Alexander Khochinsky v. Republic of Poland

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 9, 2020 Decided June 18, 2021
No. 19-7160
ALEXANDER KHOCHINSKY,
APPELLANT
v.
REPUBLIC OF POLAND, A FOREIGN STATE,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:18-cv-01532)
Nicholas M. O’Donnell argued the cause and filed the
briefs for appellant.
Desiree F. Moore argued the cause for appellee. With her
on the brief was George C. Summerfield. Jonathan M. Cohen
entered an appearance.
Before: SRINIVASAN, Chief Judge, RAO, Circuit Judge,
and GINSBURG, Senior Circuit Judge.
Opinion for the court filed by Chief Judge SRINIVASAN.
SRINIVASAN, Chief Judge: In 2010, Alexander
Khochinsky, then a Russian foreign national living in the
2
United States, contacted the Republic of Poland seeking
restitution for the loss of his family’s land during the Nazi
invasion. In an effort to negotiate with Poland for the payment
of restitution, Khochinsky offered a painting in his possession
that he believed resembled one reported missing by Poland.
Poland did not respond to the offer as Khochinsky anticipated.
Instead, it sought Khochinsky’s extradition from the United
States on the ground that he was knowingly in possession of a
stolen painting. Poland’s extradition attempt ultimately failed.
Khochinsky then brought an action against Poland,
alleging that the effort to extradite him was tortious and
infringed his rights. The district court dismissed the suit,
holding that the Foreign Sovereign Immunities Act gives
Poland immunity from Khochinsky’s action. We affirm.
I.
On appeal from a dismissal in favor of a foreign sovereign
on grounds of sovereign immunity, we assume the
unchallenged factual allegations in the complaint to be true.
Simon v. Republic of Hungary, 812 F.3d 127, 135 (D.C. Cir.
2016).
A.
The story behind Khochinsky’s suit traces back to a small
town in Poland at the outset of World War II. At the time,
Khochinsky’s mother, Maria Khochinskaya, a Polish Jew,
lived in the town of Przemysl, Poland, where her family owned
property. In 1939, Nazi Germany invaded Poland, prompting
the Soviet Union to respond by annexing a portion of Przemysl.
The annexation cut the city in half, with Maria’s residence
falling within the annexed portion.
3
A few years later, on June 20, 1941, Maria and her
grandmother took a trip that saved their lives. That day, a
Friday, they traveled east to Lviv (then part of the Soviet
Union) to observe the Sabbath with Maria’s mother. The next
day, Nazi Germany invaded the Soviet half of Przemysl,
murdering Maria’s relatives who had remained behind. Maria
became heir to the family property in Przemysl, and that
inheritance passed to Khochinsky upon his mother’s death in
1989.
In the 1990s, Khochinsky returned to Przemysl to find that
his mother’s house had been replaced by a Catholic church.
That was a surprise to Khochinsky because his family had
never been compensated for the conversion of the property. He
initially did not seek restitution from Poland, though, due to his
perception that Poland was unreceptive to Holocaust-related
restitution claims.
Khochinsky’s calculus changed in 2010, when he learned
that a painting reported missing from Poland resembled one
that he had inherited from his father. When Khochinsky’s
father died in 1991, Khochinsky inherited Girl with Dove, a
painting by French rococo master Antoine Pesne. According
to Khochinsky’s father, the painting had been in Germany
before he acquired it following World War II. As for the
painting reported missing by Poland, it had been looted from
the Wielkopolskie Museum in Poland by Nazi forces and never
recovered.
Khochinsky did not know whether the two paintings were
one and the same. Regardless, Khochinsky believed that Girl
with Dove might serve as a useful bargaining chip in his efforts
to obtain restitution from Poland for his family’s land. To that
end, in 2010, he contacted Poland and offered Girl with Dove.
A Polish official, indicating an interest in negotiating with
4
Khochinsky, sent an expert to Khochinsky’s gallery to examine
the painting. The expert determined that Girl with Dove was
the missing painting but did not share his conclusion with
Khochinsky.
