Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-07-07006/USCOURTS-caDC-07-07006-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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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/crossappellant. With him on the briefs were Marshall B. 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 1 of 39
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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. 

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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 

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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. 

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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 

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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. 

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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. 

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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 nonfrivolous” 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 

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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 

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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). 

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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 

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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. 

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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 

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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. 

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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 

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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 

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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 

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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 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 19 of 39
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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 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 20 of 39
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 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 21 of 39
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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, 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 22 of 39
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 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 23 of 39
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 

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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 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 25 of 39
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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 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 26 of 39
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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 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 27 of 39
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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 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 28 of 39
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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 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 29 of 39
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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 postwar 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. 

USCA Case #07-7006 Document #1121539 Filed: 06/13/2008 Page 30 of 39
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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. 

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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 

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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 allencompassing 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 

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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 

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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 

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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. 

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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).

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 ofthe FSIA that allowsthe plaintiff’s claimsto 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.

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2

2

“B” setsforth 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-jurisdictionalfacts,

not two types of jurisdictional facts as the majority opinion

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 claimsto 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

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3

maintains with its “A” and “B” split.

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

plaintiffsurvives 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

(emphasisin original), assured itself oftheir 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.

AgudasChasideiChabad 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.

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