Casting further doubt on the practical possibility of using the Foreign Sovereign Immunities Act (FSIA) to recover cultural artifacts, the U.S. Government has at long last weighed in on the Chabad plaintiffs’ request for contempt sanctions against the Russian defendants, defendants who have defied for more than two years a judgment to return the library of the late Menachem Schneerson. Rightly or wrongly, this is another example of the waning utility of the FSIA to seek restitution of works held abroad, and does not bode well for the ongoing embargo by Russian museums against cultural artifact loans to the United States.
As readers of the Art Law Report will recall, the Chabad plaintiffs have made repeated requests to the District Court in Washington, DC to inflict some kind of compulsion against the Russian defendants. After asking that the defendants be held in contempt and fined monetarily until they complied with the judgment, the Court solicited the views of the United States. After several delays, the U.S. finally weighed in and asked the Court not to sanction the defendants.
The U.S. offered two arguments, one statutory and one discretionary. As to the statute itself, the U.S. correctly pointed out that the FSIA distinguishes between immunity from suit and immunity from execution (a topic much discussed here). 28 U.S.C. § 1610(a) waives immunity from execution only as to property in the United States. The U.S. argues, therefore, that contempt sanctions are improper because the statute and the caselaw interpreting it do not allow for the execution on property outside the United States, which it is undisputed that the Schneerson library is. In other words, the U.S. argues, the Chabad plaintiffs are asking the court “to assert just such extraterritorial jurisdiction over tangible property possessed by Russia in Russian territory.”
This argument is unpersuasive. The Chabad plaintiffs already have a judgment—not just an order—compelling the return of the Schneerson Library. No one is proposing to attach or execute on the property in Russia; given the utter contempt that the Russian authorities have shown for the U.S. courts there would be no reason even to try. What the Chabad plaintiffs in fact ask the Court to do is to fine the Russian defendants until they comply. Even then, the fine would accumulate and be unenforceable—except as to assets in the United States, against which the FSIA offers no immunity. In other words, the real statutory question is whether the FSIA contemplates that a foreign sovereign may be compelled to surrender tangible property outside the United States by seizing property inside the United States. The U.S. response is silent on this question and, in our view, fails to persuade as a result.
The second argument advanced by the U.S. is that even if the FSIA would allow contempt sanctions, the Court should decline to enter them as a matter of prudence. This is because doing so would damage “the United States’ interest in promoting resolution of the dispute between Chabad and Russia over the Collection.” As authority for that proposition, the U.S. cites “accepted rules of public international law” and the risk that other states would fail to accord the U.S. reciprocity were it to be sued, instances in which the U.S. itself typically relies on its own sovereign immunity.
Lastly, the government touts its efforts to broker a resolution. It summarizes those efforts as “high-level diplomatic efforts with Russia to secure the transfer of the Collection. . . . which, as is so often the case, with diplomacy, require perseverance and consistency.” Contempt sanctions, the government argues, would upset that balance.
This argument is hard to take seriously. Assuming that the diplomatic efforts are as high-level as the government suggests, they have failed, utterly, for literally years now. Indeed, as time has gone on, the Russian officials who speak out on the matter have taken only to insulting the U.S. judiciary system in continually bolder terms.
Instead, and in keeping with the increasing use of the Foreign Affairs Doctrine to dismiss restitution suits, the U.S. position underscores the apparent futility of the FSIA as a tool for restitution. Given the U.S. argument, persuasive or not, the Court will likely defer or turn down the request for sanctions, making the entire—ostensibly successful—lawsuit actually unsuccessful. It is hard to imagine a more recalcitrant defendant than these, yet they will likely escape any consequence. Anyone given thought to resorting to the FSIA to seek restitution should think on this cautionary tale.