Congregation Shearith Israel v. Congregation Jeshuat Israel
Filing
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OPINION. For the reasons in this Opinion, this case is dismissed in favor of the first-filed action. re: 27 MOTION to Dismiss or in the alternative, transfer this action to the United States District Court for the District of Rhode Island filed by Congregation Jeshuat Israel. (Signed by Judge Miriam Goldman Cedarbaum on 1/30/2014) (rjm)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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CONGREGATION SHEARITH ISRAEL,
Plaintiff,
OPINION
-against12 Civ. 8406 (MGC)
CONGREGATION JESHUAT ISRAEL,
Defendant.
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APPEARANCES:
EDWARDS WILDMAN PALMER LLP
Attorneys for Plaintiff
2800 Financial Plaza
Providence, Rhode Island 02903
-and750 Lexington Avenue
New York, New York 10022
By:
Deming Eliot Sherman, Esq.
Anthony Joseph Viola, Esq.
Zachary Winthrop Silverman, Esq.
CADWALADER, WICKERSHAM & TAFT LLP
Attorneys for Plaintiff
One Financial Center
New York, New York 10281
By:
Louis M. Solomon, Esq.
Solomon B Shinerock, Esq.
KRAMER LEVIN NAFTALIS & FRANKEL LLP
Attorneys for Defendant
1177 Avenue of the Americas
New York, New York 10036
By:
Gary P. Naftalis, Esq.
Jonathan Mark Wagner, Esq.
Tobias B. Jacoby, Esq.
PARTRIDGE SNOW & HAHN LLP
Attorneys for Defendant
180 South Main Street
Providence, Rhode Island 02903
By:
Steven Earle Snow, Esq.
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Cedarbaum, J.
Congregation Shearith Israel (“CSI”), a New York Jewish
congregation and corporation, sues Congregation Jeshuat Israel
(“CJI”), a Rhode Island Jewish congregation and corporation,
over the ownership of a pair of silver finial bells called
rimonim.
The rimonim traditionally adorn the Torah during
Jewish religious services.
The dispute over this particular
pair of rimonim arose after CJI entered into a conditional
agreement to sell the rimonim to the Museum of Fine Arts in
Boston for over $7 million.
CJI moves to dismiss the complaint
for lack of personal jurisdiction and, in the alternative, to
transfer this case to the District of Rhode Island, where a
parallel action brought by CJI against CSI is pending.
For the
following reasons, the case is dismissed pursuant to the firstfiled rule.
BACKGROUND
CSI, which follows the Orthodox Jewish ritual of the
Spanish and Portuguese Jews, is the oldest Jewish congregation
in North America.
A few years after CSI was founded in New
York, Jews of Spanish and Portuguese heritage began to settle in
Newport, Rhode Island.
This community was organized throughout
the eighteenth century under the name Congregation Yeshuat
Israel -- a congregation that CSI alleges is distinct from
Congregation Jeshuat Israel, the defendant.
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In 1763, a
synagogue, now known as Touro Synagogue, was consecrated in
Newport.
CSI alleges that throughout the eighteenth century,
Torah scrolls loaned by CSI were used in Touro Synagogue, and
that Congregation Yeshuat Israel possessed two pairs of rimonim,
crafted by the silversmith Myer Myers.
In the early 1800s, the number of Jewish residents in
Newport diminished and Congregation Yeshuat Israel ceased to
exist.
From approximately 1822 to 1880, Touro Synagogue was
rarely open, and during this time CSI was involved in the
maintenance of Touro Synagogue.
During the last twenty years of
the nineteenth century, however, the Jewish community in Newport
experienced a revival.
A schism within the community quickly
followed this revival, creating the organization of the
defendant, CJI, and another organization, known as Touro
Congregation.
The competition between the two congregations eventually
led to litigation over Touro Synagogue.
In 1902, the matter was
resolved, and CSI was found to own Touro Synagogue, as well as
its real and personal property.
CSI then entered lease
agreements with CJI in 1903 and 1908, renting to CJI the Touro
Synagogue and related religious articles for one dollar per
year.
The leases conveyed an interest in not only the synagogue
but also “the appurtenances and paraphernalia belonging
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thereto,” which CSI alleges included the pair of rimonim at
issue here.
In June of 2012, CSI learned that CJI had entered into a
conditional agreement to sell the rimonim for over $7 million to
the Museum of Fine Arts in Massachusetts, where the rimonim are
currently on display.
CSI objected to the sale, asserting that
it owned the rimonim.
In July of 2012, the parties engaged in
discussions about the dispute, which resulted in a letter by CSI
to CJI that purports to reflect an agreement between the parties
that certain documents related to the ownership of the rimonim
would be exchanged.
The letter also stated that “if the
Congregation Jeshuat Israel takes any further action to sell the
rimonim, it will give [CSI] 30 days’ notice.
If there is an
urgency that requires action more quickly, [CJI] will give us at
least 15 days’ notice.”
The parties met again on October 24,
2012, to discuss the dispute.
On November 8, 2012, CJI brought
suit in Rhode Island state court seeking, inter alia, an
injunction that would permit it to sell the rimonim.
