United States District Court, E.D. Kentucky, Northern Division, Covington
DOLORES JANE BODEN, et al. PLAINTIFFS
ST. ELIZABETH MEDICAL CENTER, INC., et al. DEFENDANTS
MEMORANDUM OPINION AND ORDER
L. Banning United States District Judge.
matter is before the Court on cross-Motions for Summary
Judgment (Docs. # 129 and 130) pursuant to the Court's
October 9, 2018 Order (Doc. # 123). The Motions address the
question of whether St. Elizabeth Medical Center's
at-issue defined-benefit plan is a “church plan”
and therefore exempt from the requirements of the Employee
Retirement Income Security Act of 1974 (ERISA). (Docs. # 129
and 130). The Court having heard oral argument and reviewed
the Motions, accompanying briefing, and available record
evidence, has determined that the at-issue plan is a
“church plan” and is exempt from ERISA.
Accordingly, for the following reasons, Defendants'
Motion for Partial Summary Judgment (Doc. # 129) is
granted and Plaintiffs' Motion for
Summary Judgment (Doc. # 130) is denied.
Further, as the Court has determined that ERISA does not
apply and must dismiss the ERISA claims-the only claims over
which the Court has original jurisdiction-it also will
dismiss the pending state-law claims pursuant to 28 U.S.C.
FACTUAL AND PROCEDURAL BACKGROUND
Jane Boden, Jeanine Godsey, and Patricia Schafer
(“Plaintiffs”) previously worked as nurses at St.
Elizabeth Medical Center (“St. Elizabeth”), a
nonprofit corporation with its headquarters in Edgewood,
Kentucky. (Doc. # 74 at 4-5). St. Elizabeth provides health
care in Kentucky, Ohio, and Indiana. Id. at 5. St.
Elizabeth funds a defined-benefit pension plan, which
“promises [its] participants a retirement income that
is based on their income and length of service.”
Id. at 1-2. Each of the Plaintiffs is a participant
in the St. Elizabeth Medical Center Employees' Pension
Plan (the “Plan”). Id. at 4-5.
Plan, first established in 1966 and funded by St. Elizabeth,
provides monthly pension benefits to retired St. Elizabeth
employees. Id. at 10. The assets which make up the
Plan are held in a trust, and benefits are paid from the
trust to the Plan participants. Id. On February 23,
2016, the President and CEO of St. Elizabeth, Garren Colvin,
and the Senior Vice President and Chief Clinical Integration
Officer, Dr. Robert Prichard, informed Plan participants in a
letter that “[a]s of December 31, 2015, the [St.
Elizabeth Plan] was 59% funded.” Id. at 2;
see also (Doc. # 74-1) (letter from Garren Colvin
and Robert Prichard to Plan participants).
light of this information, the Plaintiffs filed this putative
class action suit alleging, inter alia, violations
of ERISA by St. Elizabeth, St. Elizabeth Medical Center
Employees' Pension Plan Administrative Committee, and
several named and unnamed individuals involved in the
administration of the Plan (“initial
Defendants”). The initial Defendants argued that St.
Elizabeth was not required to follow the provisions of ERISA
because it was considered a church, and therefore fell under
ERISA's church-plan exemption. (Doc. # 21). The Court
initially stayed this case pending the Supreme Court's
resolution of Advocate Health Care Network v.
Stapleton, 137 S.Ct. 1652 (2017), a case dealing with
the exemption for churches provided by ERISA. (Doc. # 60).
the Supreme Court's decision in Stapleton, the
Court allowed Plaintiffs to file an Amended Complaint. (Doc.
# 71). The Amended Complaint brings claims, including a
request for declaratory judgment, against St. Elizabeth as
well as current and former members of the St. Elizabeth
Medical Center Employees' Pension Plan Administrative
Committee (“the Committee”)-collectively, the
“Defendants”-for violations of ERISA and Kentucky
state law. (Doc. # 74). The Committee, created by the St.
Elizabeth Board of Trustees (“the Board”), is the
Plan's fiduciary. Id. at 5. Defendants answered
the Amended Complaint and brought a declaratory-judgment
counterclaim, seeking a declaration that the Plan is a church
plan under ERISA. (Doc. # 76).
