Congregation Jeshuat Israel v. Congregation Shearith Israel, 2017 U.S. App. LEXIS 14181

Background

Two historic congregations: Congregation Yeshuat/Jeshuat Israel (Newport, later CJI) and Congregation Shearith Israel (New York, CSI). Rimonim (silver Torah finials) were made for Touro Synagogue and used in worship; real estate for Touro was acquired in 18th century.
After Newport’s Jewish population declined (post‑Revolution/War of 1812), CSI took custody of movable property (including the rimonim) and maintained the Synagogue intermittently; Newport’s modern congregation (CJI) reemerged in the late 19th century and resumed services when CSI returned the rimonim.
In 1903, following litigation, CSI and CJI executed a settlement and a five‑year lease (renewed 1908) under which CSI (signed as “trustees”) leased the synagogue and its “paraphernalia” to CJI for a nominal rent, with conditions requiring Sephardic ritual practice and approval of ministers.
Additional agreements: a 1945 tripartite preservation agreement with the Secretary of the Interior (referenced a recorded 1894 “Deed of Trust” but provided no clear trust terms), and a 2001 agreement with the National Trust describing CJI as lessee and CSI as owner.
In 2011 CJI sought to sell the rimonim (offer >$7M); CSI objected claiming ownership and that Sephardic tradition forbids sale. Litigation followed: CJI sought declaratory relief and permission to sell; CSI counterclaimed asserting ownership of the rimonim and the real property (and that any trust restrictions bar the sale).
After a bench trial the district court found CJI owned the rimonim and that CSI held the Synagogue as a charitable trustee for worshipers in Newport; the First Circuit reversed, applying neutral‑principles analysis to written instruments.

Issues

Issue	Plaintiff's Argument (CJI)	Defendant's Argument (CSI)	Held
Ownership of the rimonim	CJI: rimonim belong to Newport congregation and CJI may sell them	CSI: CSI owns ritual objects and sale is barred by Sephardic tradition and trust duties	CSI owns the rimonim free of any trust to CJI; CJI at most a holdover lessee
Ownership of real property / existence of trust	CJI: property held for worshipers in Newport; CSI is trustee	CSI: fee owner (or trustee) with authority; any historic deeds ambiguous	CSI is fee owner of Touro Synagogue and land; no civilly enforceable trust in favor of CJI
Proper judicial approach given First Amendment	CJI relied on historical practice and equitable considerations to support its claims	CSI argued contractual and historical documents support its title and restrictions	Court must rely on neutral principles (deeds, leases, contracts) and avoid entanglement; neutral‑principles resolve dispute in CSI’s favor
Interpretation of 1903 settlement/lease (including “paraphernalia”)	CJI: lease/settlement left rimonim with CJI or created trust; paraphernalia ambiguous	CSI: 1903 instruments recognized CSI title and leased premises (and paraphernalia) to CJI as tenant	Lease language (and common meaning of “paraphernalia”) supports CSI ownership of rimonim; lease created landlord‑tenant relationship, not trust

Key Cases Cited

Jones v. Wolf, 443 U.S. 595 (court should decide church property disputes using neutral principles where possible)
Serbian E. Orthodox Diocese for the U.S. & Can. v. Milivojevich, 426 U.S. 696 (First Amendment limits civil intrusion into ecclesiastical decisions)
Presbyterian Church in the U.S. v. Mary Elizabeth Blue Hull Mem'l Presbyterian Church, 393 U.S. 440 (courts must avoid entanglement; use neutral principles and express instruments)
Watson v. Jones, 80 U.S. (13 Wall.) 679 (civil courts to enforce express terms of deeds, wills, and instruments in church property disputes)
Soc'y of Holy Transfiguration Monastery, Inc. v. Gregory, 689 F.3d 29 (1st Cir. 2012) (reiterating neutral‑principles approach in religious property disputes)
David v. Levy, 119 F. 799 (D.R.I. 1903) (earlier litigation between these parties underlying later settlement)