Summary of the Lawsuit

This lawsuit alleges that the non-profit healthcare corporation Advocate Health Care Network and Subsidiaries (“Advocate”) is violating numerous provisions of the Employee Retirement Income Security Act (“ERISA”), while wrongfully claiming that the Advocate Health Care Network Pension Plan (the “Advocate Plan”) is exempt from ERISA’s protections because it is a “Church Plan.”

Summary of the Claims

The Complaint alleges that Defendants wrongfully claim that their pension plan is exempt from ERISA’s protections because it is a “Church Plan.”  As a result of the church plan exemption claimed by Advocate, the Advocate Plan does not provide protections to plan participants that are required under ERISA.  The Complaint alleges that the church plan exemption was intended to apply only to plans that were started or administered by churches themselves (or conventions or associations of churches).  The Complaint alleges that the Advocate Plan is not a “Church Plan” because Advocate is not a church or a convention or association of churches, and because the Advocate Plan was not established by a church or by a convention or association of churches.  The Complaint further alleges that the Defendants breached their duties under ERISA by, among other things: underfunding the Advocate Plan; failing to insure the assets of the Plan with federal pension insurance through the Pension Benefit Guarantee Corporation; failing to furnish Plaintiffs or any member of the class with a Pension Benefit Statement, Summary Annual Reports, Notification of Failure to Meet Minimum Funding, or Funding Notices; and failing to file an annual report with respect to the Advocate Plan with the Secretary of Labor.

In addition, the lawsuit alleges that the church plan exemption, as claimed by Advocate, is a violation of the Establishment Clause of the First Amendment of the Constitution because it is not necessary to further the stated purposes of the exemption, harms Advocate workers, puts Advocate competitors at an economic disadvantage, relieves Advocate of no genuine religious burden, and creates more government entanglement with alleged religious beliefs than compliance with ERISA creates.

Class Action Allegations

This lawsuit is brought on behalf of all participants or beneficiaries of the Advocate Health Care Network Pension Plan.

Excluded from the Class are any high-level executives at Advocate or any employees who have responsibility or involvement in the administration of the Plan, or who are subsequently determined to be fiduciaries of the Advocate Plan, including the Individual Defendants.

Status of the Litigation

Plaintiffs filed their Complaint on March 17, 2014 in the United States District Court for the Northern District of Illinois. On June 2, 2014, Defendants filed a Motion to Dismiss. The Court denied the Motion to Dismiss on December 31, 2014, holding that only a church or convention or association of churches may establish an ERISA-exempt church plan, and that Defendant Advocate’s Plan is not entitled to ERISA’s church plan exemption because it was not established by a church. Following that ruling, Defendants filed a Motion for Interlocutory Appeal and for Stay of Proceedings with the District Court on January 8, 2015, asking the District Court to certify their December 31, 2014 Order for appeal to the Seventh Circuit. The Court granted the Motion for Interlocutory Appeal on January 21, 2015, and certified the following question: “In order for an employee benefit plan to qualify as a ‘church plan’ under ERISA, 29 U.S.C. § 1003(b)(2) and § 1033, must the plan be established by a church (or by a convention or association of churches)?” The Seventh Circuit granted Defendants petition for leave to appeal on February 18, 2015.  The parties have fully briefed the Interlocutory Appeal, and Oral Argument for that Appeal is set for September 18, 2015.

Whom to Contact for More Information

If you are a member of the proposed class or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:

Karen L. Handorf, Esq.: khandorf@cohenmilstein.com
Mary J. Bortscheller, Esq.: mbortscheller@cohenmilstein.com
Maria Dewees, Paralegal mdewees@cohenmilstein.com
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, NW, Suite 500
Washington, DC 20005
Telephone:  888-240-0775 (Toll Free) or 202-408-4600