The First Circuit Court of Appeals has resolved a longstanding and complicated dispute between two congregations over control of the real and personal property of the Touro Synagogue in Newport, Rhode Island. In an opinion by Judge John J. McConnell, Jr., the trial court had found that an implied or constructive trust existed by which a New York Congregation Shearith Israel (CSI) held title to the property for the benefit of the Newport Rhode Island Congregation Jeshuat Israel (CJI). Congregation Jeshuat Israel v. Congregation Shearith Israel, 186 F.Supp.3d 158 (D.R.I. 2016), rev'd, 2017 WL 3276805 (1st Cir. 2017). That opinion enforced Rhode Island property law and reviewed objective evidence of the parties' relationship to find that the New York congregation held the property for the benefit of the Newport congregation. In an opinion by Justice Souter, the First Circuit reversed on the ground that the First Amendment requires courts to refrain from involvement in religious disputes and that the best way to do that is for them to enforce formal agreements and deeds that assign ownership rather than analyzing relationships or informal expectations. Congregation Jeshuat Israel v. Congregation Shearith Israel, 2017 WL 3276805 (1st Cir. 2017).

The dispute arose because the Newport congregation sought to raise money for the synagogue by selling rimonim — ceremonial silver/gold finials used to decorate the Torah that were created by silversmith Myer Myers in the mid-eighteenth century — to the Boston Museum of Fine Arts for $7 million. The New York congregation was from the Sephardic tradition while the Newport congregation was from the Ashkenasi tradition. CSI (the New York congregation) believed that religious objects like rimonim cannot ever be sold.

While it makes sense for the courts to stay out of disputes over religious doctrine, it is not necessarily clear that reliance on formal documents is the best or only way to ensure that secular, rather than religious, doctrines are being used to settle disputes. The First Circuit cited no Rhode Island law (either statutory or common law) for its result and if the trial judge is correct, that means the First Circuit assigned the property to the congregation that would not have had legal control if the parties had been nonreligious organizations. If that is so, then it is unclear what law is being applied to assign property rights in the case; it is not religious law, nor is it state property law, nor is it some federal code of property law other than a federal common law notion that property gets allocated only by formal title alone. But there is no federal common law rule of that type other than a First Amendment norm to stay out of religious disputes. 

While eschewing state involvement in religious disputes is a laudable goal, applying an oversimplified and inaccurate version of property law (that no jurisdiction adopts) is not necessarily a good way to achieve that goal. Judge McConnell's ruling did not take sides in a religious dispute; rather he applied state property law to the facts before him in a manner that was consistent with the evidence and not unreasonable. The First Circuit's conclusion that it was unreasonable for the trial judge to look beyond the formal documents substituted its own conception of property law for that in the state of Rhode Island which is the only property law that is relevant to the case unless one used conflict of laws principles to apply New York rather than Rhode Island law.

Cases involving control of Catholic property ordinarily are resolved by reference to formal title only because the Catholic Church is itself organized in a hierarchical manner and local parishes are not independent congregations from the formal structure. Jewish congregations and many Protestant congregations, on the other hand, do not have a hierarchical organization and application of state property law would not necessarily interfere with internal religious beliefs. Application of state property law involves deference to state law makers (judges or legislators) who have developed nuanced systems of property law to adjudicate complex relationships.  Ignoring such state laws and focusing only on formal documents (with no exceptions at all) enacts and enforces a system of property law that no state actually adopts.