s

ownership has been conclusively resolved against Agudas

Chasidei Chabad in a prior litigation: Agudas Chasidei

Chabad of United States v. Gourary, 650 F. Supp. 1463

(E.D.N.Y 1987), aff’d, 833 F.2d 431 (2d Cir. 1987). As

Russia was not a party to that litigation, any preclusive effect

could only take the form of non-mutual collateral estoppel.

And while the effectiveness of such an estoppel argument to

render a claim “frivolous” is unclear, in any event the

Gourary judgment affords Russia no basis for precluding the

plaintiff here.

In Gourary, Agudas Chasidei Chabad sued the Sixth

Rebbe’s heirs over the ownership of certain religious books

and manuscripts that the Sixth Rebbe possessed in New York

at the time of his death (obviously not the Library or the

Archive, which were in Russia). The plaintiff claimed that the

Rebbe held them on behalf of the Chabad community and that

they therefore belonged to Agudas Chasidei Chabad; the

Rebbe’s heirs claimed them to be his personally and therefore

part of his estate. The books and papers at issue were ones

collected after 1925 that had made their way from Poland to

America during World War II and thereafter.

The reasons not to apply non-mutual collateral estoppel

here seem to be legion, but let us simply address one fatal

specification in § 1605(a)(1) that there is no immunity in any case

in which the foreign state has waived immunity. See generally

Caleb Nelson, Sovereign Immunity as a Doctrine of Personal

Jurisdiction, 115 Harv. L. Rev. 1559 (2002).

12

problem. Issue preclusion can be applied only as to an issue

resolved against the party sought to be estopped and necessary

to the judgment. Consol. Edison Co. of N.Y. v. Bodman, 449

F.3d 1254, 1258 (D.C. Cir. 2006) (citing Restatement

(Second) of Judgments § 27). In Gourary, Agudas Chasidei

Chabad had pressed two alternative theories. The broad one

was that it (or its predecessor) had owned the materials from

the start of the collection, the successive Rebbes acting at all

times on behalf of the religious community. The narrow one

was that the Sixth Rebbe had owned them and then

subsequently transferred them to Agudas Chasidei Chabad. In

ruling in favor of Agudas Chasidei Chabad, the Gourary court

appeared to rely on the narrow theory, 650 F. Supp. at 1474 &

n.9, 1476, but to the extent that it rejected the broad theory,

that rejection was completely unnecessary to the court’s

unqualified judgment in Agudas Chasidei Chabad’s favor.

At oral argument Russia tried to save its theory by a

claim that the Gourary court decided in part against Agudas

Chasidei Chabad, because on the narrow theory Agudas

Chasidei Chabad would be holding the documents for the

benefit of the worldwide religious community, of which the

Sixth Rebbe’s heirs were members. Tr. of Oral Arg. at 12-13.

Even assuming arguendo that some difference in community

members’ rights might turn on whether the community’s

ownership rested on one historical theory as opposed to

another, the Rebbe’s heirs were not seeking access to the

materials as members of the community; they were seeking

outright ownership. They lost. Completely.

2. A taking in violation of international law. Under this

prong, Russia challenges both Agudas Chasidei Chabad’s

Library claims—the taking in 1917-1925 and the taking (or

retaking) in 1991-1992. (It does not challenge the district

court’s holding on the Archive claim under this prong except

with respect to exhaustion, as discussed below.) As to the

13

Library’s taking in 1917-1925, Russia’s sole challenge rests

on its contention that at the relevant times, the Library and the

Archive were the personal property of the Fifth or the Sixth

Rebbe (who were Soviet citizens in the 1917-1925 period),

not of Chabad, so that any taking by the Soviet government

could not have violated international law. But again Russia

rests entirely on its proposed misapplication of the Gourary

case, and thus fails to show the plaintiff’s claim to be

insubstantial or frivolous. (Apparently relying only on

Gourary, the district court adopted Russia’s view as to the

ownership of the Library and its proposed conclusion as to the

absence of any violation of international law. But the

plaintiff’s contention is that the worldwide Chabad

organization, not any Soviet citizen, owned the Library,

creating at least a substantial and non-frivolous claim of a

taking in violation of international law. Cf. De Sanchez v.

Banco Central de Nicaragua, 770 F.2d 1385, 1396-97 & n.17

(5th Cir. 1985); Restatement (Third) of the Foreign Relations

Law of the United States § 712 (1987).)

This leaves the alleged taking of the Library in 1991-

1992. To the extent that Russia again relies on Gourary, its

reliance is no better grounded than before. But here the

defendants have a stronger theory, namely that the events of

1991-1992 were not a taking at all. In view of the plaintiff’s

contention that the Library had been taken in 1917-1925, this

obviously has some traction. We emphasize yet again,

however, that the jurisdictional question is only whether the

plaintiff’s claim is wholly insubstantial or frivolous. It is not.

To simplify matters, we look first at Agudas Chasidei

Chabad’s theory. It casts the events of 1991-1992 as a

“renewal” of the earlier illegal takings. Chabad Br. 41. The

facts of Altmann v. Republic of Austria, 142 F. Supp. 2d 1187,

1203 (C.D. Cal. 2001), aff’d, 317 F.3d 954, 968 n.4 (9th Cir.

2002), aff’d 541 U.S. 677 (2004), provide a possible template.

14

There a plaintiff’s predecessors in title recovered Klimt

paintings that the Nazis had seized, but then, in exchange for

export licenses, “donated” them to a government art gallery.

They claimed that the forced donation was a taking. Here,

Agudas Chasidei Chabad never recovered possession of the

Library, but we should think that a final court decree in its

favor, subject to no lawful appeal, might be considered a

recovery, such that government frustration of the decree’s

enforcement could qualify as a renewal of the earlier taking.

In this country, certainly, if a property owner secured a

judgment invalidating a prior taking, affirmed by the highest

court having jurisdiction, we would likely see executive

officials’ later assertion of ownership, and their frustration of

the owner’s efforts at physical recovery, as very much like a

retaking of the property.