Rather than negotiating with Khochinsky, Poland opted to
pursue criminal charges against him. In January 2013, a Polish
court accused Khochinsky of knowingly and unlawfully
purchasing Girl with Dove, and Poland issued a “Wanted
Person Notice” for his arrest. Later that year, Poland submitted
a request to the United States for Khochinsky’s extradition. In
early 2015, an Assistant United States Attorney filed a petition
for a certificate of extraditability in the United States District
Court for the Southern District of New York. The next day,
Khochinsky was arrested and imprisoned for more than one
week. Upon release, Khochinsky was subject to continued
house arrest and electric monitoring.
In August 2015, the district court denied the Government’s
petition for a certificate of extraditability and dismissed the
extradition complaint. In re Extradition of Khochinsky, 116 F.
Supp. 3d 412, 422 (S.D.N.Y. 2015). The court found that “the
Government failed to adduce any evidence” that Khochinsky
knew Girl with Dove was “stolen at the time he acquired it.”
Id. The court thus held that “the Government ha[d] failed to
establish probable cause to believe that Khochinsky committed
the crime with which he [was] charged.” Id.B.
In June 2018, Khochinsky filed suit against Poland in the
United States District Court for the District of Columbia.
Khochinsky claimed that Poland’s unsuccessful—and, in his
view, retaliatory—extradition request had caused him
“substantial damage.” Compl. ¶ 115, J.A. 17. Khochinsky’s
5
complaint set out five counts against Poland: (i) a violation of
his First Amendment rights by instigating a retaliatory
extradition process; (ii) quiet title as to his ownership of Girl
with Dove; (iii) tortious interference with his business
stemming from his imprisonment and house arrest; (iv) aiding
and abetting a trespass of his family land; and (v) abuse of
process in connection with Poland’s conduct in the extradition
proceeding.
Poland did not timely answer Khochinsky’s complaint or
enter any appearance. As a result, on March 12, 2019, the
Clerk of the Court entered a default against Poland. A few
weeks later, however, on April 23, 2019, Poland moved to
vacate the Clerk’s entry of default and to dismiss Khochinsky’s
claims for lack of jurisdiction based on sovereign immunity.
Two days after that, on April 25, Khochinsky moved for entry
of default judgment.
The district court took up all three motions at once,
granting Poland’s two motions and denying Khochinsky’s.
First, the court found good cause for vacatur of the default,
placing particular emphasis on the meritorious nature of
Poland’s jurisdictional defense. Khochinsky v. Republic of
Poland, No. 18-cv-1532, 2019 WL 5789740, at *4 (D.D.C.
Nov. 6, 2019). Second, and relatedly, the court determined
that, under the Foreign Sovereign Immunities Act (FSIA) it
lacked jurisdiction over Khochinsky’s claims. Id. at *4–7.
Third, in light of its jurisdictional ruling, the court denied
Khochinsky’s motion for default judgment as moot. Id. at *3
n.1.
6
II.
On appeal, Khochinsky challenges the district court’s
dismissal under the FSIA as well as the court’s vacatur of the
default. We reject those challenges.
A.
We first consider the district court’s vacatur of the default,
which we review for abuse of discretion. Gilmore v.
Palestinian Interim Self-Gov’t Auth., 843 F.3d 958, 965 (D.C.
Cir. 2016). Under Federal Rule of Civil Procedure 55(a),
“[w]hen a party against whom a judgment for affirmative relief
is sought has failed to plead or otherwise defend, and that
failure is shown by affidavit or otherwise, the clerk must enter
the party’s default.” Fed. R. Civ. P. 55(a). Here, Poland
initially failed to respond to Khochinsky’s complaint, and the
Clerk of Court entered default against Poland. A few weeks
later, however, Poland moved to vacate the Clerk’s entry of
default pursuant to Rule 55(c), which permits a court to “set
aside an entry of default for good cause.” Fed. R. Civ. P. 55(c).
In exercising its discretion under Rule 55(c), a “district
court is supposed to consider ‘whether (1) the default was
willful, (2) a set-aside would prejudice plaintiff, and (3) the
alleged defense was meritorious.’” Mohamad v. Rajoub, 634
F.3d 604, 606 (D.C. Cir. 2011), aff’d sub nom. Mohamad v.
