A class-action lawsuit filed by former employees of St. James Hospital to have the Archdiocese of Newark take responsibility for a $2.7 million pension shortfall will go forward, ruled New Jersey Superior Court Judge Thomas M. Moore in Newark.
The archdiocese had filed a motion to dismiss the case, which centers on three counts: breach of fiduciary duty, breach of contract, and promissory estoppel, with pension participants alleging that they chose to work at St. James in part because of the archdiocese's promise of lifetime defined benefits. That third complaint was sufficiently pleaded, Mr. Moore said Dec. 6, citing a 1996 letter from the archdiocese to that effect.
Mr. Moore said in his ruling that while the issue of fiduciary duty breach will be developed in discovery, "I think there's enough here for the case to go forward."
Unlike typical church plan lawsuits seeking to have plans associated with church organizations abide by ERISA disclosure and funding rules, this lawsuit is alleging violations of state law that applied when the plan sponsor elected to no longer be covered by federal law. The plaintiffs' group is 135 retirees who stopped working for St. James Hospital before becoming eligible to receive their pension benefits. The hospital has since closed.