A class-action lawsuit challenging the church plan status of Denver-based Catholic Health Initiatives’ defined benefit plan was denied Tuesday.
U.S. District Judge Robert Blackburn in Denver wrote in his order that the plaintiffs’ proposed definition of what constitutes a church plan exempt from the Employee Retirement Income Security Act is “overly simplistic and ultimately untenable.” It qualifies as a church plan because Catholic Health Initiatives and its pension plan subcommittee “plainly share common religious bonds and convictions with the Catholic Church,” Mr. Blackburn wrote. Plaintiffs’ argument that the church plan exemption is unconstitutional is “singularly unpersuasive,” he added. Catholic Health Initiatives was awarded costs in the case, which was filed in May 2013.
The IRS confirmed the church plan status in a private letter ruling in 2002. In August 2014, Mr. Blackburn rejected a recommendation made by U.S. Magistrate Judge Kristen Mix to revoke Catholic Health Initiatives’ church plan status because the plan was not established by the Catholic Church. In October 2014, Mr. Blackburn allowed the case to proceed, ruling that fiduciaries of church plans can be sued for breach of duty.
The case, Medina vs. Catholic Health Initiatives, was filed by law firms Keller Rohrback and Cohen Milstein Sellers & Toll. Calls to lead plaintiffs’ attorney Ron Kilgard of Keller Rohrback and lead defendants’ attorney Sean Abouchedid with Groom Law Group were not returned by press time.
Catholic Health Initiatives spokesman Michael Romano was unable to respond by press time.