Congregation Jeshuat Israel v. Congregation Shearith Israel , 892 F.3d 20 ( 2018 )

United States Court of Appeals
For the First Circuit
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No. 16-1756
CONGREGATION JESHUAT ISRAEL,
Plaintiff, Appellee,
v.
CONGREGATION SHEARITH ISRAEL,
Defendant, Appellant.
__________________
Before,
Howard, Chief Judge,
Souter, Associate Justice,
Torruella, Baldock,  Lynch, Thompson, Kayatta, and Barron, Circuit Judges.
__________________
ORDER OF COURT
Entered: June 7, 2018
Appellee Congregation Jeshuat Israel's (CJI) petition for rehearing having been denied by
the panel of judges who decided the case, and the petition for rehearing en banc having been
submitted to the active judges of this court and a majority of the judges not having voted that the
case be heard en banc, it is ordered that the petition for rehearing and the petition for rehearing en
banc be denied.
SOUTER, Associate Justice, joined by Baldock and Lynch, Circuit Judges, statement
regarding denial of panel rehearing.
The panel includes the following response in the panel's vote to deny rehearing.
The rehearing petitioner, CJI, appears to assert at one point (p. 8) that the panel opinion
holds that in litigation of religious property disputes "the trier-of-fact must consider only 'deeds,
charters [and] contracts,' to the exclusion of all other secular evidence." This is an erroneous
characterization of the panel opinion, which holds only that when such items of evidence "and the
like are available and to the point . . . they should be the lodestones of adjudication in these cases."

Hon. David H. Souter, Associate Justice (Ret.) of the Supreme Court of the United States,
sitting by designation.

Hon. Bobby R. Baldock, Circuit Judge of the United States Court of Appeals for the
Tenth Circuit, sitting by designation.
The holding does not otherwise purport to impose any categorical limitation on competent
evidence in such cases.
Both CJI and the Attorney General of Rhode Island, in the brief supporting CJI, misstate
that the panel opinion holds that CSI is free of any trust obligation as owner of the real and personal
property subject to dispute. The court holds no such thing. The opening paragraph summarizes
the holding that CSI holds the property "free of any civilly cognizable trust obligations to CJI"
(emphasis added), and the more detailed conclusions at the end, in part III, state the holding to be
"as between the parties in this case." The opinion does not address the possibility of a trust
obligation to a non-CJI Newport "Jewish society" as beneficiary. No such claimant was a party in
the litigation, and no such issue was resolved explicitly or implicitly by the panel. As indicated
above, the opinion neither states nor implies any particular limitation on the scope of admissible
evidence in any further litigation brought by a trust claimant other than CJI. In sum, the panel
holding is consistent with the Attorney General's observation that CJI may not be the exclusive
beneficiary of any trust there may be, and the holding is limited to the present parties, their
controversies and their particular, contractual and contractually documented relationship.
The mischaracterization of the holding as applying to possible claimants other than CJI
leads to a further assertion by the Attorney General that the (erroneously characterized) global
ruling that CSI has no possible trust obligation to anyone or to any "Jewish society" other than CJI
violates the Rhode Island rule of trust common law, that one public charitable trust beneficiary
cannot effectively consent to the termination of the trust, to the prejudice of any other beneficiaries.
Since the erroneous statement about the scope of the panel's holding is the premise for invoking
this rule of trust law, the rule has no application.
With respect to the dissent from denial of en banc rehearing, the panel notes that the scope
of its review of the trial court's findings is limited by the dispositive significance of the record
evidence of the present parties' contractually established relationship. Accordingly, the panel
holding of that dispositive character under controlling federal law in this case implies no limitation
on the relevance of any rule of Rhode Island law or of any item of evidence that might be raised
or offered by a party other than CJI in support of a claim to a trust benefit, the possible details of
which are not before us.
THOMPSON, Circuit Judge, dissenting from the denial of rehearing en banc.
