U.S. Opposes Bid to Collect $14M in Sanctions Against Russia

The U.S. government is opposing efforts to enforce more than $14 million in sanctions against the Russian government in a dispute over the return of Jewish religious texts seized in the early 20th century.

Agudas Chasidei Chabad of the United States, the plaintiff suing Russia for the return of thousands of pages of religious texts, wants a federal judge in Washington to enter a judgment for one year’s worth of $50,000 daily sanctions, minus a 70-day break Chabad approved to support unsuccessful diplomatic negotiations.

On Feb. 21, lawyers for the U.S. Department of Justice, which is not a party to the case, argued in court papers that the judgment would go against federal law and “cause significant harm to the foreign policy interests of the United States.”

U.S. officials have supported Chabad’s claim to the Schneerson Collection—more than 12,000 books and manuscripts seized in Russia in the early 20th century, and 25,000 pages of texts stolen by the Nazis and then taken as war loot by the Soviet Red Army.

Still, the Justice Department and U.S. Department of State opposed U.S. District Senior Judge Royce Lamberth’s decision last year to order sanctions against the Russian government for failing to comply with his 2010 order to return the collection. Lawyers for the government warned then, as they did in their latest filings, that a sanctions order would hurt efforts to reach a diplomatic solution.

The case is seen as an important test of the federal Foreign Sovereign Immunities Act, which generally limits the ability of plaintiffs to take property from foreign governments.

Russia has not participated in the case since 2009, after unsuccessfully arguing to have the suit tossed out on the grounds of sovereign immunity.

Diplomatic talks in recent years have failed. Russian officials have repeatedly said the collection belongs to the state. Last year, part of the collection was moved to the Jewish Museum and Tolerance Center in Moscow, and President Vladimir Putin was quoted then in press reports saying he considered the dispute “closed.”

Chabad argues that entering a judgment now would give teeth to Lamberth’s sanctions order, allowing the plaintiffs to register the judgment in other courts and to track down Russian property to seize to satisfy the judgment.

“Russia continues to disregard this Court’s jurisdiction and rulings,” Chab­ad’s attorneys wrote in Jan. 28 court papers in U.S. District Court for the District of Columbia. “As Russia’s public position on this issue continues to harden, renewed efforts to enforce the Court’s default judgment are in order.”

In opposing Chabad’s request, Justice Department lawyer Nathan Swinton wrote that the Foreign Sovereign Immunities Act didn’t permit sanctions as a means for forcing a foreign government—in this case, Russia—to give up property within its borders and under its control.

“Imposition of sanctions against Russia in an effort to compel it to surrender property it holds within its own borders violates this basic principle of execution immunity under the FSIA,” Swinton wrote.

In a letter also submitted to the court on Feb. 21, Mary McLeod, principle deputy legal advisor for the State Department, wrote there was still hope for a diplomatic solution. McLeod said State Department officials met with Russian officials in Moscow three weeks ago to “discuss possible options for making progress.”

According to McLeod, Lamberth’s sanctions order last year hurt negotiations. She warned that if Lamberth entered a judgment, it would “set another troubling precedent” and threaten the United States’ position in litigation abroad.

“The Department understands that Chabad is frustrated with the pace of discussions, but diplomatic discussions relating to complex international disputes where both sides have strong views necessarily takes time,” she said.

A lead attorney for Chabad, Alzya Lewin of Washington’s Lewin & Lewin, called the Justice Department’s position “very disappointing.”

“The Statement of Interest filed by the DOJ repeats many of the same arguments previously rejected by the Court,” she said in an email. “Unfortunately, the State Department has made no material progress in the negotiations it has pursued this past year or during the previous decades.”

Updated at 4:23 p.m.

Contact Zoe Tillman at ztillman@alm.com. On Twitter: @zoetillman.