Medina v. Catholic Health Initiatives

• Decision Date: 08 December 2015
• Docket Number: Civil Action No. 13-cv-01249-REB-KLM
• Citation: 147 F.Supp.3d 1190
• Parties: Janeen Medina, individually, and on behalf of all others similarly situated, and on behalf of the CHI Plans, Plaintiff, v. Catholic Health Initiatives, et al., Defendants.
• Court: U.S. District Court — District of Colorado

147 F.Supp.3d 1190

Janeen Medina, individually, and on behalf of all others similarly situated, and on behalf of the CHI Plans, Plaintiff,

v.Catholic Health Initiatives, et al., Defendants.

Civil Action No. 13-cv-01249-REB-KLM

United States District Court, D. Colorado.

Signed December 8, 2015

Lynn L. Sarko, Erin M. Riley, Havila C. Unrein, Laura R. Gerber, Matthew M. Gerend, Raymond J. Farrow, Keller Rohrback, LLP, Seattle, WA, Bruce F. Rinaldi, Karen Louise Handorf, Mary Joanne Bortscheller, Matthew Alexander Smith, Michelle C. Yau, Monya Monique Bunch, Cohen, Milstein, Sellers & Toll, PLLC, Washington, DC, Christopher Graver, Laurie B. Ashton, Keller Rohrback, LLP, Phoenix, AZ, Khesraw Karmand, Ron Kilgard, Keller Rohrback, LLP, Santa Barbara, CA, for Plaintiff.

Sean C. Abouchedid, Emily C. Lechner, Lars C. Golumbic, Groom Law Group Chartered, Washington, DC, Blake Wilson Stribling, Michael W. O'Donnell, Fulbright & Jaworski, LLP, San Antonio, TX, Matthew David Spohn, Fulbright & Jaworski, LLP, Denver, CO, for Defendants.

ORDER RE: MOTIONS FOR SUMMARY JUDGMENT

Blackburn

, District Judge.

The matters before me are (1) Plaintiff's Motion for Partial Summary Judgment [#308],¹ filed August 13, 2015; (2) Defendants' Motion for Summary Judgment [#302], filed August 13, 2015; and (3) Defendant Edward Speed's for Summary Judgment [#296], filed August 13, 2015. I grant Catholic Health Initiatives's motion in relevant part, deny plaintiff's motion, and deny Mr. Speed's motion as moot.²

I. JURISDICTION

I have jurisdiction over this matter under 28 U.S.C. § 1331

(federal question).

II. STANDARD OF REVIEW

Summary judgment is proper 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)

; Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A dispute is “genuine” if the issue could be resolved in favor of either party. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) ; Farthing v. City of Shawnee , 39 F.3d 1131, 1135 (10th Cir.1994). A fact is “material” if it might reasonably affect the outcome of the case. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) ; Farthing , 39 F.3d at 1134.³

A party who does not have the burden of proof at trial must show the absence of a genuine dispute. Concrete Works, Inc. v. City & County of Denver , 36 F.3d 1513, 1517 (10th Cir.1994)

, cert. denied , 514 U.S. 1004, 115 S.Ct. 1315, 131 L.Ed.2d 196 (1995). By contrast, a movant who bears the burden of proof must submit evidence to establish every essential element of its claim. See

In re Ribozyme Pharmaceuticals, Inc. Securities Litigation , 209 F.Supp.2d 1106, 1111 (D.Colo.2002). In either case, once the motion has been properly supported, the burden shifts to the nonmovant to show, by tendering depositions, affidavits, and other competent evidence, that summary judgment is not proper. Concrete Works , 36 F.3d at 1518. All the evidence must be viewed in the light most favorable to the party opposing the motion. Simms v. Oklahoma ex rel

.

Department of Mental Health and Substance Abuse Services , 165 F.3d 1321, 1326 (10th Cir.), cert. denied , 528 U.S. 815, 120 S.Ct. 53, 145 L.Ed.2d 46 (1999).

III. ANALYSIS

Plaintiff, a former employee of Catholic Health Initiatives (“CHI”), bring this putative class action lawsuit under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001

-1461 (“ERISA”), against CHI and the members of its Board of Stewardship Trustees (the “BOST”) and Human Resources Committee (the “HR Committee”). CHI offers employees retirement benefits through a defined benefit pension plan, the Catholic Health Initiatives Retirement Plan (the “CHI Plan” or the “Plan”). The Plan is sponsored by CHI and administered by the CHI & Affiliates Defined Benefit Plan Subcommittee (the “DB Plan Subcommittee” or the “Subcommittee), a subcommittee of the HR Committee.