I dissent from the order denying the petition for rehearing en banc because I am concerned
that my colleagues' opinion thwarts our well-established standard of review for a district court's
decision following a bench trial and because my colleagues haven't discussed long-standing Rhode
Island law that could lead to different legal conclusions in the fact-intensive issues presented by
this difficult case.
On a de novo review, a panel is certainly entitled to engage in a different analytical
approach to the legal issues than that explored by the trial judge. But the panel engages its review
without first establishing how the trial judge's findings of fact clearly erred. This strikes me as at
odds with our established standard of review when we are presented with a decision issued after a
bench trial. Traditionally, questions of law are determined de novo, but factual findings are
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reviewed for clear error only. Kosilek v. Spencer, 774 F.3d 63, 98 (1st Cir. 2014) (en banc)
(Thompson, J. dissenting) (citing Wojciechowicz v. United States, 582 F.3d 57, 66 (1st Cir. 2009)).
To that end, we are supposed to "accept the court's factual findings, and the inferences drawn from
those facts, unless the evidence compels us to conclude a mistake was made." Id. (citing Janeiro
v. Urological Surgery Prof'l Ass'n, 457 F.3d 130, 138 (1st Cir. 2006)). When an appeal presents
issues that involve both legal and factual inquiries, our review slides along a continuum; "[t]he
more fact-intensive the question, the more deferential our review" whereas "the more law-
dominated the query, the more likely our review is de novo." Id. (citing Johnson v. Watts
Regulator Co., 63 F.3d 1129, 1132 (1st Cir. 1995)).
As the trial judge's decision shows, this case is clearly fact intensive and involves events
and documents that go back a few centuries. While the panel credits him for his "conscientious
and exhaustive historical analy[tical]" approach to the competing claims and for "scrupulous[ly] .
. . avoiding any overt reliance on doctrinal precepts," it then engages in a de novo review of the
entire case without demonstrating any deference to his findings of fact and without declaring, never
mind demonstrating, that the trial judge's findings of fact are clearly wrong. After acknowledging
the trial judge's effort, they pivot to their analysis with a simple "[t]hese are circumstances in which
we think that the First Amendment calls for a more circumscribed consideration of evidence than
the trial court's plenary enquiry into centuries of the parties' conduct by examining their internal
documentation that had been generated without resort to the formalities of the civil law."
The panel proceeds to emphasize secular documents such as deeds, charters, contracts, and
the like as "the lodestones of adjudication" in cases such as this one where the court is tasked with
resolving a property dispute while dodging improper entanglement in a religious controversy.
Indeed, the trial judge's comprehensive and thorough decision highlights several such documents
that are part of the voluminous record in this case. But the panel only picked four contracts to
support its conclusion that "CSI owns both the [R]imonim and the real property free of any civilly
cognizable trust obligations to CJI": a settlement agreement from earlier litigation between CSI
and CJI; a lease between the parties; an agreement between the parties and the then-Acting
Secretary of the Interior about the preservation of the property as one of national historical
significance; and an agreement between CJI, the Society of Friends of Touro Synagogue, and the
National Trust for Historic Preservation spelling out the terms for operating the property as a
historic site. While diving deep into these four contracts, the panel summarily dismisses a couple
of documents the trial judge had relied on, including legislation passed in 1932 by the Rhode Island
General Assembly and a series of deeds signed in 1894. And nowhere does it mention a 1787 will
that the trial judge had found was "incontrovertible evidence that Touro Synagogue was owned in
trust."
An examination of some of the other secular documents upon which the trial judge relied
confirms my belief that this case should be reheard by our entire court. I'll start with legislation
passed by the Rhode Island General Assembly in 1932. The panel's conclusion that CSI owns the
Touro synagogue, property, and Rimonim "free of any trust or other obligation to CJI . . ." flies in
the face of the plain language of this 1932 legislation. In that year, the Rhode Island General
Assembly passed "an act exempting from taxation certain property in the city of Newport held in
trust for the Congregation Jeshuat Israel." If the title of the legislation wasn't enough of an
indication that CJI is a beneficiary of a trust, section 1 says:
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The property located on the corner of Touro and Division streets in the city of
Newport held in trust for the benefit of the Congregation Jeshuat Israel and used by
said congregation for religious and educational purposes is hereby exempted from
all taxes assessed by the city of Newport as long as said property shall be used by
said congregation for religious and educational purposes. (Emphasis added.)