The procedural history surrounding the Library, however,

is far more complex. In 1990, as perestroika unfolded, the

Seventh Rebbe dispatched a delegation to the Soviet Union to

undertake further efforts to obtain the Library. Various

institutions, first of the Soviet Union and then of the Russian

Federation, proceeded to issue a welter of confusing orders

and decrees. On September 6, 1991 Alexander Yakovlev, a

special adviser to General Secretary Mikhail Gorbachev,

assured the Chabad delegation that Gorbachev would that day

issue an order to the RSL to return the Library to Chabad.

The delegation followed this up with a petition to a Soviet

court, the State Arbitration Tribunal, to direct the RSL to

return the Library. That court issued such a direction on

October 8, 1991, giving the RSL one month to comply and

placing a lien on the Library. State Arbitration Tribunal,

Russian Socialist Federative Soviet Republic, Case #350/13

(Oct. 8, 1991). The court also found that the Library was “the

communal property of the entire Agudas Chasidei Chabad

movement” and that the Soviet government had failed to

prove that the Library “acquir[ed] a status of National

15

property.” Id.; see also District Court Decision, 466 F. Supp.

2d at 13.

On November 18, 1991, the Chief State Arbiter affirmed

in part and reversed in part. Chief State Arbiter, State

Arbitration Court of the Russian Soviet Federative Socialist

Republic, Decree Regarding Reconsideration of Ruling, No.

350/13H (Nov. 18. 1991) (“11/18/91 Decree”). He stated that

“the Arbitration Court is not obligated to consider the matter

of legal ownership of the . . . Library by either the Community

or the State (represented by [the RSL]), since evidence on file

in this case does not contain any basis upon which assumption

can be made that the aforementioned collection belongs to

anyone other than the Lubavitcher Rebbe.” Id. The district

court characterized this as a finding that “the Rebbe, rather

than Chabad, was the rightful owner of the Library,” 466 F.

Supp. 2d at 18 (emphasis added), and thus as a rejection of the

lower tribunal’s conclusion that the Library was the

“communal property of the entire Agudas Chasidei Chabad

movement.” That characterization is questionable, however.

The higher court’s action was to grant the Chabad

community precisely the relief it sought. After noting that the

“Community [had] appealed to the State Arbitration Court,

requesting that the . . . Library be transferred to the newly

established Jewish National Library,” 11/18/91 Decree at 4,

the Chief State Arbiter ordered the transfer of the Library—

starting the day of the decision’s issuance—to precisely that

institution. Id. The Jewish National Library was Chabad’s

co-petitioner in the lawsuit, and the plaintiff’s expert,

Professor Veronika R. Irina-Kogan, declared under oath that

the Jewish National Library participated in the suit “on behalf

of the Chabad Community.” Declaration of Veronika R.

Irina-Kogan ¶ 11.

16

Thus there appears a substantial and non-frivolous factual

basis for the view that the November 18, 1991 decision of the

Chief State Arbiter represented a legal recovery of the

property by Agudas Chasidei Chabad, possibly subject to

limitations on its removal from Russia. See 11/18/91 Decree

at 3 (stating that the materials were “part of Russia’s national

treasure”).

But the delegation’s efforts to have the order carried out

were frustrated—a frustration that arguably constituted a new

taking. According to a declaration submitted by the plaintiff,

RSL staff members responded to their efforts to take

possession by taunting them with anti-Semitic slurs and

threats of violence. “[A]pproximately 30 baton-wielding”

RSL police officers allegedly attacked the delegation and its

supporters. Declaration of Rabbi Boruch Shlomo Eliyahu

Cunin ¶ 10.

In December 1991 the Soviet Union dissolved, to be

replaced by various successor states, including the Russian

Federation. On January 29, 1992, Deputy Chairman of the

Russian Federation Aleksandr Shokhin ordered the RSL to

relinquish the Library. The executive order stated that the

Russian government “accept[s] a request from officials of the

movement of Lubavich Chassids (Agudas Chasidei Chabad)

for the delivery of [Library] holdings available to the [RSL] to

the [Maimonides] State Jewish Academy,” which houses the

Jewish National Library. By directing the latter to duplicate

the documents and deliver the copies to the RSL “before the

end of 1992,” the order by implication required delivery of the

originals to the Jewish National Library well before that date.

Government of the Russian Federation Regulation No. 157-r

(Jan. 29, 1992), Declaration of Tatiana K. Kovaleva, Ex. D.

An affidavit submitted by the plaintiff characterizes the

resolution as “ordering the RSL to return the Library to

Chabad’s representatives.” Cunin Decl. ¶ 11. That reading

17

appears plausible, given that the resolution is framed as the

executive’s “accept[ing]” a request from Agudas Chasidei

Chabad officials.

Thus, while the November 11, 1991 Decree may have

represented a judicial judgment transferring the Library into

the hands of Chabad’s allies, the Shokhin decree of January

1992 appears to have constituted parallel relief from the

executive branch.

But this executive relief was no more easily realized than

that provided by the Chief State Arbiter. The Chabad

delegation approached the RSL, but the plaintiff reports that

once again it was confronted by an anti-Semitic mob, which

thwarted its efforts to secure the Library, this time incited by

the director of the manuscript department at the RSL, who

“shout[ed] death threats through a bullhorn.” Cunin Decl.

¶ 11.

Further, Chabad’s original success before State

Arbitration Tribunal and the Chief State Arbiter encountered

not only practical but also juridical frustration. On February

14, 1992, the Deputy Chief State Arbiter of the Russian

Federation purported to reverse the prior court orders that had

required that the RSL transfer the Library, and ordered that

“all further action” in the case “cease.” Agudas Chasidei

Chabad’s expert maintains that the deputy made the ruling

“unilaterally and secretly” and says that the deputy lacked

authority under Russian law to nullify the order of the Chief

State Arbiter, and that his ruling “lacked any legal or binding

effect under Russian law.” Irina-Kogan Decl. ¶¶ 12-14.

Given the decider’s title as “Deputy Chief State Arbiter,” the

assertion is hardly implausible.

