Advocate Health Care Network v. Stapleton

PETITIONER: Advocate Health Care Network, et al.
RESPONDENT: Maria Stapleton, et al.
LOCATION: Advocate Health Care Network Headquarters

DOCKET NO.: 16-74
DECIDED BY:
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: US ()
GRANTED: Dec 02, 2016

Facts of the case

The Employee Retirement Income Security Act of 1974 (ERISA) protects employees from unexpected losses in their retirement plans by putting in place required safeguards on plans that qualify for ERISA protections. Church plans are exempted from the Act and its protections to prevent excessive entanglement of the government with religion through regulation.

Maria Stapleton and the other plaintiffs in this case are a group of employees who work for Advocate Health Care Network (Advocate), which operates hospitals, inpatient, and outpatient treatment centers through northern Illinois, and are members of Advocate’s retirement plan. Advocate formed in 1995 as the result of a merger between two religiously affiliated hospital systems (though neither system was owned or financially operated by the church with which it was affiliated). Advocate is also affiliated with a church, and though it is not owned or financially operated by the church, it maintains contracts with the church and “affirms [the church’s] ministry.” The plaintiffs in this case sued Advocate and argued that the Advocate retirement plan is subject to ERISA, and therefore Advocate has breached its fiduciary duty by failing to adhere to ERISA’s requirements. The defendants moved for summary judgment because the Advocate plan fell under the ERISA exemption for church plans. The district court denied the motion because it determined that a plan established and maintained by a church-affiliated organization was not a church plan within the meaning of the statutory language. The U.S. Court of Appeals for the Seventh Circuit affirmed, and this case was consolidated with two other ones presenting the same issue before the Supreme Court.

Question

Does the exemption to the Employee Retirement Income Security Act of 1974 (ERISA) for church plans apply when the plan is maintained by an otherwise qualifying church-affiliated organization even though a church did not establish the plan?