On
November 14, 2012, CSI removed that suit to the District Court
of Rhode Island.
On November 16, 2012, CSI brought suit against
CJI in this court, seeking a declaratory judgment that it owns
the rimonim and other related relief.
While this suit remained pending, the parties engaged in
settlement discussions in Rhode Island before U.S. District
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Judge William E. Smith throughout 2013.
After settlement
discussions failed, on July 11, 2013 Judge Smith reassigned the
case to U.S. District Judge John J. McConnell.
On August 15,
2013, Judge McConnell set the pretrial schedule.
DISCUSSION
As previously mentioned, CSI brought this suit after CJI
had already filed a lawsuit in Rhode Island, which CSI removed
to the District of Rhode Island.
It is well settled that
generally, the first-filed suit should have priority, “absent
the showing of [a] balance of convenience in favor of the second
action . . . or unless there are special circumstances which
justify giving priority to the second.”
Factors Etc., Inc. v.
Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978) (internal
citation omitted), abrogated on other grounds by Pirone v.
MacMillan, Inc., 894 F.2d 579 (2d Cir. 1990).
Even before
reaching this analysis, however, a threshold question becomes
relevant:
“which court should grapple with the issue of where
the case should proceed.”
MSK Ins., Ltd. v. Emp’rs Reins.
Corp., 212 F. Supp. 2d 266, 267 (S.D.N.Y. 2002).
The Southern
District of New York “has laid down a bright-line rule for
situations such as this: The court before which the first-filed
action was brought determines which forum will hear the case.”
Id. (internal citations omitted); see also Ontel Prods., Inc. v.
Project Strategies Corp., 899 F.Supp. 1144, 1150 n. 9 (S.D.N.Y.
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1995) (“Case law indicates that the court in which the firstfiled case was brought decides the question of whether or not
the first-filed rule, or alternatively, an exception to the
first-filed rule, applies.”).
To this end, Judge McConnell issued the following text
order on August 6, 2013:
After reviewing the transcript of the hearing in the
companion case filed in federal court for the Southern
District of New York, and considering the positions of
the parties as stated at the status conference before
this Court, the Court sees no need to continue to stay
this litigation and intends to move forward with this
case.
This order indicates that the court before which the action
was first-filed made the threshold determination that it will
decide the question of the appropriate forum, as well as the
substantive decision to hear the case, suggesting that no
exception or special circumstances merit deviation from the
presumption granting it priority to do so.
I see no reason to
disturb this finding: The rule empowering the court where the
action was first-filed to decide which forum will hear the case
makes good sense, as it “duly serves both the federal judiciary
and the litigants before it, because it provides a bright-line
division of labor among the federal courts, thereby avoiding
duplicitous litigation and the possibility of inconsistent
rulings.”
MSK, 212 F. Supp. 2d at 268 n.5 (quoting Kerotest
Mfg. Co. v. C–O–Two Fire Equip. Co., 342 U.S. 180, 183–84, 72 S.
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Ct. 219, 96 L. Ed. 200 (1952)).
The rule’s application is
particularly warranted here because, according to a sworn
declaration by one of CSI’s attorneys, the court in Rhode Island
specifically recognized this rule and made procedural decisions
based upon it.
See Sherman Decl. ¶ 16 (“In response to Mr.
Snow’s statement that CJI was contemplating moving to dismiss
this action for lack of personal jurisdiction, the parties and
the Court agreed that that motion would be made to this Court
but that the transfer motion would be made in the Rhode Island
Court since, as the parties and Judge Smith discussed, the law
is that the Court of the first-filed action is the Court to
decide if the first-filed rule should be given any weight and
whether grounds exist for transfer.”).
Although CJI has not technically moved to dismiss under the
first-filed rule, CJI advanced the general argument under the
auspices of its motion to transfer, and this is an area in which
“district courts have been directed to avoid rigid mechanical
solutions and are endowed with an ample degree of discretion.”
MSK, 212 F. Supp. 2d at 268 n.5 (internal citation omitted).
Because this case shall be dismissed pursuant to the first-filed
rule, I do not reach the question of personal jurisdiction or
the substance of CJI’s motion to transfer. See SongByrd, Inc. v.
Estate of Grossman, 206 F.3d 172, 179 n.9 (2d Cir. 2000).
Nevertheless, it bears mentioning that there is no question of
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jurisdiction in Rhode Island, where the issue has not been
contested, whereas a close question exists as to whether
personal jurisdiction exists in this district.
This presents
yet another factor counseling in favor of the district court in
Rhode Island adjudicating the dispute.
See Credit Suisse Sec.
(USA) LLC v. Hilliard, 469 F. Supp. 2d 103, 112 (S.D.N.Y. 2007)
(“In this case, plaintiff’s choice of forum, while important, is
outweighed by the serious question as to whether there is
personal jurisdiction over defendants in this district.”).
CONCLUSION
For the foregoing reasons, this case is dismissed in favor
of the first-filed action.
SO ORDERED.
Dated:
New York, New York
January 30, 2014
S/______________________________
MIRIAM GOLDMAN CEDARBAUM
United States District Judge
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