Advocate Health Care, et al. v. Stapleton, et al., St. Peter's Healthcare, et al. v. Kaplan, Dignity Health, et al. v. Rollins

Summarized by:

  • Court: U.S. Supreme Court Certiorari Granted
  • Area(s) of Law: ERISA
  • Date Filed: December 2, 2016
  • Case #: 16-74, 16-86, 16-258
  • Judge(s)/Court Below: 817 F.3d 517, 810 F.3d 175, Ninth Circuit Court of Appeals
  • Full Text Opinion

Whether a church must originally establish a pension plan in order for the church plan exemption of ERISA to apply to church-affiliated organizations that maintain pension plans and are otherwise qualified for the exemption?

For the last several decades, the federal agencies responsible for administering and enforcing ERISA, the IRS, Department of Labor, and Pension Benefit Guaranty Corporation, have all operated under the consensus that qualified church-affiliated organizations are exempt from ERISA under the "church plan" exemption regardless of whether or not a church established the pension in the first instance. The Third, Seventh, and Ninth Circuits recently adopted a different interpretation and now require that a pension plan be originally established by a church in order for otherwise qualifying church-affiliated organizations to qualify for the church plan exemption. The new interpretation has already prompted much litigation, including the present class actions brought by current and former employees of the Petitioners challenging the Petitioners' compliance with ERISA. Petitioners' appealed to the Supreme Court with hopes of resolving the diverging ERISA interpretation of the Third, Seventh, and Ninth Circuits from that of the federal agencies administering ERISA. Petitioners argue that the new approach would upset the reasonable expectations of hundreds, if not thousands of nonprofit organizations that was based off of the agencies’ interpretation and would have widespread, devastating financial impacts on those organizations. Petitioners also point to the plain text of the church plan exemption as well as the opinions of several other circuits that take the same view as the federal agencies in support of their position.


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