Medina v. Catholic Health Initiatives et al

Filing 214

ORDER sustaining objection 207 and rejecting Recommendation of the United States Magistrate Judge 199 . Denying 140 Motion for Partial Summary Judgment, denying as moot 213 Motion for Leave, by Judge Robert E. Blackburn on 8/26/2014.(trlee, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 13-cv-01249-REB-KLM
JANEEN MEDINA, individually, and on behalf of all others similarly situated, and on
behalf of the CHI Plans,
Plaintiff,
v.
CATHOLIC HEALTH INITIATIVES, a Colorado corporation, et al.,

ORDER SUSTAINING OBJECTION TO AND REJECTING
RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Blackburn, J.
The matters before me are (1) the Recommendation of United States
Magistrate Judge [#199],1 filed July 9, 2014; and (2) Defendants’ Objections to
Recommendation of Magistrate Judge [#207], filed July 20, 2014.2 The magistrate
judge recommends that Plaintiff’s Motion for Partial Summary Judgment [#140],
filed January 20, 2014, be granted as to plaintiff’s request for a declaratory judgment
finding that defendant Catholic Health Initiatives’ benefit plan (the “CHI Plan”) is not a
“church plan” within the meaning of 29 U.S.C. § 1003(b)(2), and thus is not exempt from

1

“[#57]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s electronic case filing and management system (CM/ECF). I use this
convention throughout this order.
2

The issues raised by and inherent to the motion for partial summary judgment are fully briefed,
obviating the necessity for evidentiary hearing or oral argument. Thus, I deny as moot Defendants’
Motion for Oral Argument on Defendants’ Objections to Magistrate Judge’s Recommendation
Regarding Plaintiff’s Motion for Partial Summary Judgment [#213], field August 18, 2014. The motion
stands submitted on the briefs. Cf. FED. R. CIV. P. 56(c) and (d). Geear v. Boulder Community Hospital,
844 F.2d 764, 766 (10th Cir.) (holding that hearing requirement for summary judgment motions is satisfied
by court's review of documents submitted by parties), cert. denied, 109 S.Ct. 312 (1988).

the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et
seq. I respectfully disagree with the magistrate judge’s interpretation of the relevant
provisions of the statute, and thus respectfully reject the recommendation and deny
plaintiff’s motion for partial summary judgment.
By this lawsuit, plaintiff seeks a declaration that the CHI Plan is not an exempt
“church plan” under ERISA because it was not established by a church. The
requirements of ERISA are not applicable to employee benefit plans which qualify as
“church plan” within the meaning of the statute. 29 U.S.C. § 1003(b)(1). The term
“church plan” is defined by statute as
. . . a plan established and maintained (to the extent required
in clause (ii) of subparagraph (B)) for its employees (or their
beneficiaries) by a church or by a convention or association
of churches which is exempt from tax under section 501 of
Title 26.
29 U.S.C.A. § 1002(33)(A). That definition is further explicated in subsection (C):
For purposes of this paragraph –
(i) A plan established and maintained for its employees (or
their beneficiaries) by a church or by a convention or
association of churches includes a plan maintained by an
organization, whether a civil law corporation or otherwise,
the principal purpose or function of which is the
administration or funding of a plan or program for the
provision of retirement benefits or welfare benefits, or both,
for the employees of a church or a convention or association
of churches, if such organization is controlled by or
associated with a church or a convention or association of
churches.
Id. § 1002(33)(C)(i). Relying on two recent district court cases, the magistrate judge
concluded that subsection (C)(i) modifies subsection (A) only as to the requirement
regarding who may maintain the plan, but that the statute still requires that the plan first
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be established by a church. Because the CHI Plan ostensibly is not a church,3 the
magistrate judge concluded that it could not satisfy the establishment requirement of
subsection (A).
I must respectfully reject this conclusion. The starting point of any effort at
statutory interpretation is the language of the statute, which, if plain and unambiguous
within the context of the particular dispute before the court, is dispositive. Barnhart v.
Sigmon Coal Co., 534 U.S. 438, 450, 122 S.Ct. 941, 950, 151 L.Ed.2d 908 (2002).
Relying on two recent district court decisions, see Kaplan v. Saint Peter's Healthcare,
2014 WL 1284854 (D.N.J. March 31, 2014); Rollins v. Dignity Health, – F.Supp.2d –,
2013 WL 6512682 (N.D. Cal. Dec. 12, 2013), the magistrate judge read section
1002(33) as unambiguous. I agree with that much of her conclusion, but find instead
that the plain language clearly supports the conclusion that a plan that meets the
requirements of subsection (C)(i) putatively qualifies for the exemption – without further,
separate proof of establishment by a church – if the remaining requirements of the
statute are otherwise met.4
Under the interpretation of the magistrate judge, adopting the rationale of the
Kaplan and Rollins courts, subsection (A) serves as a “gatekeeper” to subsection (C),
insofar as it requires that the plan be “established and maintained” by a church or