Finally, a legislative action purported to reverse

Shokhin’s January 29, 1992 decree ordering transfer of the

18

Library to Chabad’s representative. On February 19, 1992,

the Russian Federation’s Supreme Soviet (despite its title, a

body vested with legislative authority only between sessions

of the Congress of Soviets, a/k/a Congress of People’s

Deputies) issued an order purporting to nullify that decree and

stating that “the safety, movement and use of the holdings

available to the Russian State Library [be effectuated] solely

on the basis of the legislation of the Russian Federation and

the provisions of international law.” Supreme Soviet of the

Russian Federation, Decree No. 2377-1 (Feb. 19, 1992).

Agudas Chasidei Chabad’s later attempts to secure the return

of the Library have all failed.

To the extent that Shokhin’s decree or the Chief State

Arbiter’s order effected a recovery of the Library (within the

meaning of Altmann), the actions of the Deputy Chief State

Arbiter and the Supreme Soviet, coupled with RSL action on

the ground, would appear to have effected a retaking. To

return to our earlier variation on the facts of Altmann: if the

victim of a property seizure secured a judgment from the

highest available judicial authority that papers seized by the

government should be turned over to its ally, and a lower

court then abruptly “reversed” that decision, authorizing the

government to keep the papers, we would have little difficulty

viewing the latter order as a purported retaking of the

property. It would enhance the retaking case if high executive

officials issued orders paralleling those of the highest court,

followed by countermanding legislative action and

accompanied by government officials’ physical action. We

cannot say that the analogy is perfect. Here, the lines of

authority among the various judicial, executive, and

legislative bodies appear to defy comprehension by outsiders

(indeed, they may be inconsistent with the concept of lines of

authority altogether). But neither can we declare insubstantial

or frivolous the plaintiff’s claim that the 1991-1992 actions of

Russia and the Russian State Library constituted a retaking of

19

the property; thus we reverse the district court’s decision on

the point.

3. Commercial activity. Contrary to Russia’s claims, we

find that both the RSMA and the RSL engaged in sufficient

commercial activity in the United States to satisfy that

element of 28 U.S.C. § 1605(a)(3). (The district court so

found for the RSMA, but did not reach the issue as to the RSL

because, focusing exclusively on the events of 1991-1992, it

concluded that the plaintiff had failed to show a taking of the

Library in violation of international law. 466 F. Supp. 2d at

23, 24 & n.22.)

The argument over the RSL’s and RSMA’s commercial

activities rests on the relationship between the two clauses

specifying alternative commercial activity requirements,

which bear repeating here:

(3) in which [A] rights in property taken in violation of

international law are in issue and [B] [1] 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 [2] that property or any property exchanged for

such property is owned or operated by an agency or

instrumentality of the foreign state and that agency or

instrumentality is engaged in a commercial activity in the

United States . . . .

§ 1605(a)(3) (emphasis added).

Section 1603(d) offers a rather broad definition of

commercial activity for purposes of the FSIA:

(d) A “commercial activity” means either a regular

course of commercial conduct or a particular commercial

transaction or act. The commercial character of an

20

activity shall be determined by reference to the nature of

the course of conduct or particular transaction or act,

rather than by reference to its purpose.

§ 1603(d). The phrase “commercial activity carried on in the

United States,” by contrast, is defined as “commercial activity

carried on by such state and having substantial contact with

the United States.” § 1603(e) (emphasis added).

In the face of § 1603(d)’s hospitable language, Russia

offers a rather subtle argument for a more demanding test. It

suggests that since the first nexus clause in § 1605(a)(3)

requires that the property be present in the United States in

connection with a commercial activity carried on in the United

States, it would be quite anomalous if the second clause,

requiring neither physical presence in the United States nor

such a link (between property physically present and the

commercial activity), could be satisfied unless the level of

commercial activity was at least “a level of activity equal to

the standard established by the phrase ‘carried on’ of the first

prong and, accordingly, require ‘substantial contact’ with the

United States.” Russia Br. 42.

To support this conclusion Russia stresses the language in

§ 1603(e) quoted above, which requires that for commercial

activity to qualify as “carried on in the United States” it must

have “substantial contact with the United States.” Then,

noting that among Webster’s Third International’s examples

of “engaged” is to “begin and carry on an enterprise,” Russia

sprints to the conclusion that “engage in” in the second prong

must mean “carry on”; thus, abracadabra, the second prong

includes the first prong’s cross-referenced substantiality

requirement.

We need not decide whether Agudas Chasidei Chabad

can satisfy this more demanding standard, for Russia’s

21

argument plainly cannot work. Congress took the trouble to

use different verbs in the separate prongs, and to define the

phrase in the first prong. Russia wants us to turn that upside

down and obliterate the distinction Congress drew. Moreover,

we see no anomaly in applying the “commercial activity”

definition set forth in § 1603(d). While the first clause of

§ 1605(a)(3) and the definition in § 1603(e) are quite

demanding in some respects, the clause applies to activities

“carried on by the foreign state,” whereas the second clause

involves the commercial activities of the foreign state’s

agencies and instrumentalities. Congress might well have

thought such entities’ greater detachment from the state itself

justified application of § 1603(d)’s broad definition. (Russia

concedes that both the RSL and the RSMA are “agencies or

instrumentalities” of the Russian Federation for this purpose.

Russia Reply Br. 38 n.8.) The substantiality requirement of §

1603(e) is thus inapplicable.

Section 1603(d)’s first sentence seems to set a low

quantitative threshold and its second sentence a low

qualitative one. As the Court said in Republic of Argentina v.

Weltover, Inc., 504 U.S. 607 (1992), the qualitative criterion

asks “whether the particular actions that the foreign state

performs (whatever the motive behind them) are the type of

actions by which a private party engages in ‘trade and traffic

or commerce,’” for “when a foreign government acts … in the

manner of a private player within [a market], the foreign

sovereign’s actions are ‘commercial’ within the meaning of

the FSIA.” Id. at 614. Thus “a foreign government’s issuance

of regulations limiting foreign currency exchange is a

sovereign activity, because such authoritative control of

commerce cannot be exercised by a private party.” Id.

