Chabad v. Russian Federation
2013 WL 164071
D.C. Cir.2013Background
- Chabad sued Russia and related Russian defendants for return of expropriated religious books and materials.
- Defendants failed to comply with this Court’s July 30, 2010 Order demanding surrender of the collection.
- Chabad obtained a 2010 default judgment after the defendants stopped participating in the case.
- Chabad moved for civil contempt sanctions nearly a year after the order; service and response issues followed.
- U.S. history and diplomacy with Russia were considered; the United States submitted an interest statement opposing sanctions, which the Court ultimately rejected.
- The Court held a hearing and decided sanctions were appropriate, authorizing $50,000 per day until compliance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to impose sanctions on a foreign state under FSIA | Chabad/Russia subject to contempt under FSIA authority | FSIA lacks authority to award contempt relief for non-compliance | Authority to issue contempt sanctions affirmed |
| Sanction appropriateness to coerce compliance | Sanctions needed to compel return of the collection | Diplomatic concerns and policy considerations weigh against sanctions | Sanctions appropriate to coerce compliance |
| Optimal sanction amount | Set at a level that coerces compliance | Economic impact considerations; smaller sums could suffice | Amount set at $50,000 per day until compliance |
Key Cases Cited
- FG Hemisphere Assocs., LLC v. Democratic Republic of Congo, 637 F.3d 373 (D.C. Cir. 2011) (court approved civil contempt against a foreign state for non-compliance; informs authority to sanction)
- Bilzerian (SEC v. Bilzerian), 613 F.Supp.2d 66 (D.D.C. 2009) (civil contempt standard and coercive purpose in sanctions)
- Chabad III, 798 F.Supp.2d 260 (D.D.C. 2011) (reaffirmed the court’s authority and standards for contempt in this FSIA context)
- Broderick v. Donaldson, 437 F.3d 1226 (D.C. Cir. 2006) (clarifies clear and unambiguous order and proof standards for contempt)
- United States v. Philip Morris USA Inc., 287 F.Supp.2d 5 (D.D.C. 2003) (illustrates coercive per-day sanction rationale)
- Autotech Techs. v. Integral Research & Dev., 499 F.3d 737 (7th Cir. 2007) (supports broad authority to issue contempt sanctions)