Palestinian Auth., 566 U.S. 449 (2012) (quoting Keegel v. Key
West & Caribbean Trading Co., 627 F.2d 372, 373 (D.C. Cir.
1980). There is an interest favoring “the resolution of genuine
disputes on their merits,” such that “all doubts are resolved in
favor of the party seeking relief.” Jackson v. Beech, 636 F.2d
831, 835–36 (D.C. Cir. 1980). And that interest is pronounced
in the context of a foreign state desiring to assert defenses based
on its sovereign status. See FG Hemisphere Associates, LLC
7
v. Democratic Republic of Congo, 447 F.3d 835, 838 (D.C. Cir.
2006).
Here, the district court addressed the three primary
considerations, finding that Poland’s default was the result of
confusion rather than willfulness, that Poland’s defense of
sovereign immunity was meritorious, and that Khochinsky
suffered no prejudice from vacatur of the default. Khochinsky
primarily attacks the district court’s finding as to a lack of
willfulness. But “[e]ven when a default is willful, a district
court does not necessarily abuse its discretion by vacating a
default when the asserted defense is meritorious and the district
court took steps to mitigate any prejudice to the non-defaulting
party.” Gilmore, 843 F.3d at 966. That is the case here.
Khochinsky has no colorable argument as to
meritoriousness or prejudice. “[A]llegations are meritorious if
they contain even a hint of a suggestion which, proven at trial,
would constitute a complete defense.” Mohamad, 634 F.3d at
606 (quoting Keegel, 627 F.2d at 374). Poland’s defense
readily meets that standard, and in fact is ultimately
meritorious, as discussed below. As for prejudice, there is no
indication of any cognizable prejudice to Khochinsky from the
vacatur of a default that had been entered a few weeks
beforehand. When given an opportunity to address the point at
oral argument, Khochinsky’s counsel acknowledged the
absence of prejudice. See Oral Argument at 23:30-24:00.
We thus find no basis to set aside the vacatur of the default,
especially given that the defaulting party is a foreign nation
seeking to assert the defense of sovereign immunity. As we
have previously noted, “[i]ntolerant adherence to default
judgments against foreign states could adversely affect this
nation’s relations with nations and undermine the State
Department’s continuing efforts to encourage foreign
8
sovereigns to resolve disputes within the United States’ legal
framework.” FG Hemisphere Associates, 447 F.3d at 838–39
(quoting Practical Concepts Inc. v. Republic of Bolivia, 811
F2d 1543, 1551 n.19 (D.C. Cir. 1987)).
In an effort to bolster his argument that the district court
erred in vacating the entry of default, Khochinsky seeks to
supplement the record on appeal with evidence of a French
court’s October 2019 denial of Poland’s further efforts to
extradite Khochinsky, this time from Paris. That evidence, in
Khochinsky’s view, bears on whether Poland acted willfully in
failing to respond to his complaint in this case. As explained,
however, we sustain the district court’s vacatur of default
regardless of any willfulness on Poland’s part. And at any rate,
the evidence was not before the district court at the time of its
grant of vacatur and thus does not bear on whether the court
abused its discretion. See Ctr. for Auto Safety v. EPA, 731 F.2d
16, 24 n.9 (D.C. Cir. 1984).
Khochinsky raises one additional ground for setting aside
the district court’s vacatur of default: the court’s decision not
to enforce (or even acknowledge) Poland’s failure to comply
with local rules pertaining to the process for seeking vacatur of
a default and to conferring with an opposing party before filing
a nondispositive motion. Noncompliance with those
procedural rules, however, did not prejudice Khochinsky in any
material way. We thus find no abuse of discretion in the district
court’s vacatur of the default.
B.
We now turn to the core of the case: Poland’s assertion of
sovereign immunity from Khochinsky’s claims. We review de
novo the district court’s dismissal of the claims on grounds of
9
sovereign immunity. El Paso Nat. Gas Co. v. United States,
750 F.3d 863, 874 (D.C. Cir. 2014).
The FSIA, 28 U.S.C. §§ 1602 et seq., affords the exclusive
basis for a United States court to obtain jurisdiction over claims
against a foreign state. See Argentine Republic v. Amerada
Hess Shipping Corp., 488 U.S. 428, 443 (1989). The statute
first establishes a baseline grant of immunity, 28 U.S.C.