Both the RSMA and the RSL have entered transactions

for joint publishing and sales in the United States easily

satisfying these standards. At the time of the filing of the suit

22

in November 2004, the RSMA had entered contracts with two

American corporations for the reproduction and worldwide

sale of RSMA materials, including in the United States.

District Court Decision, 466 F. Supp. 2d at 21. One set of

contracts was with Primary Source Media and allowed the

American firm to publish, among other items, papers of Leon

Trotsky and other documents relating to the Russian Civil

War. The contracts include provisions waiving sovereign

immunity, specifying that the activities described in the

contract are “commercial in nature.” Agreement on the

Granting of Rights to Publish Archival Documents art. 14.

By the year 2000 the RSMA had received $60,000 in advance

royalties. See Declaration of Joseph Bucci ¶ 8; see also

Royalty Advance Statements, Primary Source Microfilm.

Another contract with Yale University Press provides for the

“joint preparation and publication of a volume of documents

entitled The Spanish Civil War” and garnered RSMA a

$10,000 royalty advance in the year of the contract.

The RSL has also contracted for cooperative commercial

activities in the United States. For example, it entered into

agreements with Norman Ross Publishing (later succeeded by

ProQuest), arranging for that firm to sell an encyclopedia and

to produce and distribute “microcopies” of various RSL

materials (in exchange for a 10% royalty payment to the

RSL). One such contract has already yielded RSL over

$20,000 and another over $5000.

Thus § 1605(a)(3)’s second alternative commercial

activity requirement is plainly satisfied.

4. Exhaustion. Russia contends that Agudas Chasidei

Chabad’s “taking claim as to the Archive must [] fail for the

reason that Chabad has failed to pursue and exhaust remedies

it has in the Russian Federation to recover the Archive.”

Russia Br. 34. (No such claim is made as to the Library,

23

presumably in view of Agudas Chasidei Chabad’s heroic—but

ultimately frustrated—legal efforts with respect to those

materials.) The district court held that Agudas Chasidei

Chabad was not required to exhaust Russian remedies before

litigating in the United States. 466 F. Supp. 2d at 21. We

believe this is likely correct, but that in any event the remedy

Russia identifies is plainly inadequate.

As a preliminary matter, nothing in § 1605(a)(3) suggests

that plaintiff must exhaust foreign remedies before bringing

suit in the United States. Indeed, the FSIA previously

contained one exception with a local exhaustion requirement,

§ 1605(a)(7), which for certain suits required that the foreign

state be granted “a reasonable opportunity to arbitrate the

claim in accordance with accepted international rules of

arbitration.” Congress repealed that exception this year. See

National Defense Authorization Act for Fiscal Year 2008,

Pub. L. No. 110-181, div. A, § 1083(b)(1)(A)(iii), 122 Stat. 3,

341 (2008) (repealing 28 U.S.C. § 1605(a)(7)). Obviously

before deletion of subsection (7) it would have been quite

plausible to apply the standard notion that Congress’s

inclusion of a provision in one section strengthens the

inference that its omission from a closely related section must

have been intentional, see United Mine Workers v. Mine

Safety & Health Admin., 823 F.2d 608, 618 (D.C. Cir. 1987);

we do not see that the inference is any weaker just because

Congress has, for independent reasons, removed the entire

exhaustion-requiring provision.

Russia invokes Restatement (Third) of Foreign Relations

Law of the United States, which notes:

Exhaustion of remedies. Under international law,

ordinarily a state is not required to consider a claim by

another state for an injury to its national until that person

has exhausted domestic remedies, unless such remedies

24

are clearly sham or inadequate, or their application is

unreasonably prolonged.

Restatement § 713, cmt. f.

But this provision addresses claims of one state against

another. Its logic appears to be that before a country moves to

a procedure as full of potential tension as nation vs. nation

litigation, the person on whose behalf the plaintiff country

seeks relief should first attempt to resolve his dispute in the

domestic courts of the putative defendant country (if they

provide an adequate remedy). But § 1605(a)(3) involves a

suit that necessarily pits an individual of one state against

another state, in a court that by definition cannot be in both

the interested states. Here there is no apparent reason for

systematically preferring the courts of the defendant state.

Russia advances a more compelling theory based upon

Justice Breyer’s concurrence in Republic of Austria v.

Altmann, 541 U.S. 677 (2004), which noted that a plaintiff

seeking relief under § 1605(a)(3) “may have to show an

absence of remedies in the foreign country sufficient to

compensate for any taking” and that a “plaintiff who chooses

to litigate in this country in disregard of the postdeprivation

remedies in the ‘expropriating’ state may have trouble

showing a ‘tak[ing] in violation of international law.’” Id. at

714 (alteration in original). Thus Justice Breyer draws on a

substantive constitutional theory—that there simply is no

unlawful taking if a state’s courts provide adequate

postdeprivation remedies. Id. (citing City of Monterey v. Del

Monte Dunes, 526 U.S. 687, 721 (1999), and alluding to cases

applying that doctrine).

The substantive theory would seem to moot the argument

from the language of the FSIA and is independent of

Restatement § 713. Nonetheless, one may question whether it

25

makes sense to extend such a requirement from the domestic

context, in which state courts are already bound by the U.S.

Constitution, to the foreign context, in which the courts that a

plaintiff would be required to try may observe no such limit.

Assuming that an exhaustion requirement exists,

however, the only remedy Russia has identified is on its face

inadequate. Russia points to a law entitled “Federal Law on

Cultural Valuables Displaced to the U.S.S.R. as a Result of

World War II and Located on the Territory of the Russian

Federation,” Federal Law N 64-FZ of April 15, 1998

(“Valuables Law”), available at

http://docproj.loyola.edu/rlaw/r2.html, particularly Articles 12

and 16. But, even assuming the other prerequisites of relief

were met, Article 19(2) of the statute authorizes return of

property only on the claimant’s “payment of its value as well

as reimbursement of the costs of its identification, expert

examination, storage, restoration, and transfer (transportation,

etc.),” without specifying rules for calculating value.

