U.S. Asks Judge to Void Libel Award on Izvestia

Lawyers representing two Soviet agencies and the U.S. government called on a Los Angeles federal court judge Wednesday to vacate a $413,000 libel judgment won by a Palo Alto businessman after he sued the newspaper Izvestia for calling him a spy.

Martin Popper, a New York-based attorney representing the Soviet defendants, cited the Foreign Sovereign Immunities Act and argued that District Judge David V. Kenyon lacked jurisdiction to enter a judgment in favor of businessman Raphael Gregorian.

Libel suits against foreign sovereigns are specifically precluded by the act, approved by Congress in 1976, Popper said. If the court does not have jurisdiction, he said it follows that Kenyon’s default judgment against the Soviet newspaper must be vacated.

Seeks to Dispel Notion

Department of Justice attorney Elizabeth Sarah Gere, representing the United States, sought to dispel any notion that the Soviet Union had asked the State Department to join in a request to dismiss the libel judgment.

Gere told the court that she agreed with Popper’s contention that libel suits against sovereign nations are forbidden under U.S. law, and she said the law must be interpreted correctly to prevent diplomatic problems with other nations.

But Gregorian’s attorney, Gerald Kroll, insisted that Soviet agencies such as Izvestia are not exempt from libel action under the Foreign Sovereign Immunities Act because they engage in commercial business within the United State.

Kenyon found for Gregorian, 57, owner of a medical equipment firm, in a default judgment issued last summer. The Soviet defendants did not contest the $320-million suit Gregorian filed in 1985, claiming that they were immune from suit.

Gregorian claimed that Izvestia had falsely accused him of spying, and as a result, his 14-year business of exporting medical and laboratory equipment to the Soviet Union had been virtually wiped out.

It was only after more than $450,000 in funds belonging to the Soviet Union’s Bank for Foreign Trade were frozen last November to satisfy Gregorian’s judgment that the Soviet agencies sought to oppose Gregorian’s suit in court.

‘Criminal Conduct’

Popper charged Wednesday that Gregorian had “engaged in serious criminal conduct” within the Soviet Union and, as a result, his license to to do business had been withdrawn by the Ministry of Foreign Trade. Izvestia published a story about Gregorian’s losing his license.

The Soviet government feels strongly about exercising absolute sovereignty over events taking place within its borders and believes that no foreign court has jurisdiction in that type of case, Popper said.

However, he said, in order to alleviate tensions in commercial relations between the United States and the Soviet Union, the two Soviet agencies agreed to a U.S. State Department request to hire lawyers and raise the immunity issue before Kenyon.