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Chabad Responds to Russia's Misinformation Campaign Concerning A Federal Court's Imposition of Civil Contempt Sanctions Against Russia

SANTA MONICA, Calif., Jan. 17, 2013 /PRNewswire/ -- On January 16, a U.S. federal court issued civil contempt monetary sanctions in the amount of $50,000 per day against the Russian Federation, Russian Ministry of Culture and Mass Communication, Russian State Library, and Russian State Military Archive for refusing to comply with a July 2010 judgment ordering return of a large collection of sacred religious books and archives to its rightful owner, Agudas Chasidei Chabad of United States. 

This Statement responds to false and erroneous declarations made by Russian authorities in response to entry of the court's order.

(1) Russia claims that United States courts lack "jurisdiction."

Under the Foreign Sovereign Immunities Act ("FSIA"), U.S. federal courts have jurisdiction over claims against foreign states involving the expropriation of property in violation of international law.  They also have authority to issue civil contempt sanctions against foreign states, as recently confirmed by the D.C. Circuit in the case FG Hemisphere Associates, LLC v. Democratic Republic of CongoRussia's position that yesterday's civil contempt sanctions order was "unlawful" reflects Russia's misunderstanding of American law.

(2) Russia claims that Chabad wants a Russian "national treasure."

Chabad, an international non-profit Orthodox Jewish organization, filed suit in 2004 under the FSIA to recover 12,000 books and manuscripts that were seized from it during the Bolshevik Revolution and Russian Civil War (the "Library") and 25,000 pages of handwritten manuscripts and books seized by Nazis and then looted as "trophy documents" in Poland in 1945 by the Soviet Red Army (the "Archive"). 

Russia falsely asserts that it simply "recovered" property that had been "abandoned" by Chabad.  The truth is quite different.  Russia's Bolshevik government seized the Library from a private warehouse in Moscow in 1917, where Chabad's spiritual leader, the Fifth Rebbe, had sent it for safekeeping as he fled the German forces invading Russia.  The Soviet Union rejected numerous pleas for the return of the Library from Chabad's leaders, but never nationalized the books.  After arresting Chabad's new leader, the Sixth Rebbe, for "counter revolutionary activities" (namely establishing Jewish schools), the Soviets beat him and sentenced him to death by firing squad in 1927, but the sentence was commuted, because of international pressure, to exile. 

The Nazi German invasion of Poland in 1939 forced the Sixth Rebbe to flee yet again.  The Nazi forces seized the Archive and transferred it to a Gestapo-controlled castle in Poland, where Soviet military forces plundered the Archive in September 1945 and transferred it as "trophy documents" to a secret facility in Moscow, where it was hidden from the public for many decades. A document belatedly disclosed by Russia in discovery recites how the Archive was taken by the Red Army "in 1945 as part of German trophy documents." It contradicts the description Russia is giving today to these manuscripts.

(3) Russia claims that the court has treated it provocatively.

Following nearly four years of active litigation between the parties, during which Russia lost in the United States Court of Appeals, Russia and its agencies precipitously stopped speaking with the international law firm that had represented them and withdrew from the case. They stated that "[t]he Russian Federation views any continued defense before this Court and, indeed, any participation in this litigation as fundamentally incompatible with its rights as a sovereign nation." 

Chabad was required by United States law to present evidence to support its claim. The Court entered a judgment in favor of Chabad after finding that "[p]laintiff has met its burden of proving a prima facie case against defendants and has established its right to relief by evidence satisfactory to the Court."  The Court held that "the takings of the Library and the Archive by defendants and their predecessor regimes were not for a public purpose, were discriminatory, and occurred without just compensation to plaintiff."  As a result, the Court ordered Russia and its agencies "to surrender . . . the complete collection of religious books, manuscripts, documents and things that comprise the 'Library' and the 'Archive.'"  Order & Judgment of July 30, 2010. 

(4) Russia claims that it has not received due process of law.

The Court issued an Order to Show Cause in connection with Chabad's Motion for Civil Contempt Sanctions.  Russia failed to respond to the Court's Order to Show Cause within 60 days.  Chabad thereafter voluntarily requested two stays of enforcement of the judgment to create an atmosphere conducive to settlement negotiations.  The stays expired on March 1, 2012.

On January 13, 2012, Russian Culture Minister Alexander Avdeyev announced at a press conference that "A constructive dialogue over the Schneerson Library will be possible only after the U.S. court reverses its decision and the claimant withdraws its lawsuit."  On March 5, 2012, Chabad renewed its request that the Court enter an order finding defendants in contempt of court and issue monetary sanctions against them for refusing to comply with the Court's judgment in favor of Chabad. The Court delayed any action and requested the United States to state its view before issuing any further order.

(5) Russia claims that the sanctions will make settlement difficult.

Chabad has made a good faith effort to negotiate with Russia, including two meetings at the Russian Embassy in Washington, D.C.  Unfortunately, Russia has not complied with the Court's judgment. Nor has it agreed to return any portion of the "Schneerson Collection" as a result of diplomatic efforts or as an act of generosity. Only after the Court found Russia in contempt did Russian representatives agree to meet with Chabad's counsel.

(6) Russia asserts that the sanctions will impede exhibition of Russian art in the United States.

Chabad will not seek to enforce the judgment or civil contempt order by seeking to attach any art or objects of cultural significance subject to the immunity protections of 22 U.S.C. section 2459. It made that position clear to the District Court and to Russia long ago, and the Court has re-affirmed the immunity of such art under United States law. Russia's threat is a bogus attempt to turn American public opinion against Chabad.

Chabad is headquartered in Brooklyn, New York with over 4,500 international branches; it is the largest Jewish organization in the world today. 

Chabad is represented by attorneys Marshall B. Grossman and Seth M. Gerber of Bingham McCutchen LLP, and by Nathan Lewin and Alyza D. Lewin of Lewin & Lewin, LLP.

Offering a broad range of market-leading practices focused on global companies, Bingham, www.bingham.com, has approximately 1,000 lawyers in 14 offices in the U.S., Europe and Asia. Follow the firm on Twitter @BinghamLaw.

Based in Washington, D.C., Lewin & Lewin LLP– www.lewinlewin.com – specializes in Supreme Court and federal appellate litigation and is available for consultation by lawyers and clients in complex criminal and civil matters in federal courts.  Lewin & Lewin also represents clients and assists attorneys in relations with federal legislative, executive and administrative agencies.

SOURCE Bingham McCutchen LLP

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