Whatever the valuation method, and assuming arguendo that

Russia’s payment of compensation would satisfy the

requirements of international law, obviously Russia’s mere

willingness to sell the plaintiff’s property back to it could not

remedy the alleged wrong.

II. Russia’s Defenses of Forum Non Conveniens

and Act of State

Russia moved to dismiss the claims as to the Library and

Archive on grounds of forum non conveniens, which the

district court denied. Russia also moved to dismiss on the act

of state doctrine, which the district court denied as to the

Archive but accepted as an alternative grounds for dismissal

as to the Library. The parties appeal the judgments adverse to

them. As above, we have jurisdiction over Agudas Chasidei

26

Chabad’s appeal because the district court entered final

judgment on the Library claims under Fed. R. Civ. P. 54(b).

Russia properly asserts pendent appellate jurisdiction as to the

Archive under Gilda Marx, Inc. v. Wildwood Exercise, Inc.,

85 F.3d 675, 679-80 (D.C. Cir. 1996), which allows a court

with jurisdiction over one appeal also to exercise jurisdiction

over issues “inextricably intertwined” with those raised by

that appeal. We (and the plaintiff) agree that there is such

intertwining here.

A. Forum Non Conveniens

Russia claims that the district court abused its discretion

in denying its motion to dismiss the claims to the Library and

Archive on grounds of forum non conveniens. We disagree

and uphold the district court’s decision, which applies to the

entire Collection.

In deciding forum non conveniens claims, a court must

decide (1) whether an adequate alternative forum for the

dispute is available and, if so, (2) whether a balancing of

private and public interest factors strongly favors dismissal.

See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 n.22

(1981). There is a substantial presumption in favor of a

plaintiff’s choice of forum. See Gulf Oil Corp. v. Gilbert, 330

U.S. 501, 509 (1947); TMR Energy Ltd. v. State Property

Fund of Ukraine, 411 F.3d 296, 303 (D.C. Cir. 2005). We

review the district court’s determination to see if it was a

“clear abuse of discretion.” TMR Energy Ltd., 411 F.3d at

303.

The district court found that Russia had failed to meet its

burden of demonstrating the adequacy of the Russian forum.

466 F. Supp. 2d at 28; see also El-Fadl v. Cent. Bank of

Jordan, 75 F.3d 668, 677 (D.C. Cir. 1996). Our conclusion

27

above that Russia’s Valuables Law did not provide an

adequate remedy with reference to any hypothetical

exhaustion requirement for the Archive might seem to compel

automatic affirmance of the forum non conveniens ruling

solely on that ground. But in this context a foreign forum “is

not inadequate merely because it has less favorable

substantive law,” El-Fadl, 75 F.3d at 678, so that the

adequacy issue would be more complicated. In any event, the

district court went on to resolve the balance of conveniences

in favor of the plaintiff, and we find no abuse of discretion in

that balance; we can affirm on that basis without addressing

the adequacy of the Russian forum in this context.

We need not rehearse the factors considered. We do note

two areas where Russia particularly finds fault with the

district court’s reasoning. First, it says that while the court

relied on the plaintiff’s agreement to pay the airfare and hotel

expenses of Russian witnesses needed for depositions here,

466 F. Supp. 2d at 29, in fact that agreement related solely to

the jurisdictional discovery process. Russia’s reading of the

stipulation appears correct, see Parties’ Stipulation Extending

Time to Respond to the Complaint, Setting a Briefing

Schedule, and Providing for Expedited Discovery of Elderly

Witnesses, Apr. 13, 2005, and the plaintiff does not answer

the objection. But the district court in the preceding sentence

referred to practical cooperation on other aspects of

jurisdictional discovery, and, when mentioning the witness

agreement, referred to it as contained in an “earlier

stipulation,” id.; thus the context of the court’s reference

suggests its full awareness of the agreement’s limits.

Accordingly, it seems reasonable to suppose that the court

simply regarded the witness agreement as a fact portending

similar cooperation in the future.

Second, Russia argues that the district court “will likely

be unable to afford Chabad the relief it seeks, possession of

28

the Archive (and the Library).” Russia Br. 53. The district

court saw the argument as a contention that a Russian court

would not heed an American court’s judgment in the

plaintiff’s favor, and called it an “affront” to the court. 466 F.

Supp. 2d at 29. Some district courts have treated a United

States forum’s inability to provide relief directly as an

argument for granting a defendant’s forum non conveniens

motion, see McDonald’s Corp. v. Bukele, 960 F. Supp. 1311,

1319 (N.D. Ill. 1997); Fluoroware, Inc. v. Dainichi Shoji

K.K., 999 F. Supp. 1265, 1271-73 (D. Minn. 1997), though

one might have thought that was simply the plaintiff’s

problem. In any event, Agudas Chasidei Chabad points to the

FSIA provisions that allow attachment of certain Russian

government property in the United States, 28 U.S.C.

§ 1610(a)(3), (b)(2), evidently believing that attachment of

such property would give it significant leverage over the

defendants, enhancing the likelihood that Russia or its courts

would respect the judgment of a U.S. court. Russia does not

reply to the point, and it seems plausible.

In short, we find no abuse of discretion.

B. Act of State

Russia invokes the act of state doctrine, under which “the

Judicial Branch will not examine the validity of a taking of

property within its own territory by a foreign sovereign

government, extant and recognized by this country at the time

of suit, in the absence of a treaty or other unambiguous

agreement regarding controlling legal principles, even if the

complaint alleges that the taking violates customary

international law.” Banco Nacional de Cuba v. Sabbatino,

376 U.S. 398, 428 (1964). The doctrine rests on a view that

such judgments might hinder the conduct of foreign relations

by the branches of government empowered to make and

29

execute foreign policy. Id. at 423-25; see also W.S.