Clearly the trust mentioned in the title of the legislation refers to the Touro synagogue and the real
property on which it sits. This legislation, passed after the 1903 litigation settlement agreement
and the 1903 lease contract, clearly indicates that the state of Rhode Island considers the property
to be held in trust for the benefit of CJI.
In a footnote, the panel acknowledged that this legislation was relevant to determine the
appropriate resolution to the property dispute, but quickly dismissed its significance because the
act did not "reveal whether the trustees were those of CSI or CJI itself, let alone what difference it
would make in this litigation." I have three problems with the panel's cursory dismissal of this
evidence. First, the panel doesn't acknowledge the act's express statement that the property was
held in trust for the benefit of CJI. Second, the panel does not conclude that the trial judge clearly
erred by relying on this evidence to support a trust in which CJI was the beneficiary. Third, and
most important, the Rhode Island Supreme Court has always been clear that it would not "permit
a valid charitable trust to fail for want of a competent trustee, but [would] appoint a trustee to carry
out the charitable intent of the testator." Taylor v. Salvation Army, 49 R.I. 316, 142 A. 335, 336
(1928) (citing Tillinghast v. Council at Narragansett Pier, R.I., of the Boy Scouts of America, 47
R.I. 406, 133 A. 662 (1926); Guild v. Allen, 28 R.I. 430, 67 A. 855 (1907); Wood v. Fourth Baptist
Church, 26 R.I. 594, 61 A. 279 (1905)). While the "incompetent trustee" in Taylor was a reference
to an unincorporated association, the principle is clear: the court will not overlook an otherwise
valid charitable trust for want of a trustee. One can always be appointed by the court.
The 1945 property preservation agreement between CJI, CSI, and the Acting Secretary of
the Interior (one of the contracts that the panel relied on) referred to "deed[s] of Trust" from 1894.
As the trial judge explained, these deeds purported to convey the interest of the original property
trustees' descendants to CSI. While there wasn't an express statement in the 1894 deeds that the
property held in trust was for the benefit of the Jewish congregation in Newport, several of the
deeds did mention that the property was held "in trust." The panel claims that the deeds lack any
significance for this case:
At best, the deeds may collectively have had some rhetorical value for CSI in
dealing with the tensions between it and the new congregation of CJI; as the district
court noted, the deeds contained the first statements of what later became the lease
condition that worship at Touro conform to Sephardic practice as observed by CSI.
The upshot is that the record fails to show that the references to a trust obligation
on CSI's part to the worshipers at Touro were anything more than terms of empty
conveyances. They are, moreover, unsupported by evidence of the sort preferred in
applying neutral principles meant to keep a court from entanglement.
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While the deeds may not contain an express statement of the details of the trust, it is relevant
evidence that a trust exists.
As CJI points out in their petition for rehearing, the panel's decision completely ignores a
will considered and relied upon by the trial judge. In Jacob Rodrigues Rivera's will, dated 1787,
he wrote:
I have no exclusive Right, or Title, Of, in, or to the Jewish Public Synagogue, in
Newport, on Account of the Deed thereof, being made to Myself, Moses Levy &
Isaac Harte, which Isaac Harte, thereafter Conveyed his One third Part thereof to
me, but that the same was so done, meant and intended, in trust Only, to and for the
sole Use, benefit and behoof of the Jewish Society, in Newport, to be for them
reserved as a Place of Public Worship forever . . . .
If anything, the 1932 legislation is consistent with the express acknowledgment in this will that a
trust exists for the "benefit and behoof" of the Jewish Society in Newport. In 1787, this society
was not formally known as CJI because, as the trial judge explained, religious organizations were
not granted charters at that time, which was why three individuals were named owners of the
property on the deed. But in 1894, CJI received a charter from the General Assembly, recognizing
it as a corporation under Rhode Island laws.
