Supreme Court freezes 9th Circuit's decision in ERISA church-plan exemption case

The United States Supreme Court has issued a stay of the 9th Circuit's ruling that a pension plan operated by Dignity Health does not qualify for ERISA’s church-plan exemption. Dignity Health v. Rollins (US Supreme Court 09/21/2016) [Text of Supreme Court order] The stay will remain in effect while the Court decides whether to grant certiorari in this case. [Text of petition for certiorari

[Update 10/04/2016: Dignity Health v. Rollins (ERISA church-plan exemption case) is SCOTUSblog petition of the day.] 

Starla Rollins brought a putative class action against her ex-employer Dignity Health claiming that Dignity Health has not maintained its pension plan in compliance with the Employee Retirement Income Security Act of 1974 (ERISA). Dignity Health conceded it has not complied with ERISA, but argued its plan qualifies for ERISA’s church-plan exemption.

The district court held that a pension plan must have been established by a church, or by a convention or association of churches, to qualify as a church plan. Because the district court found that Dignity Health’s pension plan was not established by a church, or by a convention or association of churches, the court awarded partial summary judgment to Rollins, ruling that Dignity Health’s pension plan must comply with ERISA.

On an interlocutory appeal, the 9th Circuit affirmed and remanded. Rollins v. Dignity Health (9th Cir 07/26/2017) [Text of 9th Circuit decision]

Dignity Health argued that its plan is exempt from ERIS because it is maintained by a church controlled or church-affiliated organization whose principal purpose or function is to provide benefits to church employees. But the 9th Circuit insists that the exemption applies only if it wasboth (1) established by a church or by a convention or association of churches and then (2) maintained either by a church or by a church-controlled or church-affiliated organization whose principal purpose or function is to provide benefits to church employees.

Dignity Health petitioned the Supreme Court for certiorari [Text of certiorari petition] on August 29, 2016, and Rollins' response is due October 17.

This is an interesting case because it raises the issue of whether the statutory exemption violates the 1st amendment because it discriminates against certain religious organizations by exempting plans established by churches, but not those established by other religious organizations.

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