Kirkpatrick & Co. v. Envtl. Tectonics Corp., 493 U.S. 400,

404-05 (1990). The burden of proving an act of state rests on

the party asserting the defense. See Alfred Dunhill of London,

Inc. v. Republic of Cuba, 425 U.S. 682, 691 (1976).

1. The Archive. Russia invoked the act of state doctrine

by a motion under Fed. R. Civ. P. 12(b)(6), as the defendant

had in W.S. Kirkpatrick, a procedure that would be correct if

its absence is part of the plaintiff’s case but wrong if it is a

defense. In any event, the district court reviewed the parties’

extensive factual presentations before it ruled that “that the act

of state doctrine does not apply to the taking of the Archive.”

466 F. Supp. 2d at 26. The district court did not expressly

convert Russia’s Rule 12(b)(6) motion into a motion for

summary judgment, see Fed. R. Civ. P. 12(d), but because

Russia initially raised the matter and the disposition was to

deny its motion, it seems appropriate to treat the ruling as the

denial of a Russian motion for summary judgment. We affirm

the district court’s order; Russia has failed to show that it was

entitled to judgment as a matter of law.

The act of state doctrine applies only when a seizure

occurs within the expropriator’s sovereign territory.

Sabbatino, 376 U.S. at 428; Riggs Nat’l Corp. & Subsidiaries

v. Comm’r, 163 F.3d 1363, 1367 (D.C. Cir. 1999). As to the

Archive, Russia’s theory is that it seized the Archive in

German territory occupied by the Soviet Union, and that such

occupation would be sovereignty enough. We need not

consider the substantive validity of that theory, however,

because Russia fails to demonstrate that it seized the Archive

in occupied Germany rather than in Poland.

Far from placing the factual issue beyond dispute, Russia

merely asserts that there is uncertainty as to the exact location

of the Russian seizure. But even that claimed uncertainty

30

appears trivial to non-existent. Records of the RSMA

submitted in the course of discovery state that the Archive

was received by the RSMA in September 1945 at

“Welfelsdorf,” in “Germany.”5 Russia does not deny that

“Welfelsdorf” is at most a misspelling of Wölfelsdorf,6 nor

does it claim that the scribe’s reference to “Germany”

undermines the fact that by September 1945 Wölfelsdorf was

part of Poland as defined by the Potsdam Protocol. Jointly

issued on August 1, 1945 by the United States, United

Kingdom, and Soviet Union, that Protocol announced a

tentative western border for Poland at the Oder-Neisse line, a

border which has never since been disturbed. It is undisputed

that Wölfelsdorf lies within Poland, as so defined.

Russia points to two items of evidence that it claims raise

doubt. First, it refers to a statement in the district court’s

recitation of facts to the effect that the Archive had been taken

to a “Gestapo-controlled castle in Germany.” 466 F. Supp. 2d

at 13 (quoting Pl.’s Opp’n to Defs.’ Mot. to Dismiss at 7).

Given that Wölfelsdorf was part of pre-World-War-II

Germany, the statement is altogether consistent with RSMA

records showing that the Russian acquisition occurred in post-

war Poland.

5

See Joint Appendix 4:3086 (referring to a July 6, 2005

delivery of documents bearing Bates Nos. DEF00168-218); id. at

4:3099-3103 (listing origins of certain RSMA materials and bearing

Bates numbers encompassed in the prior reference); id. at 3:2253,

:2255, :2265-67 (deposition testimony of Vladimir N. Kouzelenkov,

director of the RSMA, referring to RSMA’s book listing incoming

materials).

6

In fact, the Russian “e” is in many contexts pronounced

“yo,” so it is far from clear that there is even a misspelling.

31

Second, Russia points to a letter from the plaintiff to

President Vladimir Putin, stating that the Archive was “seized

by the Nazis and subsequently loaded on boxcars as they were

losing the war, to be taken deep into Germany and evade the

oncoming Russian liberators.” As with the contention that

the Nazis removed the Archive to a “Gestapo-controlled castle

in Germany,” the statement is not inconsistent with its later

capture by the Russians at Wölfelsdorf. Moreover, the letter

precedes the delivery to Agudas Chasidei Chabad of

documents showing the RSMA’s receipt of the materials at

Wölfelsdorf in September 1945.

In any event, the burden of providing a factual basis for

acts of state rests on Russia, see Riggs, 163 F.3d at 1367 n.5,

and it has not met its burden with respect to the Archive.

2. The Library. We have two taking scenarios regarding

the Library: the events of 1917-1925 and those of 1991-1992.

Having mistakenly found itself without jurisdiction over the

Library claim (a mistake in which it focused entirely on the

1991-1992 events), the district court said in a throwaway line

that “even were [the court] to have jurisdiction [over the

Library claims], these claims would be barred by the act of

state doctrine.” 466 F. Supp. 2d at 27.

The district court seemed to suggest that the 1991-1992

claims were barred because they challenged the decision of

the Deputy Chief State Arbiter and the decree of the Supreme

Soviet. Id. at 26-27. But the Second Hickenlooper

Amendment, 22 U.S.C. § 2370(e)(2), normally bars

application of the act of state doctrine to seizures occurring

after January 1, 1959. Thus the doctrine poses no apparent

barrier to the plaintiff’s claim that the 1991-1992 events

effected an unlawful taking.

32

As to the district court’s apparent ruling that the doctrine

bars any recovery of the Library based on the 1917-1925

events, we vacate the district court’s order. The plaintiff

argues that Sabbatino itself would except the 1917-1925

seizure from the doctrine. As we shall explain, the argument

poses both sensitive foreign policy and jurisprudential issues.

If on remand the court finds that the 1991-1992 actions of

Russia and the RSL constituted an actionable retaking of the

property, it will be unnecessary to resolve those issues, which

in any event have not yet been the subject of either factual

development or thorough briefing. While of course the court

might (as a matter of insurance) resolve the plaintiff’s claimed

exception even if it accepts the latter’s theory as to 1991-

1992, and is free to address non-jurisdictional issues in any

order it chooses, we refrain from any final ruling and discuss

the complications of the claimed exception merely to

highlight the questions that the parties must address.

