The 10th Circuit Court of Appeals in Denver agreed Tuesday with Catholic Health Initiatives' right to have a church-plan exemption for its pension plan, upholding a lower court's dismissal of a class-action lawsuit challenging it.
The ruling is the first issued since the Supreme Court decided unanimously on June 5 in a similar case involving three health-care system retirement plan sponsors — Dignity Health, Advocate Health Care and Saint Peter's Healthcare System — that they are covered by an exemption for church-affiliated plans from the Employee Retirement Income Security Act of 1974, even though the plan was not established by a church.
The Supreme Court decision reversed several lower-court decisions that the plans are bound by federal pension law, including its funding and reporting rules, but left open several questions, which participant plaintiffs continue to pursue, including whether the church-plan exemption is constitutional, and what it means to maintain a plan that qualifies for the exemption.
Groom Law Group, representing Catholic Health Initiatives and other defendants in the Denver case, said in a memo that the 10th circuit decision in Medina vs. Catholic Health Initiatives "bolsters the litigation positions of religiously affiliated health-care systems across the country as they continue to defend their church plans after Advocate Health." While existing church-plan lawsuits are likely to be pursued by plaintiffs, "the 10th circuit has provided defendants with compelling support in seeking to dismiss the claims against them," the Groom memo said.