The U.S. Supreme Court heard oral arguments this week in the cases of Advocate Health Care Network v. Stapleton, St. Peter’s Healthcare System v. Kaplan, and Dignity Health v. Rollins.
the many cases challenging whether an entity’s pension plan is a
“church plan” under the Employee Retirement Security Act (ERISA),
federal appellate courts ruled that the plans in these cases did not fit ERISA’s definition of “church plan.”
bulk of the oral arguments focused on the definition of a church plan
set forth in Section 3(33) of ERISA and whether deference should be
given to Internal Revenue Service (IRS) letters granting church plan
status to entities’ plans.
Lisa S. Blatt, counsel on behalf of
the petitioners, argued that the holdings in the three district court
cases should be reversed for three reasons. She said the text of the
statute does not require a church to establish benefit plans for someone
else's employees; the government's consistent view, over three decades,
has generated enormous reliance interest and warrants deference; and
affirmance would resurrect the precise problems that everyone understood
the 1980 amendment would fix.
Blatt noted that the main text at
issue is subparagraph C(i) of section 3(33) which she said expands the
original church plan definition in subparagraph A. “Now, the only
plausible reason that C(i) repeats the entire phrase "a plan established
and maintained by a church" is Congress intended that C(i) redefine and
modify that entire phrase,” she argued.
But, Justice Sonia
Sotomayor pointed out there was a provision that was proposed that would
have done very clearly what Blatt thinks this provision does now, and
Congress didn't pass it. Blatt responded that the clear thing in terms
of this unpassed piece of legislation is it came out in the last couple
of days of this several-year process, and it is implausible that that
change went unnoticed when it would have excluded all the plans that the
religious community was up in arms about, and all the plans that
prompted the amendment in the first place.
Justice Elena Kagan
pointed out there would be a simple way of accomplishing what Blatt
thinks this provision accomplishes. “You know, something along the
lines of just saying any plan maintained by a church-affiliated
organization is a church plan or something like that,” she suggested.
“It's very odd language, this statutory language, and I'm wondering why
you think that Congress chose to do what you think it chose to do in
this perplexing way rather than in a straightforward way?”
Ruth Ginsberg said she thought Blatt would like the provision to say
includes a plan maintained by an organization controlled by or
associated with a church, but the provision seems to be giving authority
to principal-purpose organizations and not to entities controlled by or
associated with a church.
Sotomayor asked Blatt, “Do you think
Congress had in mind corporations that are essentially like every other
corporation except they're not for profit?” She pointed out that the
Catholic Church has disavowed any formal affiliation with Dignity. She
noted that the nuns may have established Dignity, but they're no longer
are affiliated with the church. “They're not doing anything different
than any other hospital. They are competing. They're the fifth largest
health care provider in the nation. They have 60,000 employees. Do you
believe that Congress's vision was to let, what is essentially, a
corporate entity opt out of protecting all of those employees?” NEXT: The statute meaning is obvious