§ 1604, and then sets out various defined exceptions to that
general grant, id. §§ 1605–07. The result is that courts lack
jurisdiction over a claim against a foreign state unless it “comes
within an express exception.” Price v. Socialist People’s
Libyan Arab Jamahiriya, 389 F.3d 192, 196 (D.C. Cir. 2004).
Khochinsky contends that his claims implicate three FSIA
exceptions: the implied waiver exception, 28 U.S.C.
§ 1605(a)(1); the counterclaim exception, id. § 1607; and the
noncommercial tort exception, id. § 1605(a)(5). We agree with
the district court that none of those exceptions extends to
Khochinsky’s claims.
1.
We first consider the implied waiver exception. Under 28
U.S.C. § 1605(a)(1), a foreign state will not be “immune from
[ ] jurisdiction” in any case “in which the foreign state has
waived its immunity either explicitly or by implication.”
Khochinsky contends that, by requesting his extradition,
Poland implicitly waived its sovereign immunity as to all of his
claims in this case. We disagree.
The FSIA does not specifically define what will constitute
a waiver “by implication,” but our circuit has “followed the
virtually unanimous precedent construing the implied waiver
provision narrowly.” Creighton Ltd. v. Gov’t of Qatar, 181
10
F.3d 118, 122 (D.C. Cir. 1999) (internal quotation marks and
citation omitted). In particular, we “have held that implicit in
§ 1605(a)(1) is the requirement that the foreign state have
intended to waive its sovereign immunity.” Id. (emphasis
added); see Ivanenko v. Yanukovich, 995 F.3d 232, 239 (D.C.
Cir. 2021). And as we have observed, “courts rarely find that
a nation has waived its sovereign immunity . . . without strong
evidence that this is what the foreign state intended.”
Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d
438, 444 (D.C. Cir. 1990) (quoting Frolova v. Union of Soviet
Socialist Republics, 761 F.2d 370, 377 (7th Cir.1985)).
We have found the requisite evidence of a foreign state’s
intent to qualify as an implied waiver of sovereign immunity
“in only three circumstances”: (i) the state’s “executing a
contract containing a choice-of-law clause designating the laws
of the United States as applicable”; (ii) the state’s “filing a
responsive pleading without asserting sovereign immunity”; or
(iii) the state’s “agreeing to submit a dispute to arbitration in
the United States.” Ivanenko, 995 F.3d at 239; see World Wide
Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154, 1161
n.11 (D.C. Cir. 2002). And “courts have been reluctant to stray
beyond these examples when considering claims that a nation
has implicitly waived its defense of sovereign immunity.”
World Wide Minerals, 296 F.3d at 1161 n.11 (internal
quotation marks omitted).
A foreign state’s extradition request does not fit in that
selective company. Extradition operates upon norms of
“international comity.” See Casey v. Dep’t of State, 980 F.2d
1472, 1477 (D.C. Cir. 1992). Extradition treaties
implementing those norms have produced “a global network of
bilateral executive cooperation that aims to prevent border
crossing from becoming a form of criminal absolution.”
Blaxland v. Commonwealth Dir. of Pub. Prosecutions, 323
11
F.3d 1198, 1208 (9th Cir. 2003). Conditioning a foreign state’s
exercise of treaty rights on submitting to the jurisdiction of
United States courts could imperil the spirit of cooperation and
comity underpinning that regime. In that context, there is good
reason to doubt that a foreign state’s effort to exercise its
agreed-upon treaty rights exhibits an intent to relinquish its
immunity from suit. And were we to find that a foreign state’s
extradition request implies a waiver of immunity in United
States courts, we might expect that, as a reciprocal matter, the
United States would subject itself to suit in foreign proceedings
whenever it requests extradition assistance. See id. at 1208 n.6.
We know of no sound basis for putting the parties to an
extradition treaty to that choice as a matter of course.