I am also concerned about the precedent that the panel's decision sets for future property
disputes between religious entities. In its statement, the panel is clear that there is no "categorical
limitation on competent evidence" in the "litigation of religious property disputes," but after laying
out the intricacies of adjudicating property disputes between religious entities and emphasizing the
types of documents on which the courts should focus, the panel relies on the formal contracts to
the exclusion of these other documents. The result is that the panel's decision implies that when
contracts are available, they should be relied on to the exclusion of other relevant and potentially
dispositive evidence such as wills and charters, even though the panel's opinion indicates that these
documents can be just as significant as contracts. Future parties arguing over religious properties
and courts adjudicating the next religious property dispute who look for precedential guidance
about how to avoid unnecessary entanglement in religious doctrine are receiving conflicting
messages on this point.
The panel has tried to carve a very narrow holding, emphasizing that its conclusions only
apply to the lack of any obligation to CJI by CSI as owner of the subject property. The panel
clarifies in its statement that "[t]he opinion does not address the possibility of a trust obligation to
a non-CJI Newport 'Jewish society' as beneficiary." Here again, though, the panel's conclusions
contradict findings of fact made by the trial judge -- e.g., that CJI is currently the only established
Jewish congregation in Newport -- but without first concluding that the trial judge's finding is
clearly erroneous. So if there is a real possibility that CSI owns the property but with trust
obligations to some other entity, then, as a practical matter, to whom might CSI owe these
obligations? Who would have standing to claim status as a bona fide beneficiary and not be
precluded from litigating their claims? An individual Newport resident who worships at CJI but
who is not a member of CJI? A congregation in a neighboring town to Newport who wants to use
the sacred, historical site for religious or educational activity? I am concerned that any future
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litigants who are tied to worship at the Touro Synagogue could struggle to survive a res judicata
challenge based on the identity of parties prong of such a defense.
I am also concerned that my colleagues have completely omitted any discussion of Rhode
Island's extensive case law pertaining to charitable trusts. A rehearing en banc would have
provided us with the opportunity to explore how Rhode Island law, when applied to the mountain
of secular evidence available here, would have affected my colleagues' conclusions about whether
CSI is holding the property in trust for the benefit of CJI.
Finally, I also believe the panel's holding that CSI owns the Rimonim outright represents
a deviation from Rhode Island's law about presumption of ownership arising by implication from
continuous possession. The trial judge found that "[o]ne of the few undisputed facts in this
litigation is that for over 100 years, the Rimonim have been in the possession of [CJI]." Without
concluding that the trial judge clearly erred in his finding or addressing long-standing Rhode Island
law that a presumption of ownership arises from continuous possession, the panel concludes that
the Rimonim are owned outright by CSI because the 1903 lease agreement included the
synagogue's "paraphernalia" and the Rimonim had been in use at the synagogue for a long time.
Accordingly, I conclude that this case is worthy of en banc review on both prongs of Fed.
R. App. P. 35(a). The panel's deviation from our traditional standard of review for a trial judge's
decision following a bench trial invokes Rule 35(a)(1). The implications of this opinion for future
disputes over religious property in general, as well as the subject property of this dispute
specifically, invokes Rule 35(a)(2). As a result of these concerns, I dissent from the denial of en
banc review.
By the Court:
/s/ Margaret Carter, Clerk
cc:
Hon. John J. McConnell
Hanorah Tyer-Witek, Clerk, United States District Court for the District of Rhode Island
Steven Earle Snow
Jonathan Mark Wagner
Gary Naftalis
Daniel P. Schumeister
Tobias Jacoby
John F. Farraher Jr.
Louis Mark Solomon
Deming E. Sherman
Colin A. Underwood
Krystle Guillory Tadesse
Nancy Lauren Savitt
Adam J. Sholes
Chrisanne E. Wyrzykowski
Eric C. Rassbach
Rachel Busick
Diana Verm
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