New opinion — an ERISA loss for a religious hospital

Kaplan v. St. Peter’s Healthcare System — ERISA — affirmance — Ambro

A Catholic hospital was sued by one of its employees who alleged that the hospital violated ERISA by, among other things, under-funding its employees’ retirement plan by over $70 million. The hospital moved to dismiss the suit, claiming that as a church agency it qualified for a certain ERISA exemption. Yesterday the Third Circuit affirmed a district court ruling denying the hospital’s motion to dismiss, holding that, although the ERISA exemption applies to retirement plans established by a church and then maintained by a church agency, it does not apply to plans established by a church agency.

A phalanx of amici appeared on both sides and the opinion notes that a Seventh Circuit case involving the same issue is pending now, so I doubt this fight is over yet.

Joining Ambro were McKee and Hardiman. Arguing counsel were Jeffrey Greenbaum of Sills Cummis & Gross for the hospital and Karen Handorf of Cohen Milstein for the employee.