This decision is a good primer on the actual harm element requirement needed in order to have standing in Federal Court.
In an order issued January 7, 2020, United States District Judge Gregory Presnell dismissed with prejudice a case brought by an employee against Adventist Health Systems Sunbelt Healthcare Corporation (“AHS”). In the lawsuit, originally filed in 2016, Donna Sheedy, had claimed that the defendants had violated the Employee Retirement Income Security Act (“ERISA”) and sought an order directing the defendants to bring the hospital pension plan into compliance with ERISA reporting and disclosure requirements.
The defendants filed a pre-trial motion to dismiss under Federal Rule of Civil Procedures 12(b)(6), and the court, viewing the facts as alleged in the light most favorable to the plaintiff, dismissed the case for several reasons. Judge Presnell found that the plaintiff’s allegations were not substantial and were based on speculation, failing to cross “the line from conceivable to plausible.”
The plaintiff was unable to demonstrate that she had standing to pursue the litigation as the judge noted there was not sufficient evidence the plaintiff had suffered an “injury in fact,” which is a designation that it is “(a) concrete and particularized and (b) actual or imminent, rather than conjectural or hypothetical.”
AHS moved for dismissal for several reasons. First, as mentioned above the plaintiff failed to demonstrate a “concrete or particularized injury.” Secondly, the claimed procedural violations of ERISA, even if they occurred, were not sufficient to establish the harm. The judge noted that “the Court will not presume that any time there is a procedural violation of ERISA, there is a corresponding concrete injury.” The plaintiff was unable to demonstrate that the hospital plan was underfunded for ERISA purposes.
The court does address the defendant’s Establishment Clause argument that the religious hospital falls within the Church Plan Exemption to ERISA, but does not reach an analysis on the grounds that the plaintiff had already failed to demonstrate concrete or particularized injury.
Takeaway: It’s easy to think that a lawsuit can be filed when a party fails to fulfill its statutory obligations, however, there needs to be a demonstration that a “concrete and particularized injury” has occurred to the person who wants to bring the lawsuit. In this case, it does not appear that the plaintiff established that she was harmed, so the Court dismissed her case without getting into whether the rules violations occurred or whether the Church Exemption would apply.
Had the judge found she demonstrated sufficient harm to achieve standing, the Church Plan Exemption would have most likely applied based on the U.S. Supreme Court’s decision in Advocate Health Care Network v. Stapleton (1997).