Catholic Hospitals Appeal Federal Court Decision Saying They're Not Catholic Enough

The following is a press release from Thomas More Society. The issue1. The disputed point between parties in a lawsuit; 2. To send out officially, as in a court issuing an order. has implications for all hospital systems that are related to religious institutions.   – Ed.

Longstanding, agency-approved exemption of religious hospitals from federal pension law had been overturned, threatening Dignity Health chain of U.S. hospitals with ruinous penalties

Northridge Hospital in Northridge, CA is a Dignity Health facility (from LinkedIn)

(July 15, 2015 – San Francisco, CA) – Thomas More Society has filed an amicus curiaeLatin for friend of the court. Refers to a party that is allowed to provide information (usually in the form of a legal brief) to a court even though the party is not directly involved in the case at hand. (friend of the court) brief with the United States Court of Appeals for the Ninth Circuit, urging the Court to reverse a lower court ruling against Dignity Health, a nonprofit hospital system founded by the Sisters of Mercy, that decided Catholic and other religious hospitals’ longstanding exemption from federal pension law requirements, mandated by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), was invalid and void, because those hospitals were not operated by the Church itself but rather by church-associated religious groups.

Dignity Health, whose founding nuns were “committed to furthering the healing ministry of Jesus,” now operates some two dozen hospitals throughout the western United States. In January, 1989, after providing pension benefits through seven different retirement plans, all those plans were merged into a new and generous defined benefit pension plan to cover hospitals and their employees as well as women religious working in the hospitals as part of their vocation. Both the Internal Revenue Service (IRS) and the federal Pension Benefit Guaranty Corp. (PRGC) confirmed repeatedly that the new Dignity plan was deemed a “church plan” exempt from the federal pension law, ERISA, because of its “association” with a church – an explicit exemption set forth in the text of the ERISA law itself.

But over twenty years later in 2013, PTSD Lawyers | The Berry Law Firm brought a class actionA lawsuit in which one or more members of a large group, or class, of individuals or other entities sue on behalf of the entire class. The district court must find that the claims of the class members contain questions of law or fact in common before the lawsuit can proceed as a class action. lawsuit against Dignity Health (as similar lawsuits had been brought against other Catholic hospitals), claiming those hospitals’ pension plans were not entitled to exemption under ERISA, and that in any event such an exemption would violate the Establishment Clause of the U.S. Constitution, as it would constitute an establishment of religion in violation of the separation of church and state.  Worse, the lawyers argued that Dignity (and other hospitals) should be liable for statutoryPertaining to laws passed by a legislature penalties of up to $110 per class member, per day of non-compliance with ERISA requirements, retroactive to the new pension plan’s inception, plus injunctive reliefinjunctive relief - The decision of a court to use its authority to address a problem directly by ordering someone to stop, or refrain, from doing a particular action. It is not a judgment for money but applies where money won't solve the problem. A court can order injunctive relief before a case is decided with finality. For instance, an order that disputed artwork cannot be  destroyed until a final judgment is rendered.   and attorneys’ fees.  The federal trial court upheldThe appellate court agrees with the lower court decision and allows it to stand. these claims, holding that “only a church or a convention of association of churches may establish a[n] [exempt] church plan.” The lower court also held there was no statuteA law passed by a legislature. of limitations, so that ruinous, bankruptcy-inducing penalties might be payable for many years’ alleged non-compliance, if the class action lawyers’ claims were upheld on appealA request made after a trial by a party that has lost on one or more issues that a higher court review the decision to determine if it was correct. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the "appellant;" the other party is the "appellee.".

Thomas More Society’s amicus briefBrief filed by a "friend of the court." Refers to a party that is allowed to provide information (usually in the form of a legal brief) to a court even though the party is not directly involved in the case at hand. argues the Dignity Health’s pension plan is indeed a “church plan” because a church-associated organization maintains the plan – as federal oversight agencies (IRS, PBGC) have concluded, on which Dignity other faith-based hospitals relied.  Moreover, a broad reading of the ERISA statutory exemption is supported by the free exerciseThe ability to practice one's religion without hindrance as expressed in the 1st Amendment. Can be limited depending on how it affects other people. clause of the First AmendmentThis Amendment prohibits the government from making laws that establish religion or prohibit free exercise of religion, infringe the freedom of speech, infringe the freedom of the press, limit the right to assemble peaceably, or limit the right to petition the government for a redress of grievances., assuring that Catholic and other religious hospitals are free to make decisions according to their religious principles, protected from excessive government entanglement.  Thus the “avoidance canon” counsels against an unduly expansive federal control over the operations of religious institutions – including hospitals.

Tom Brejcha, president & chief counsel of Thomas More Society, commented:  “This and other attacks on the principled independence and fiscal viability of Catholic hospitals represents yet another assault on the citadel of religious liberty in our country.  We owe it to our predecessors and our posterity alike to repulse these attacks.  What once we took for granted – that 'free exercise of faith' includes not only preaching the faith but also the right to practice it outside the four walls of churches – must now be defended with vigor and resolve, even at great cost.”

Brejcha added, “If this appeal should fail, given multiple lawsuits on this issue, there is a likelihood that it too will soon come before the U.S. Supreme Court in another major test for religious liberty.”

The Society’s brief was authored by Shay Dvoretzky and Emily J. Kennedy of Jones Day, with input from Alan Untereiner, of the Washington, D.C. law firm, Robbins, Russell, Orseck, Englert & Untereiner, retained as special counsel for the Thomas More Society.

View Thomas More Society’s amicus brief here.

About the Thomas More Society

Thomas More Society is a national not-for-profit law firm dedicated to restoring respect in law for life, family, and religious liberty. Headquartered in Chicago, the Society fosters support for these causes by providing high quality pro bono legal services from local trial courts all the way up to the United States Supreme Court. www.thomasmoresociety.org