Defendants then filed a Motion to Dismiss the former members
of the Committee from the case (Doc. # 77) and the Plaintiffs
filed a Motion to Dismiss the Defendants'
declaratory-judgment counterclaim (Doc. # 81). The Court
granted in part and denied in part the Defendants' Motion
to Dismiss and granted the Plaintiffs' Motion to Dismiss
on April 4, 2018. (Doc. # 100). The Defendants then filed a
Motion for Reconsideration of the April 4, 2018 Order, which
the Court also denied. (Docs. # 102 and 120). Thereafter, the
Court convened a telephonic conference on October 9, 2018 to
discuss the need for further discovery and a pending
summary-judgment Motion. (Doc. # 123). During that
conference, the Court ordered that the Defendants'
renewed Motion for Summary Judgment (Doc. # 115) be denied
without prejudice, that the Plaintiffs' request for
discovery be granted in part, and that cross-motions for
summary judgment on the church-plan issue be filed by January
9, 2019. (Doc. # 123).
for Summary Judgment (Docs. # 129 and 130) were timely filed
pursuant to the Court's Order. (Doc. # 123). Following
two extensions of time for briefing (Docs. # 135 and 141) and
an Order allowing the filing of a sur-reply and sur-sur-reply
(Doc. # 146), briefing of both Motions was completed. (Docs.
# 137, 139, 142, 143, 147 and 148). Those Motions became ripe
for the Court's review after oral argument on July 19,
2019 before the undersigned.
Standard of Review
judgment is appropriate when “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a). In
adjudicating a summary-judgment motion, the judge must not
weigh the evidence before the Court, but merely determine
whether “there are any genuine factual issues that
properly can be resolved only by a finder of fact because
they may reasonably be resolved in favor of either
party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 250 (1986). “There is no issue for trial
unless there is sufficient evidence favoring the nonmoving
party for a jury to return a verdict for that party.”
Id. at 249. Speculation is insufficient to defeat
summary judgment. Bradley v. Wal-Mart Stores East,
LP, 587 Fed.Appx. 863, 866 (6th Cir. 2014). Rather,
sufficient evidence, more than a “mere scintilla,
” from which a jury could draw a conclusion in favor of
the nonmoving party must be shown. Anderson, 477
U.S. at 252.
standard of review for cross-motions of summary judgment does
not differ from the standard applied when a motion is filed
by only one party to the litigation.” U.S. S.E.C.
v. Sierra Brokerage Servs., 712 F.3d 321, 327 (6th Cir.
2013) (citing Taft Broad. Co. v. United States, 929
F.2d 240, 248 (6th Cir. 1991). “[T]he court must
evaluate each party's motion on its own merits, taking
care to draw all reasonable inferences against the party
whose motion is under consideration.” Taft Broad.
Co., 929 F.2d at 248 (quoting Mingus Constructors,
Inc. v. United States, 812 F.2d 1387, 1391 (Fed. Cir.
passed ERISA in 1974 to “remedy certain defects in the
private retirement system which limit the effectiveness of
the system in providing retirement income security.”
H.R. Rep. No. 93-533, at 4639 (1973); see also 29
U.S.C. § 1001. Recognizing the growth of private
pensions and the limited regulation of the system, the
legislation aimed to “establish minimum standards of
vesting, funding, and fiduciary and a system of compulsory
benefit insurance to protect the security of pension
rights.” H.R. Rep. No. 93-533, at 4643. The statute
generally applies to employee-benefit plans, but exempts
certain plans, including “governmental plan[s]”
and “church plan[s]”. 29 U.S.C. § 1003. At
issue in these summary-judgment Motions is whether the
employee-benefit plan provided for employees of St. Elizabeth
is a church plan and thus not subject to the provisions of
ERISA. (Docs. # 129-1 at 1 and 131 at 6).
The Statutory Language
ERISA, for purposes of the church-plan exemption:
A plan established and maintained for its employees (or their
beneficiaries) by a church or by a convention or association
of churches [a church plan] includes a plan maintained by
an organization, whether a civil law corporation or
otherwise, the principal purpose or function of which is the
administration or funding of a plan or program for
the provision of retirement benefits or welfare
benefits, or both, for the employees of a church or a
convention or association of churches, if such organization
is controlled by or associated with a church or a convention
or association of churches.
29 U.S.C. § 1002(33)(C)(i) (emphasis added). In other
words, this provision-“a mouthful for lawyers and
nonlawyers alike” according to the Supreme Court-means
that a church plan falls into the ERISA exemption if the plan
is established and maintained by a church or association of
churches or maintained by an organization with the
principal purpose of administering or funding the plan.