That is particularly so in view of extradition’s
fundamentally diplomatic, executive character. “Subject to
judicial determination of the applicability of the existing treaty
obligation of the United States to the facts of a given case,
extradition is ordinarily a matter within the exclusive purview
of the Executive.” Shapiro v. Sec’y of State, 499 F.2d 527, 531
(D.C. Cir. 1974), aff’d sub nom. Comm’r v. Shapiro, 424 U.S.
614 (1976). The Executive generally “conducts the procedure
on behalf of the foreign sovereign,” such that the foreign state
“makes no direct request of our courts” and “its contacts with
the Judiciary are mediated by the executive branch.” Blaxland,
323 F.3d at 1207. Because a foreign sovereign operates at a
level of remove from United States courts when it seeks our
assistance in extradition, there is all the more reason to doubt
that an extradition request connotes an intent to waive the
requesting sovereign’s immunity in our courts.
For essentially these reasons, the only other court of
appeals to address the issue held that an extradition request
does not impliedly waive sovereign immunity. Id. at 1206–09.
In reaching that conclusion, the Ninth Circuit in Blaxland
12
distinguished the sole case on which Khochinsky relies here, a
previous Ninth Circuit decision, Siderman de Blake v. Republic
of Argentina, 965 F.2d 699 (9th Cir. 1992). That earlier
decision involved a letter rogatory, which is a “direct court-to-
court request,” whereas “extradition is a diplomatic process
carried out through the powers of the executive, not the
judicial, branch.” Blaxland, 323 F.3d at 1207. While we have
no occasion here to decide the status of a letter rogatory for
purposes of the FSIA’s implied waiver exception, we agree
with the Ninth Circuit that an extradition request does not effect
an implied waiver of sovereign immunity.
The terms of the specific extradition treaty at issue—
between the United States and Poland—suggests no ground for
drawing any different conclusion in the specific circumstances.
The U.S.-Poland Treaty does not directly address the subject of
sovereign immunity against actions in either party’s courts.
Rather, the Treaty generally provides for the signatory
countries to “request extradition . . . through the diplomatic
channel.” Extradition Treaty Between the United States of
America and the Republic of Poland, U.S.-Pol., art. 9, July 10,
1996, T.I.A.S. No. 99-917. And by making use of the Treaty’s
“diplomatic channel” through a request for assistance from the
United States’s Executive Branch, Poland did not subject itself
to the jurisdiction of United States courts.
2.
Khochinsky next argues that two of his claims—the claim
for quiet-title related to Girl with Dove and the claim for aiding-
and-abetting-trespass related to his family land in Przemysl—
fall within the FSIA’s counterclaim exception. Under that
exception, “[i]n any action brought by a foreign state, or in
which a foreign state intervenes,” the “foreign state shall not be
accorded immunity with respect to any counterclaim” fitting
13
within three defined categories. 28 U.S.C. § 1607. Those three
categories include, as relevant here, a counterclaim “arising out
of the transaction or occurrence that is the subject matter of the
claim of the foreign state.” Id. § 1607(b). According to
Khochinsky, the extradition proceeding amounts to an “action
brought by a foreign state” within the meaning of that
provision, and his quiet-title and aiding-and-abetting-trespass
claims arise out of the same “transaction or occurrence” as the
extradition proceeding.
Even assuming that those two claims arise out of the same
transaction or occurrence as the original extradition
proceeding, Khochinsky’s claims simply do not constitute
“counterclaims” for purposes of the FSIA’s counterclaim
exception. Consistent with the ordinary understanding of a
counterclaim, see Fed. R. Civ. P. 13, the counterclaim
exception applies only when there is an “action brought by a
foreign state, or in which a foreign state intervenes,” and when
the ostensible “counterclaim” is brought “in” that same action.
See 28 U.S.C. § 1607 (“In any action brought by a foreign state
. . .”) (emphasis added).
Khochinsky’s claims against Poland satisfy neither
requirement. First, as the district court observed, the
extradition proceeding was brought by the United States, not
Poland, and at no point did Poland “intervene in the extradition
proceeding or appear as a party in the proceeding at all.”
