Russia's President Putin attends a meeting with members of the All-Russian People's Front group to discuss issues on education in Penza

A U.S. judge has fined the Russian Federation $43.7 million for ignoring a 2010 federal court order to return a collection of Jewish religious texts to the Chabad-Lubavitch Hasidic group, sharpening a long-running diplomatic feud that has drawn the ire of President Vladimir Putin.

The Chabad group, based in Brooklyn, has sought for decades to get back the Schneersohn collection of 12, 000 books and 25, 000 documents assembled by its religious leaders over two centuries and held in Russia since World War II.

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The group filed suit in 2004. Russia withdrew from the case in 2009, declaring that the court had no jurisdiction, and threatened to retaliate against any U.S. government efforts to enforce a $50, 000-a-day fine the federal court ordered in 2013.

On Thursday, U.S. District Judge Royce Lamberth sanctioned Russia despite objections by the U.S. State and Justice departments that the action could impede a settlement or worsen diplomatic relations.

“The court is not persuaded that retaliatory ‘tit-for-tat’ litigation against the United States should be the basis for shirking its responsibility to make rulings consistent with law, ” Judge Lamberth wrote. “It would be a troubling precedent, indeed, to disregard the law and rule as the department prays.”

Although it remains unlikely that the court penalty will be paid, the order strengthens the Chabad group’s ability to pursue Russian assets. For example, Chabad has subpoenaed information about Russian holdings from the U.S. arm of Russia’s largest bank, Sberbank, which was a target of U.S. sanctions.

Judge Lamberth’s order adds an irritant to Russian-U.S. relations already roiled by Kremlin actions in Ukraine. The Obama administration has imposed several rounds of sanctions, including freezing $640 million of assets since March 2014 held in the U.S. by Russian banks controlled by three billionaire friends of Mr. Putin, The Wall Street Journal reported.

A spokesman for the Russian Embassy in Washington, D.C., declined to comment on the latest court ruling in the Chabad case.

In January 2013, Russia’s foreign ministry called fines in the Chabad case “absolutely unlawful and provocative, ” adding, “We have repeatedly stated that this verdict is extraterritorial in character, contradicts international law and is legally void.”

The ministry called the collection a “national treasure of the Russian people, ” adding that Moscow “will have to take a tough response” if Russian state property is seized in the U.S.

The Russian government has previously reacted to the case by barring state-run museums, including the Hermitage in St. Petersburg and the Pushkin Museum of Fine Arts in Moscow, from lending artworks to American museums. The National Gallery of Art’s 2014 exhibit of Edgar Degas and Mary Cassatt, for example, did not include two Pushkin holdings, Degas’ “Blue Dancers” or a Cassatt version of “Mother and Child.”

The Lubavitch movement of Orthodox Judaism began in western Russia in 1775, and the collection is named for two of its leaders: Rabbi Sholom Dovber Schneersohn and his son, Rabbi Joseph Isaac Schneersohn. The books, documents and other materials in the collection make up “the community’s organizational records and spiritual history, ” whose importance to the Chabad group “can hardly be overstated, ” the group’s attorneys have argued.

During World War I, as the German army advanced, the elder Schneersohn placed the books in storage. But the Soviet government later seized the library, which remains in Russian hands. A document archive was taken by the Nazis and then by the Soviet Army during World War II.

In 1991, a court in Moscow ordered that the collection be returned, but Russian authorities set aside the judgment after the Soviet regime collapsed.

The U.S. lawsuit was brought in 2004 by Agudas Chasidei Chabad, an organization created by the son-in-law of the junior Schneersohn, Menachem Mendel Schneerson, the Lubavitch movement’s seventh and last leader.

Attorneys for the Chabad group said the recent ruling could help restart negotiations by giving the group access to state and federal courts to attempt to locate and seize Russian assets, including those identified by the U.S. government.

“Hopefully, if we are able to identify and attach a sufficient amount … that will incentivize the Russian Federation to return the stolen books, ” said Steven Lieberman, a lawyer for Chabad with Rothwell, Figg, Ernst & Manbeck.

Pressure from the litigation, he said, is “the only thing that has moved the Russians and brought them to the table in the past, ” including a month after Judge Lamberth’s 2013 ruling.

Then, Chabad representatives were invited to meet in Moscow with a former Russian ambassador to the U.S., Judge Lamberth noted. The meeting yielded a proposed resolution; however, Mr. Putin rejected it and announced that the Russian State Library was moving its share of the collection from an annex to a department under the library’s control at the Jewish Museum and Tolerance Center in Moscow, Judge Lamberth wrote. The museum was celebrated by Chabad of Russia.

“The only additional responses of which the court is aware are the bellicose statements of the Russian President, Vladimir Putin, and tit-for-tat litigation instituted in Russian courts, ” Judge Lamberth wrote. “The time has come to give plaintiff some of the tools to which it is entitled under law.”

A U.S. Justice Department spokeswoman declined to comment about the case. A U.S. State Department representative has said to the U.S. Court that Chabad’s pursuit of the litigation will harm U.S.-Russian relations and resolution of the dispute.