Court Grants Summary Judgment to Plaintiffs in Rollins v. Dignity Health

Today, July 22, 2014, a Northern District of California court in Rollins v. Dignity Health granted the plaintiffs’ motion for partial summary judgment and denied defendants’. The decision was consistent with the court’s earlier denial of defendants’ motion to dismiss. (See Court Finds Plan Sponsored by Catholic Hospital is NOT a Church Plan).

In finding for the plaintiffs that the pension plan should be governed by ERISA, the court rejected defendants’ argument that it was inequitable or unfair because of the long term reliance on the IRS rulings and that either the ERISA or a California state law statute of limitation applies. The court also found that these was no genuine issue of material fact as to Dignity Health’s predecessor Catholic Healthcare West establishing the pension plan, rather than that they were either controlled by a church or that a church co-established the plan.

So where does this leave the case? The plaintiffs will now need to move the court to grant it the relief it seeks, i.e. meeting ERISA. Needless to say, this will be a herculean task. I wouldn’t be surprised to see the court enter an order granting the relief plaintiffs seek and then immediately stay the order until defendants can appeal the case to the Ninth Circuit Court of Appeals. Again, I wouldn’t be surprised to see the defendants want to move the case along as fast as they can in order to get the case to the appeal stage. No true predictions here as to what will happen next, but I suspect speed will be a dominant factor.

Two New Cases Filed

In addition to the six cases we’ve written about on the blog, two new cases have been recently filed. The complaints in Owens v. St. Anthony Medical Center (N.D. Illinois) and Lann v. Trinity Health (D. Maryland) are similar to the others, with the exception that the St. Anthony pension plan was already terminated in an underfunded status.

Recommendation by Magistrate in Favor of Plaintiffs in Medina v. Catholic Health Initiatives

I’ve been reluctant to report on a development in the Medina v. Catholic Health Initiatives case. There, the district court judge used a procedure under the rules requesting the assigned magistrate judge to review the case and provide their recommendation on how to decide. Sometimes these recommendations are agreed to 100% by a district judge and adopted and other times, the ultimate outcome can be substantially different if the district judge disagrees. So read the recommendation by the magistrate (knowing that it is not binding) siding with the plaintiff and finding that the pension plan at issue is not eligible to be considered a church plan and thus should be subject to ERISA. We will report on the decision of the district court when it is granted.

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