Khochinsky, 2019 WL 5789740, at *6. Second, Khochinsky
brings his current claims in an entirely distinct action, one that
he, not the foreign state, initiated. Those claims, then, are not
counterclaims, much less counterclaims in an action brought
by a foreign state. Khochinsky responds that he was unable to
assert his claims in the original “action,” i.e., the extradition
proceeding. But that only confirms that an extradition
14
proceeding is not the sort of action as to which the FSIA’s
counterclaim exception generally applies.
3.
Third and finally, Khochinsky argues that two of his
claims—the claims for First Amendment retaliation and for
tortious interference with business relations—fall within the
FSIA’s noncommercial tort exception. That exception
potentially applies in any case:
in which money damages are sought against a
foreign state for personal injury or death, or
damage to or loss of property, occurring in the
United States and caused by the tortious act or
omission of that foreign state or of any official
or employee of that foreign state while acting
within the scope of his office or employment.
28 U.S.C. § 1605(a)(5). But even if Khochinsky’s relevant
claims fit within that description, the exception excludes from
its coverage “any claim arising out of malicious prosecution,
abuse of process, libel, slander, misrepresentation, deceit, or
interference with contract rights.” Id. § 1605(a)(5)(B).
Poland contends that Khochinsky’s pertinent claims are
ones “arising out of . . . abuse of process,” id., and we agree.
Khochinsky’s First Amendment retaliation claim asserts that
Poland undertook the extradition process to retaliate against his
speech. Compl. ¶¶ 120, 122, J.A. 18. And his tortious
interference claim contends that Poland’s actions caused him
to be imprisoned and subjected to house arrest. Compl. ¶ 133,
J.A. 19. Both of those claims “arise out of” an alleged “abuse
of process”—i.e., an alleged abuse of the extradition process.
While Khochinsky observes that the two claims are not
15
themselves actions for abuse of process, the statutory language
covers not just claims of abuse of process, but any claims
“arising out of” an alleged “abuse of process.” 28 U.S.C.
§ 1605(a)(5)(B) (emphasis added). That is true of
Khochinsky’s two relevant claims here, both of which “derive
from the same corpus of allegations concerning his
extradition.” Blaxland, 323 F.3d at 1203; see Cabiri v. Gov’t
of the Republic of Ghana, 165 F.3d 193, 200 (2d Cir. 1999).
Khochinsky submits that the term “abuse of process” for
purposes of § 1605(a)(5)(B) refers solely to abuse of judicial
process, whereas extradition is a diplomatic process. But as the
Ninth Circuit observed in Blaxland, a claim against a foreign
state for wrongfully “invoking the extradition procedures”
involves an “abuse of process” within the meaning of
§ 1605(a)(5)(B). Blaxland, 323 F.3d at 1204. Whether the
term “abuse of process” is “defined according to a uniform
federal standard or according to applicable state law”—here,
District of Columbia or New York law—the term “concern[s]
the wrongful use of legal process,” including an alleged effort
to “misuse[] legal procedures to detain” or “extradite”
someone. Id. at 1204, 1206; see Restatement (Second) of Torts
§ 682 (1977) (defining tort of abuse of process); Doe v. District
of Columbia, 796 F.3d 96, 108 (D.C. Cir. 2015) (same under
D.C. law); Curiano v. Suozzi, 469 N.E.2d 1324, 1326 (N.Y.
1984) (same under N.Y. law). And Khochinsky is wrong,
moreover, insofar as he assumes that extradition is an
exclusively diplomatic process, to the complete exclusion of
any judicial role: while extradition, as we have explained, is
fundamentally diplomatic in character, it ultimately involves
the courts in some measure in its execution—as evidenced by
the termination of the extradition proceedings in this case upon
a judicial determination that probable cause was lacking.
16
For all of those reasons, an alleged abuse of the extradition
process counts as an “abuse of process” under § 1605(a)(5)(B).
It follows that Khochinsky’s claims of First Amendment
retaliation and tortious interference fall outside the scope of the
FSIA’s noncommercial torts exception.
* * * * *
For the foregoing reasons, we affirm the district court’s
grant of Poland’s motion to dismiss for lack of jurisdiction.
So ordered.