Opinion ID: 187189
Heading Depth: 1
Heading Rank: 1

Heading: FSIA: Immunity and Jurisdiction

Text: 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).
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: (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, 56 S.Ct. 780, 80 L.Ed. 1135 (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 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, 66 S.Ct. 773, 90 L.Ed. 939 (1946), and Arbaugh v. Y & H Corp., 546 U.S. 500, 513 & n. 10, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (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 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, 66 S.Ct. 773. 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 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 of international law, subject to further fact finding on remand).
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] 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 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 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, 124 S.Ct. 2240, 159 L.Ed.2d 1 (2004), provide a possible template. 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 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. 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 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 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 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 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 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, 112 S.Ct. 2160, 119 L.Ed.2d 394 (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, 112 S.Ct. 2160. 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 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, 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 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, 124 S.Ct. 2240, 159 L.Ed.2d 1 (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, 124 S.Ct. 2240 (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, 119 S.Ct. 1624, 143 L.Ed.2d 882 (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 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.