Stapleton, 137 S.Ct. at 1656; 29 U.S.C. §
1002(33)(C)(i). The latter has been referred to by
the Supreme Court as a “principal-purpose
organization.” Stapleton, 137 S.Ct. at 1656.
Defendants argue that the at-issue Committee is such a
principal-purpose organization; they do not seem to argue
that St. Elizabeth or the Committee is a “church or . .
. a convention or association of churches” under
subsection (33)(C)(i). See (Doc. # 129-1 at 8).
principal-purpose organization statutory language has been
distilled into a three-part test, which other
courts have used to determine whether a plan
maintained by a principal-purpose organization falls within
the church-plan exemption:
1. Is the entity a tax-exempt nonprofit organization
associated with a church?
2. If so, is the entity's retirement plan maintained by a
principal-purpose organization? That is, is the plan
maintained by an organization whose principal purpose is
administering or funding a retirement plan for entity
3. If so, is that principal-purpose organization itself
associated with a church?
Medina v. Catholic Health Initiatives (Medina I),
877 F.3d 1213, 1222 (10th Cir. 2017); see also Smith v.
OSF Healthcare Sys., 349 F.Supp.3d 733, 740 (S.D. Ill.
2018) (appeal pending); Rollins v. Dignity Health,
338 F.Supp.3d 1025, 1035 (N.D. Cal. 2018). A plan that
satisfies each prong falls within the church-plan exemption.
Inquiry 1-Is the entity associated with a
Court must first determine whether the entity “whose
employees the plan benefits [is a tax-exempt nonprofit]
associated with a church.” Medina I, 877 F.3d
at 1222. Pursuant to ERISA, “[a]n organization, whether
a civil law corporation or otherwise is associated with a
church or a convention or association of churches if it
shares common religious bonds and convictions with that
church or convention or association of churches.” 29
U.S.C. § 1002(33)(C)(iv). Courts consider a number of
factors in determining whether an organization-particularly a
healthcare organization-is associated with a church,
including: a church's recognition of the organization;
the inclusion of language in key documents that evidences a
relationship between the organization and a church;
denominational requirements for board members, employees, or
patients; clear affiliation with a church through
denominational chapels; evidence that the organization is
guided by a specific church's religious principles; and
requirements that certain decisions must be approved by a
church's leadership (e.g. the Holy See), among
other things. See Medina I at 1222-23 (rejecting the
factors elucidated in Lown v. Continental Casualty
Co., 238 F.3d 543 (4th Cir. 2001), because the narrow
factors did not reflect “the broad language” of
the church-plan exemption and instead considering a variety
of facts indicating a relationship between the Catholic
Health Initiatives and the Catholic Church); see also
Smith, 349 F.Supp.3d at 741; Rollins, 338
F.Supp.3d at 1038; Sanzone v. Mercy Health, 326
F.Supp.3d 795, 806-07 (E.D. Mo. 2018).
first portion of the three-part inquiry is satisfied here.
The relevant entity in this case is St. Elizabeth, as the
Plan was developed to provide retirement benefits to St.
Elizabeth employees. (Doc. # 132-3 at 5-6) (indicating that
“it is the intention of the Employer [St. Elizabeth] to
continue to maintain a defined benefit plan for the sole and
exclusive benefit of its eligible Employees”). St.
Elizabeth is a tax-exempt nonprofit entity. (Doc. # 74 at 5)
(conceding that St. Elizabeth is a 501(c)(3) nonprofit
corporation); see also (Doc. # 63 at 1-2) (Affidavit
of CEO Garren Colvin explaining that St. Elizabeth is a
tax-exempt nonprofit). The Court now must determine if there
is a genuine issue of material fact as to whether St.
Elizabeth is associated with a church. The Court finds that
there is no question that St. Elizabeth is associated with
the Catholic Church.
identify several ways in which St. Elizabeth is associated
with the Catholic Church. (Doc. # 129-1 at 10-20). St. Elizabeth
was founded in 1861 by Franciscan Sisters of the Poor and the
property was acquired “in the name of this Catholic
religious order.” Id. at 11; see also
(Doc. # 20-3). Sponsorship of St. Elizabeth was transferred
to the Diocese of Covington in 1973, (Doc # 63-2), and
continues to this day; this is evidenced, for example, by the
fact that the Bishop of Covington is the only person with
“the authority to dispose of . . . hospital ...