In January 2013, the United States District Court for the District of Columbia entered civil contempt sanctions against Russia, the Russian Ministry of Culture and Mass Communication (the "Ministry"), the Russian State Library ("RSL"), and the Russian State Military Archive ("RSMA") for failure to comply with a previous order of the Court. 

The case is Agudas Chasidei Chabad of United States v. Russian Federation, Case No. 1:05-cv-1548 (D.D.C. 2013).

Case History

In 2004, Chabad brought and action seeking return of religious books, artifacts and other materials concerning the cultural heritage of its forbearers, which fell into the defendants’ hands in the early 20th century. See Agudas Chasidei Chabad of U.S. v. Russian Fed'n (Chabad III), 798 F. Supp. 2d 260, 263 (D.D.C. 2011).  In 2009, Russia’s lawyers informed the court that it would no longer be participating in the case, arguing that the Court “lacked authority to adjudicate rights in property that in most cases always has been located in the Russian Federation…” Statement of Defs., June 26, 2009, ECF No. 71.   A year later, the court entered a default judgment in favor of Chabad, ordering the defendants to surrender the complete collection to the United States Embassy in Moscow or to the duly appointed representatives of Chabad.  The defendants never complied with that order.

Chabad then moved for contempt sanctions, seeking the entry of a monetary penalty for every day that the defendants continue to disobey the Court's Order.  In granting Chabad’s motion, the Court noted that it had the authority to issue sanctions under the Foreign Sovereign Immunities Act (“FSIA”).  Because the defendants had failed to take any steps necessary towards compliance with the Court's order, the Court concluded that Chabad has demonstrated defendants’ non-compliance to a reasonable certainty.

Analysis

In determining that it had authority to issue sanctions, the court looked to the inherent contempt power of federal courts[1].  The court also relied on FG Hemisphere Assocs., LLC v. Democratic Republic of Congo, 637 F.3d 373, 377-78 (D.C. Cir. 2011)  in which the D.C. Circuit affirmed the issuance of sanctions against a foreign state for refusing to comply with a Court's discovery orders.  The United submitted, briefed and argued that sanctions were not authorized under FSIA.  But the court relied on FG Hemishpere to conclude that they were authorized.

In order for sanctions to be warranted, it must generally be shown that the putative contemnor violated an order.  Here, the court previously concluded that defendants’ non-compliance with its 2010 Order has been demonstrated ‘to a reasonable certainty,’ as required to warrant the entry of civil contempt sanctions, a point which the United States conceded.  In attempting to prevent the award of sanctions, the United States argued that such an award could damage its ability to conduct diplomatic relations. The court declined to follow this, noting that the U.S. interest was not reasonably and specifically explained.

In the end, the court entered contempt sanctions against all defendants in the amount of $50,000 per day until they comply with the 2010 Order. Compare that to the sanction imposed on the Democratic Republic of Congo, a much smaller and weaker economy: $5,000 per week, doubling every four weeks until reaching a maximum of $80,000 per week. 

[1] A State cannot claim sovereign immunity in cases involving commercial contracts.