## Facts

- Descendants of the Magness family alleged that, in 1918, the Soviet government expropriated their piano factory and mansion in St. Petersburg.
- Plaintiffs also alleged that Russian authorities expropriated several antique pianos belonging to the family during the 1990s.
- After an unsuccessful effort in 1994 to regain the real estate through meetings with local officials, plaintiffs sued in federal court in 1997.
- Plaintiffs sought damages and emergency relief to prevent a traveling exhibition of Russian jewels from leaving the jurisdiction.
- Defendants included the Russian Federation, the Russian Ministry of Culture, and the Russian State Diamond Fund.
- The district court set a service deadline; plaintiffs attempted service by (1) serving attorneys who appeared at a hearing, (2) serving the Texas Secretary of State with forwarding instructions, and (3) using forwarding instructions through the Texas Secretary of State and the U.S. State Department while mailing papers to a Russian official in Moscow.
- The record did not reliably establish who received and reviewed the mailed papers within the Russian entities.
- The district court treated the attempts as sufficient, concluded it had jurisdiction under the FSIA, and entered a default judgment of roughly $234 million plus interest against the Russian defendants.

## Issues

1. Whether service on a foreign state or political subdivision under FSIA § 1608(a) requires strict compliance with the statute’s ordered methods.
2. Whether service on an agency or instrumentality under FSIA § 1608(b) may be upheld on a substantial-compliance/actual-notice theory.
3. Whether the plaintiffs’ service efforts supported the default judgment against the Russian defendants.

## Decision

- The Fifth Circuit vacated the default judgment and remanded.
- The court held that FSIA § 1608(a) requires strict compliance for service on a foreign state and its political subdivisions.
- The court held that FSIA § 1608(b) permits substantial compliance for agencies or instrumentalities if service results in actual notice of the suit and its consequences.
- Because service did not satisfy § 1608(a), and the record did not support effective notice sufficient to sustain the default judgment, the judgment could not stand.

## Legal Principles

- Proper service under the FSIA is a prerequisite to a binding default judgment against a foreign sovereign defendant.
- FSIA § 1608(a) imposes a mandatory, hierarchical sequence of service methods for a foreign state or political subdivision; courts may not replace that scheme with a general substantial-compliance standard.
- FSIA § 1608(b) allows more flexible methods for agencies or instrumentalities, and substantial compliance may suffice where service is reasonably calculated to give—and in fact provides—actual notice.
- Heightened formality for service on foreign states reflects statutory text and concerns tied to sovereign dignity and the federal government’s foreign-affairs responsibilities.

## Conclusion

The Fifth Circuit set aside a large default judgment because the plaintiffs failed to strictly comply with FSIA § 1608(a) when serving the Russian Federation and its ministry, and the service record did not justify enforcing the judgment; the case was remanded to permit proper service consistent with the FSIA’s distinct rules for foreign states and their agencies or instrumentalities.


Magness v. Russian Federation, 247 F.3d 609 (5th Cir. 2001)