Click here for a short summary of the issue. Click here for a detailed timeline.
See also the Pension Rights Center website.
Click here for ex-St. Peter's CEO John Matuska's 2011 letter to the IRS.
Click here for ex-St. Peter's VP of HR Bruce Pardo's 2011 letter to the IRS.
Haga clic aqui para verun resumen del problema en español.
Tuesday, November 29, 2016
The article focuses on both St. Peter's plan and that of the now-defunct St. James Hospital of Newark. St. James' pension plan was starved of funds after a "church plan" ruling, then completely abandoned in a series of corporate mergers. The corporate parent(s) told one story (via press release, and probably to their retirees as well) at the time of the mergers about who was responsible for the plan, but now say that story was "incorrect or misleading"—while taking no responsibility for the outcome. St. James' plan will run out of money in the next few months; the plan's facilitator can't find the responsible party, and the Archdiocese of Newark won't return their phone calls.
It's not difficult to see the parallels. St. Peter's has done their best to rewrite the past, with help from their consultants and lawyers (e.g., "We have always been a church plan"), and their rare public statements about the plan are careful not to mention future benefits. Any words coming from St. Peter's or the Archdiocese of Metuchen about the plan should be subject to careful scrutiny.
As the article mentions, the Supreme Court's decision on whether to hear the St. Peter's case and/or others like it is imminent. We expect to have more for you on this very soon.
Friday, June 24, 2016
As you probably know, the case has been returned to the federal district court of New Jersey, after the Third Circuit in December 2015 denied Saint Peter's appeal, then in March 2016 denied a request to re-hear the case. Absent any new action from Saint Peter’s, the next task in the district court would be to resume the original lawsuit: legal discovery would begin, focusing on the extent of Saint Peter’s ERISA violations (e.g., underfunding the pension plan) so that remedial decisions/orders could be made to bring the plan back into compliance. Alas, none of this has happened.
Saint Peter’s has petitioned the Supreme Court to review their case — in the language of the Court, to grant certiorari (choose your favorite pronounciation). In the meantime Saint Peter’s has filed a motion with the district court to stay the proceedings there, pending the Supreme Court’s decision. The lawyers for the plaintiffs claim that the motion is procedurally improper because, among other things, the hospital cannot establish a reasonable probability that their argument will sway the Court. Remember, the Court's role is to resolve conflicting opinions in the appellate courts. Saint Peter’s has NO appellate court rulings they can cite to support their claim to the church-plan exemption, while the plaintiffs can now cite two appellate rulings supporting their arguments (the Saint Peter’s and Advocate decisions). The motion to stay seems clearly designed as a stalling action, to allow the possibility of a favorable ruling in another of the several similar cases now before the courts, and to allow the hospital to save money by continuing to operate the pension as a church plan.
At this point, we are waiting for the district court to rule on the motion to stay, or for the Supreme Court to decide whether to grant Saint Peter’s a hearing. The current Supreme Court term ends imminently, with the new term beginning in October, but (we believe) a decision could still be made during the summer recess.
Monday, March 28, 2016
Sunday, March 20, 2016
Using much the same logic as the 3rd U.S. Circuit Court of Appeals in Kaplan v. St. Peter’s Healthcare System, the 7th Circuit decided a church plan established by a church and maintained by a church is a church plan, and a church plan established by a church and maintained by a church-affiliated organization is a church plan—but a church plan established by a church-affiliated organization and maintained by a church-affiliated organization is not a church plan. The appellate court in Advocate agreed with the 3rd Circuit that, according to the language of ERISA, for church plan exemption, there are two requirements—establishment and maintenance—and only the maintenance requirement is expanded by the use of the word “includes.”The Cohen Milstein law firm, having now won their second straight appellate judgment in this recent group of cases, deserves to crow a little; they do so in this informative press release.
Thursday, March 17, 2016
Thursday, January 21, 2016
We had previously thought it unlikely that Saint Peter's would file for a rehearing, since the panel's unanimous decision would suggest a slim chance of success before the full court. Our guess is that the purpose of the move is to buy time before the hospital's ultimate objective of having the case heard before the Supreme Court. This is the first case of many essentially similar class action cases to have been decided in an appellate court. Saint Peter's points out in the letter that two other such cases are in process in appellate courts: one involving Advocate Health Care Network, which was argued in September, and one involving Dignity Health, scheduled for argument this coming February. Significantly, in both cases the hospitals lost in district court. For Saint Peter's to have a chance before the Supreme Court, they would need a win for a hospital in appellate court to counter their own defeat -- which would seem a long shot given the cases now before appellate courts and the 90-day filing window. If their petition is accepted, Saint Peter's holds off a court order to run the plan as an ERISA plan, while buying time for an appellate court win, in either of the two current appellate cases or one which eventually filters up from the district courts. In the meantime Saint Peter's can continue to run the pension plan as a church plan, with minimal federal oversight or funding requirements.
Sunday, January 10, 2016
- Charles Toutant in New Jersey Law Journal gives a quick history of the issue and a summary of the ruling, along with quotes from lead attorneys Karen Handorf for the plan members and Jeffrey Greenbaum for the hospital. This is the first statement we've seen on behalf of the hospital in the wake of the ruling. Greenbaum makes clear that the hospital plans to exhaust its legal options before making any changes to its management of the pension plan.
- Rebecca Moore at PLANSPONSOR provides a somewhat more in-depth summary of how the court interpreted the intent of the ERISA statute's church plan exemption by studying its history. Both this and the New Jersey Law Journal article make clear that the ruling sets a precedent for the circuit courts, though apparently other cases pending in the appellate courts could make a contradictory ruling on other grounds, perhaps leading to review by the Supreme Court.
- Cohen Milstein, Karen Handorf's law firm, has issued a press release following the court victory.