Government seizes property: Foreign Sovereign Immunities Act: Economic loss: Verdict

Law Reporter, Apr 2000

Government seizes property: Foreign Sovereign Immunities Act: Economic loss: Verdict. Magness P. Russian Fed'n, U.S. Dist. Ct., S.D. Tex., No. CIV.A. H-97-2498, June 9,1999.

During the 1917 Bolshevik Revolution, the Russian government seized the property of a merchant family in 1991, the newly established Russian Federation revived the concept of private property and passed laws allowing heirs to reclaim their families' seized properties. The merchant family's heirs, now living in the United States, completed the reclamation paperwork and regained title to their properties. They were denied possession, however, because the Russian government deemed the properties antiquities.

The heirs filed suit against the Russian Federation and others under an exception to the Foreign Sovereign Immunities Act, 28 U.S.C. 1605, which allows private citizens to sue foreign governments engaged in "commercial activity" in the United States. Plaintiffs claimed that the Russian Federation came under this exception because it directly sponsors touring shows in the United States.

Defendants failed to respond to the complaint and the court issued an order of default.

In a bench trial, the court entered final judgment for plaintiffs in the amount of $234 million, representing the value of the heirs' property plus lost rental value. The court ordered that the touring show items remain in the U.S. pending resolution of the case.

Subsequently, defendants' motion to vacate the judgment based on improper service was denied. Magness ro. Russian Fed'n, - F. Supp. 2d -, No. Civ.A.97-2498, 2000 WL 51152 (S.D. Tex. Jan. 12, 2000).

Plaintiffs' Counsel Daniel Nelson, Houston, Tex.