3

My resolution of the motion obviates any need to consider whether defendants have admitted –
judicially or otherwise – that CHI is not a church. Indeed, resolution of that issue in the context of this
motion would be premature, as plaintiff specifically confined her motion to the question of statutory
interpretation. (See Plaintiff’s Motion for Partial Summary Judgment at 3-4 [#140], filed January 29,
2014.) Definitive determinations as to the other disputed requirements of the church plan exemption –
whether CHI is “controlled or associated with” a church, as well as whether the CHI Plan is “maintained”
by an administrative church organization – must await future resolution.
4

As noted above (see supra note 4), that issue is not presently before me.

3

convention or association of churches. “That is, . . . section (A) sets the standard – only
a church can establish a church plan – and section (C) only describes how a plan under
section (A) can be maintained.” Overall v. Ascension, 2014 WL 2448492 at *10 (E.D.
Mich. May 13, 2014).
This interpretation is contrary to the plain meaning of the language of the statute.
By reiterating the same “established and maintained” language of subsection (A),
subsection (C) affirms that “established” and “maintained” are not two distinct elements,
but rather a singular requirement, a term of art, as used in the statute. Indeed, it is not
clear what establishment might mean without the additional requirement of
maintenance. If the two requirements are thus divorced, churches would be required to
devise and develop their own employee benefit plans themselves, rather than relying on
a third party administrator. This cannot have been Congress’s intent, and such a
conclusion is neither required nor supported by the language of the statute.
To the contrary, subsection (C) clearly evinces an intent to broaden the
availability of the exemption such that churches themselves need not be involved
directly in the administration of their employee benefit plans in order to qualify. To that
end, subsection (C) describes a particular way in which a church plan may meet the
requirement that it be “established and maintained” by a church – that is, if it is
maintained by an organization controlled by or associated with a church or convention
of churches. This interpretation is driven by the language of the subsection itself, which
states that a plan “established and maintained” as a church plan “includes” such a plan.
29 U.S.C. § 1002(33)(C)(i) (emphasis added). In other words, “under the rules of
grammar and logic, . . . if A is exempt and A includes C, then C is also exempt.”
4

Overall v. Ascension, – F.Supp.2d –, 2014 WL 2448492 at *11 (E.D. Mich. May 13,
2014) (citation and internal quotation marks omitted).
For these reasons, I respectfully reject the magistrate judge’s recommendation5
and deny plaintiff’s motion for partial summary judgment.
THEREFORE, IT IS ORDERED as follows:
1. That the Recommendation of United States Magistrate Judge [#199], filed
July 9, 2014, is, respectfully, REJECTED;
2. That the objections stated in Defendants’ Objections to Recommendation
of Magistrate Judge [#207], filed July 20, 2014, are SUSTAINED;
3. That Plaintiff’s Motion for Partial Summary Judgment [#140], filed January
20, 2014, is DENIED; and
4. That Defendants’ Motion for Oral Argument on Defendants’ Objections
to Magistrate Judge’s Recommendation Regarding Plaintiff’s Motion for Partial
Summary Judgment [#213], field August 18, 2014, is DENIED AS MOOT.
Dated August 26, 2014, at Denver, Colorado.
BY THE COURT:

5

My resolution of this threshold issue in favor of defendants further obviates the need to
consider, at least at this juncture, the other issues addressed in the recommendation.

5