As the district court recognized, the events of 1917-1925

all occurred within Russia, and thus were official acts of a

sovereign nation regarding property within its borders. We

could not grant the requested relief without invalidating those

acts. See 466 F. Supp. 2d at 27; see also W.S. Kirkpatrick,

493 U.S. at 405.

Agudas Chasidei Chabad contends that the Sabbatino

decision allows relaxation of the doctrine in response to

certain countervailing factors. It points to the following

passage:

It should be apparent that the greater the degree of

codification or consensus concerning a particular area of

international law, the more appropriate it is for the

judiciary to render decisions regarding it, since the courts

can then focus on the application of an agreed principle to

circumstances of fact rather than on the sensitive task of

33

establishing a principle not inconsistent with the national

interest or with international justice. It is also evident

that some aspects of international law touch much more

sharply on national nerves than do others; the less

important the implications of an issue are for our foreign

relations, the weaker the justification for exclusivity in

the political branches. The balance of relevant

considerations may also be shifted if the government

which perpetrated the challenged act of state is no longer

in existence, . . . for the political interest of this country

may, as a result, be measurably altered. Therefore, rather

than laying down or reaffirming an inflexible and all-

encompassing rule in this case, we decide only that the

Judicial Branch will not examine the validity of a taking

of property within its own territory by a foreign sovereign

government, extant and recognized by this country at the

time of suit, in the absence of a treaty or other

unambiguous agreement regarding controlling legal

principles, even if the complaint alleges that the taking

violates customary international law.

376 U.S. at 428. The passage mentions a number of factors

that might militate against application of the doctrine here.

Most significant are the phrase requiring that the taking have

been by a “sovereign government, extant and recognized by

this country at the time of suit,” and the earlier sentence

saying that the relevant considerations may shift when the

perpetrating government is no longer in existence. These

suggest that whatever flexibility Sabbatino preserves is at its

apex where the taking government has been succeeded by a

radically different regime.

Other circuits have on occasion declined to apply the

doctrine, or have directed consideration of countervailing

factors, in reliance on a change in regime. Two decisions

involve suits by the government of the Philippines against its

34

former President Ferdinand Marcos, seeking to recover

property acquired by him in office. Republic of the

Philippines v. Marcos, 862 F.2d 1355, 1361 (9th Cir. 1988)

(en banc) (declining to apply the act of state doctrine);

Republic of the Philippines v. Marcos, 806 F.2d 344, 359 (2d

Cir. 1986) (ordering the district court to weigh Sabbatino’s

qualifying considerations). In a third, Bigio v. Coca-Cola Co.,

239 F.3d 440 (2d Cir. 2000), the court found the doctrine

inapplicable to a suit by former Egyptian nationals against a

foreign corporation for its possession of property nationalized

by the defunct Nasser government; the sole expression of the

current Egyptian government on the matter was a letter from

the Minister of Finance directing the holder of the property to

return it to the plaintiffs. Id. at 452-53; cf. Bodner v. Banque

Paribas, 114 F. Supp. 2d 117, 130 (E.D.N.Y. 2000) (holding

the doctrine inapplicable to claims against banks that had

taken assets in the accounts of Jewish victims and survivors of

the Holocaust under the laws of Vichy France).

Here, of course, Russia and its agencies or

instrumentalities are the defendants, not private corporations

or defenestrated rulers. Plaintiff has pointed to statements in

its favor by Russian officials as high as former President Boris

Yeltsin; but the current Russian government, by its energetic

defense of this lawsuit, appears unwilling to relinquish the

Collection to Chabad. Thus, while no one doubts that the

collapse of the Soviet Union has entailed radical political and

economic changes in the territory of what is now the Russian

Federation, application of Sabbatino’s invitation to flexibility

would here embroil the court in a seemingly rather political

evaluation of the character of the regime change itself—in

comparison, for example, to de-Nazification and other aspects

of Germany’s postwar history. It is hard to imagine that we

are qualified to make such judgments. Moreover, our

plunging into the process would seem likely, at least in the

absence of an authoritative lead from the political branches, to

35

entail just the implications for foreign affairs that the doctrine

is designed to avert.

Agudas Chasidei Chabad also points to Sabbatino’s

suggestion that “the greater the degree of codification or

consensus concerning a particular area of international law,

the more appropriate it is for the judiciary to render decisions

regarding it.” 376 U.S. at 428. It asserts that the seizure of

the Library occurred “in a campaign to suppress the practice

of Judaism, not for any bona fide economic, academic, or

other recognized governmental purpose. Hence the takings

were plainly violations of jus cogens norms, just as is racial

discrimination, and no less the subject of ‘consensus’

condemnation in the international community.” Chabad Br.

63.

The argument is intuitively appealing. But it would

require us to embark on a path of ranking violations of

international law on a spectrum, dispensing with the act of

state doctrine for the vilest. Further, as the Sabbatino Court

refused to countenance an exception for violations of

international law simpliciter, id. at 429-31, we are unsure

what it intended in its references to different degrees of

“consensus.” While it would be heartening to believe that

there is a nearly universal consensus against religious

prejudice in general or anti-Semitism in particular, a glance

around the world exposes glaring examples to the contrary in

areas containing a large fraction of the human population.

Not only are the purely legal questions posed by Agudas

Chasidei Chabad’s argument difficult, but there are factual

issues that might bear on the ultimate outcome. Agudas

Chasidei Chabad argues that the 1917-1925 confiscation was

driven by hostility to Judaism, and it maintained at oral

argument that discovery would yield further evidence.

Indeed, it is widely recognized that the Soviet government

36

suppressed Jewish religious practice and persecuted Jews for

their religious beliefs. But to the extent that the Soviet Union

had embarked on a course of eradicating private property,

religion, and civil society generally, the role of selective

persecution in the Library’s seizure in 1917-1925 is unclear

on the current record. (On the other hand, perhaps there is a

stronger consensus against non-selective than selective

crushing of private property and civil society.) Without

suggesting that plaintiff’s proposed exception is necessarily

valid in any circumstances, we defer ultimate resolution and

simply vacate the ruling.