The CHI Plan, established January 1, 1997, states specifically that it is intended to qualify as a “church plan” (CHI Motion App., Exh. 1 ¶ II at 2), and it has been recognized as such by the Internal Revenue Service since 2002 (id ., Exh. 49). Church plans are specifically exempt from compliance with the requirements of ERISA. 29 U.S.C. § 1003(b)(2)

(“The provisions of this subchapter shall not apply to any employee benefit plan if...such plan is a church plan (as defined in section 1002(33) of this title)[.]”)). See also

Chronister v. Baptist Health , 442 F.3d 648, 651 (8th Cir.2006) (“Church plans are not ERISA plans.”). By this lawsuit, plaintiff challenges that designation and contends the CHI Plan should be required to comply with ERISA.

The majority of plaintiff's claims are premised on the notion that CHI has violated various of the myriad requirements of ERISA. The viability of those claims turns entirely on whether the CHI Plan is entitled to claim the benefit of ERISA's church plan exemption. Before answering that fundamental question, it is necessary to describe the parameters of the exemption itself, as well as to explore the history and structure of CHI.

A. THE CHURCH PLAN EXEMPTION

I begin by examining the parameters and requirements of ERISA's church plan exemption. The term “church plan” is defined by statute as

...a plan established and maintained (to the extent required in clause (ii) of subparagraph (B)) for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501 of Title 26.

29 U.S.C.A. § 1002(33)(A)

. That definition is further elaborated as follows:

For purposes of this paragraph—(i) A plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches 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.

Id. § 1002(33)(C)(i)

. I have interpreted these sections to mean that a plan may qualify for the church plan exemption if it meets the requirements of either subsection (A) or subsection (C):

Subsection (C) clearly evinces an intent to broaden the availability of the exemption such that churches themselves need not be involved directly in the administration of their employee benefit plans in order to qualify. To that end, subsection (C) describes a particular way in which a church plan may meet the requirement that it be “established and maintained” by a church—that is, if it is maintained by an organization controlled by or associated with a church or convention of churches. This interpretation is driven by the language of the subsection itself, which states that a plan “established and maintained” as a church plan “includes ” such a plan. In other words, “under the rules of grammar and logic,...if A is exempt and A includes C, then C is also exempt.”

(Order Sustaining Objection to and Rejecting Recommendation of United States Magistrate Judge at 4 [#214], filed August 26, 2014 (citations omitted; emphasis in original).)

Thus, a plan may qualify initially for the church plan exemption under two circumstances. First, a plan may constitute a church plan if it was established and maintained by a church or a convention or association of churches. Alternatively, a plan may constitute a church plan if it is maintained by an organization which meets two further criteria: (1) the principal purpose or function of the organization 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;⁴ and (2) the organization is controlled by or associated with a church or a convention or association of churches. 29 U.S.C. § 1002(33)(C)(i)

. Under ERISA, an organization is “associated” with a church “ if it shares common religious bonds and convictions with that church or convention or association of churches.” Id. § 1002(33)(C)(iv). A plan which meets all the foregoing criteria nevertheless may not be classified as a church plan, inter alia , “if less than substantially all of the individuals included in the plan are individuals described in subparagraph (A) or in clause (ii) of subparagraph (C).” Id. § 1002(33)(B)(2).⁵

Plaintiff argues that CHI is neither a church nor controlled by or associated with a church. She further maintains that a substantial percentage of employees covered by the CHI Plan are not employed by such a church-associated organization. To analyze those arguments properly, however, appropriate context is required. I thus turn to examine the history and structure of CHI.

B. HISTORY AND STRUCTURE OF CHI

The history of orders of Catholic brothers and sisters providing healing ministries in their communities dates back to the Middle Ages. “During those years, various religious groups—vowed and lay, composed of women or men—cared for the needs of the sick and often lived among the sick poor:”

[The view of providing healing to the sick as an individual vocation] changed...in the 18th and 19th centuries as more and more religious communities of women were founded to carry out particular apostolic activities. Caring for the sick...became a communal vocation. When these religious communities came to the United States, hospitals were among the institutions that they founded.

In 1727, the Ursuline sisters became the first Catholic congregation of women to come to America. Their apostolic works included the care of the sick....In the 1800s came more Catholic siste

...