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Feather v. SSM Health

United States District Court, E.D. Missouri, Eastern Division

July 23, 2018

LISA FEATHER, STANLEY BEIERMANN, and HOLLY PYATT, on behalf of herself, individually, and on behalf of all others similarly situated, and on behalf of the SSM PENSION PLANS, Plaintiffs,
v.
SSM HEALTH, a Missouri Non-profit Corporation, THE PENSION COMMITTEE FOR THE RETIREMENT PLAN FOR SSM EMPLOYEES, JOHN and JANE DOES 1-20, MEMBERS OF THE PENSION COMMITTEE FOR THE RETIREMENT PLAN FOR SSM EMPLOYEES, each an individual, and JOHN and JANE DOES 21-40, each an individual, Defendants.

          OPINION, MEMORANDUM AND ORDER

          HENRY EDWARD AUTREY UNITED STATES DISTRICT JUDGE

         Introduction

         This matter is before the Court on Defendants' Motion to Dismiss Plaintiffs' First Amended Complaint. [Doc. No. 82]. Plaintiffs filed an Opposition to the Motion. Defendants filed a Reply. The Court heard oral arguments during a Special Session of Court at De Smet Jesuit High School on April 3, 2018. For the reasons set forth below, the Motion is granted.

         Facts and Background

         The Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq., regulates plans established or maintained by an employer. ERISA, however, exempts certain plans from its coverage, including church plans, as defined in ERISA § 3(33), 29 U.S.C. § 1002(33). 29 U.S.C. § 1003(b)(2). This is one of dozens of similar cases in which plaintiffs challenge whether a plan sponsored by a religiously affiliated hospital meets the requirements to be a church plan.

         Defendant SSM Health[1] is a tax-exempt, non-profit organization organized under the laws of the State of Missouri. SSM Health dates back to 1874 when the Sisters of Saint Mary (now the Franciscan Sisters of Mary) established a civil law organization bearing its name. In 1982, this organization became the corporation now known as SSM Health. In 2013, SSM Health Ministries, a public juridic person of the Roman Catholic Church, succeeded the Franciscan Sisters of Mary in its role overseeing the health system. SSM Health's Articles of Incorporation require it to be operated “in accordance with . . . the teachings and mission of the Roman Catholic Church.”

         SSM Health sponsors three defined benefit pension plans: the Retirement Plan for Employees of SSM Health Care, the Retirement Plan for Employees of St. Mary's Hospital, Centralia, Illinois, and the Retirement Plan for Employees of Certain Illinois Entities Related to SSM Health Care (“Plans”). The assets of the Plans are held in the SSM Health Care System Master Pension Trust (“Trust”). SSM Health's 2016 Audited Financial Statements show that the Trust has $1.39 billion in assets and SSM Health's qualified plans, including the Plans at issue here, have $2.16 billion in liabilities.

         Defendant SSM Health Care Pension Committee (“Pension Committee”) is the Plan Administrator of the Plans. SSM Health's board of directors appoints the members of the Pension Committee. As the Plan Administrator, the Pension Committee has the full and complete authority, responsibility, and control in its sole and absolute discretion over the administration of the Plans.

         Plaintiffs Lisa Feather, Stanley Beiermann, and Holly Pyatt are former employees and participants in the Plans.

         Plaintiffs initially filed this case in the United States District Court for the Southern District of Illinois on April 8, 2016. Defendants' motion to transfer the case to this Court pursuant to a forum selection clause was granted on October 25, 2016. On December 7, 2016, Defendants moved to stay the case pending the Supreme Court's resolution of three consolidated church plan cases, Advocate Health Care Network v. Stapleton, 137 S.Ct. 1652, 198 L.Ed.2d 96 (2017). This Court granted the stay. After the Supreme Court resolved the primary legal issue in this case, Plaintiffs filed a First Amended Complaint (“FAC”) on September 6, 2017, adding three state law claims.

         Plaintiffs' FAC alleges the following: Defendants have violated ERISA by treating the Plans as exempt church plans (Count I); the Pension Committee has violated ERISA's reporting and disclosure provisions (Count II); SSM Health has failed to provide minimum funding (Count III); SSM Health and the Pension Committee violated ERISA when offering improperly calculated lump sum benefits (Count IV); SSM Health failed to establish the Plans under written instruments compliant with ERISA (Count V); SSM Health failed to establish a trust compliant with ERISA (Count VI); Plaintiffs' benefits under ERISA should be clarified (Count VII); Defendants breached their ERISA fiduciary duties (Count VIII); the church plan exemption as applied to SSM Health is unconstitutional (Count IX); breach of contract against SSM Health (Count X); unjust enrichment against SSM Health (Count XI); and breach of common law fiduciary duty against the Pension Committee (Count XII).

         Defendants move to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of standing and, alternatively, pursuant to Rule 12(b)(6) for failure to state a claim upon which relief may be granted.

         Standard

         A motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) may be either a “facial” challenge based on the face of the pleadings, or a “factual” challenge, in which the court considers matters outside the pleadings. See Titus v. Sullivan,4 F.3d 590, 593 (8th Cir.1993); Osborn v. United States,918 F.2d 724, 729 n. 6 (8th Cir.1990). When a party makes a facial challenge, as Defendants do here, “the court restricts itself to the face of the pleadings and the non-moving party receives the same protections as it would defending against a ...


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