* * *

We therefore affirm the judgment of the district court

finding jurisdiction over Agudas Chasidei Chabad’s claims

concerning the Archive; we reverse its finding of Russia’s

immunity as to the Library claims based on the events of

1917-1925 and 1991-1992; we affirm the court’s rejection of

Russia’s forum non conveniens defense; we affirm its

rejection of Russia’s act of state defense to the Archive

claims; and we vacate its application of the act of state

doctrine to the Library claims.

So ordered.

KAREN LECRAFT HENDERSON, Circuit Judge, concurring in

the judgment:

Although I concur in the judgment, I do not agree with the

analysis of the jurisdictional issue contained in Part I.A of the

majority opinion. The majority analyzes section 1605(a)(3),1 the

provision of the FSIA that allows the plaintiff’s claims to survive

dismissal, by dividing the section into two parts that, in its view,

impose different burdens on the plaintiff. The portion of section

1605(a)(3) involving “rights in property taken in violation of

international law” (labeled “A” by the majority) requires only

that the plaintiff “assert a certain type of claim: that the

defendant . . . has taken the plaintiff’s rights in property . . . in

violation of international law,” which claim—to suffice—must

not be “ ‘wholly insubstantial’ or ‘frivolous.’ ” Maj. Op. 8

(citing Bell v. Hood, 327 U.S. 678, 682–83 (1946)). On the other

hand, the majority posits, the remainder of section 1605(a)(3)

(labeled “B” by the majority) requires the plaintiff to “present

adequate supporting evidence,” which “[f]or purely factual

matters under the FSIA . . . is only a burden of production;” id.

1

Section 1605(a)(3) provides:

A foreign state shall not be immune from the jurisdiction

of the courts of the United States or of the States in any

case— . . .

(3) in which rights in property taken in violation

of international law are in issue and . . .; [] that

property or any property exchanged for such

property is owned or operated by an agency or

instrumentality of the foreign state and that

agency or instrumentality is engaged in a

commercial activity in the United States . . . .

28 U.S.C. § 1605(a)(3).

2

at 6.2 The majority differentiates the burdens based on whether

the jurisdictional facts track “the plaintiff’s . . . claim,” id. at 7,

that is, “A,” or are instead “particular factual propositions . . .

independent of the merits[],” id. at 6 (emphasis in original), that

is, “B.”

While all of this may be only dicta—after all, we all agree

the plaintiff’s claims to both the Library and the Archive survive

dismissal—our court has yet to recognize such a construct (as is

manifested by the majority’s reliance on other circuits’

precedent, Maj. Op. 7–10)3 and I do not join in its adoption

2

“B” sets forth two alternatives of the “commercial activity”

tie between the United States and the defendants also needed to

establish jurisdiction, the second of which the plaintiff relies on.

See note 1 supra.

3

I reject the majority’s reliance on Bell v. Hood, 327 U.S.

678, 682–83 (1946), and Arbaugh v. Y & H Corp., 546 U.S. 500,

513 & n.10 (2006), insofar as it suggests the High Court has

embraced any similar bifurcation of subject-matter jurisdiction

in those cases. See Maj. Op. 7. The focus of the cited

discussion in Bell v. Hood is on the difference between a

dismissal for “want of jurisdiction”—a Rule 12(b)(1)

dismissal—and a dismissal “on the merits”—a Rule 12(b)(6)

dismissal. 327 U.S. at 683; see also Land v. Dollar, 330 U.S.

731, 735 n.4 (1947). Indeed, the “immaterial,” “wholly

insubstantial” and “frivolous” exceptions the majority opinion

takes from Bell v. Hood as the template for “A” jurisdictional

facts were themselves problematic to the Court. Id. (“The

accuracy of calling these dismissals jurisdictional has been

questioned.”). As for Arbaugh, in concluding that Title VII’s

15-employee “prerequisite” is non-jurisdictional, the Court

differentiated between jurisdictional and non-jurisdictional facts,

not two types of jurisdictional facts as the majority opinion

3

today. Any jurisdictional fact, once challenged, may require the

district court to satisfy itself of its jurisdiction. How it does so

should not be the subject of an elaborate proof scheme imposed

on appellate review. See Kilburn v. Socialist People’s Libyan

Arab Jamahiriya, 376 F.3d 1123, 1131 (D.C. Cir. 2004) (district

court “retains considerable latitude in devising the procedures it

will follow to ferret out the facts pertinent to jurisdiction”

(quotations omitted)); cf. Jerome B. Grubart, Inc. v. Great Lakes

Dredge & Dock Co., 513 U.S. 527, 537 (1995). In my view, the

plaintiff survives a Rule 12(b)(1) dismissal because it alleges that

(1) it owns the Library and the Archive, (2) both of which were

taken by the defendants or their predecessors in office based on

the latters’ intent “ ‘to suppress the practice of Judaism, not for

any bona fide economic, academic, or other recognized

governmental purpose,’ ” Maj. Op. 35 (quoting Chabad Br. 63);

and, further, (3) each defendant asserts ownership of either the

Library or the Archive and they both engage in commercial

activity in the United States. While all of these jurisdictional

facts were traversed by the defendants, the district court

correctly, and without distinguishing between those jurisdictional

facts “independent of the merits” of the plaintiff’s claim and

those “intertwined with the merits of the claim,” Maj. Op. 6–7

(emphasis in original), assured itself of their existence—with the

exceptions of the ownership of the Library and defendant RSL’s

commercial activity in the U.S. vel non, jurisdictional facts that

it either did not reach and/or we today reverse—primarily via

both parties’ submissions supporting/opposing dismissal.

Agudas Chasidei Chabad of United States v. Russian Federation,

466 F. Supp. 2d 6, 24–25 (D.D.C. 2006). “There is no need or

justification, then, for imposing an additional . . . hurdle in the

name of jurisdiction.” Grubart, 513 U.S. at 538.

maintains with its “A” and “B” split.