Holy Cross Settlement Webpage
Welcome to the Butler v. Holy Cross Hospital Settlement website. This website is intended to keep class members informed regarding the Class Action Settlement of the case Butler, et al. v. Holy Cross, et al. No. 16-05907 (N.D. Ill). While the District Court has approved the Notice of Proposed Settlement and ordered that certain documents filed with the Court be posted on this website, the content of this website is the responsibility of Plaintiffs’ Counsel, and has not been approved by the Court.
This case was filed in federal district court in Illinois on June 6, 2016 against Holy Cross Hospital (“Holy Cross”), Sinai Health System (“Sinai”) and various individual defendants (collectively, the “Defendants”). The case relates to the Pension Plan for Employees of Holy Cross Hospital, a defined benefit pension plan.
The complaint alleges that Defendants denied the Plan’s participants and beneficiaries the protections of the Employee Retirement Investment Security Act (“ERISA”) by claiming that the Plan was a “church plan,” and therefore exempt from ERISA. The complaint alleges that because the Plan is not a “church plan,” Defendants violated ERISA in a variety of ways. The complaint also alleges that application of the church plan exemption to the Plan would violate the Establishment Clause of the Constitution.
Shortly after the complaint was filed, the parties agreed to put the litigation on hold while they went to mediation. While the litigation was on hold, the parties actively engaged in settlement negotiations. This included conducting an analysis of Defendants’ financial condition and consulting with professionals about Defendants’ financial condition, as well as participating in two face-to-face mediation sessions with a professional mediator. The parties also spoke telephonically numerous times to agree on the terms of the settlement. Finally, on March 1, 2017, the parties signed a Settlement Agreement, which they filed with the Court for the Court’s preliminary approval.
The Settlement Class
On March 9, 2017, the Honorable Manish S. Shah issued an Order Preliminarily Approving Settlement on behalf of the following class:
- All Plan participants or Plan beneficiaries who received a distribution from the Plan on December 31, 2015, in connection with the Plan’s intended termination and (i) who were not later identified as having died prior to September 1, 2015; or (ii) who were not included in the Plan’s distribution on December 31, 2015, in connection with the Plan’s intended termination, but who were identified after December 31, 2015, as being eligible for a benefit prior to the Settlement’s effective date. Excluded from the class are the Individual Defendants named in the Complaint.
The Settlement provides for a total of approximately $9 million in exchange for a release of all claims (as defined in the Settlement Agreement) against Defendants. The approximately $9 million consists of two components.
- The first is a $4,000,000.00 ($4 million) payment which will be deposited into an interest-bearing escrow account from which Plaintiffs’ court-approved attorneys’ fees and expense reimbursement, and incentive awards to Named Plaintiffs will be paid. This net amount, or “Plan Payment,” will then be contributed to the Plan.
- The second component is approximately $5.1 million (less amounts for Plan operating expenses) in undistributed assets being held in the Plan Trust (the “Plan Trust Amount”).
Following the Settlement, the Parties anticipate that the total amount that will be available for distribution from the Plan after satisfaction of all Plan expenses necessary to calculate and process the distribution of the Settlement, will be approximately $8.4 million. After this distribution, Defendants intend to fully liquidate and formally terminate the Plan. Distributions of the Settlement will be made only if a) the Court approves the Settlement and b) that approval is upheld if there are any appeals.
Released Claims and Fairness Hearing
The Court did not decide who was right: instead, both parties have agreed to the Settlement. The Settlement will avoid the costs and risks of a trial while ensuring that all Settlement class members are treated fairly. The Named Plaintiffs and Class Counsel believe that this Settlement is in the best interest of the Settlement class members. As a result of the Settlement, the Settlement Class releases the claims against Defendants pertaining to the church plan exemption (these claims are defined in the Settlement Agreement).
The Court will hold a Fairness Hearing on June 29, 2017 at 10:00 a.m., at the U.S. District Court for the Northern District of Illinois to consider the fairness of the proposed Settlement. The Court will also hear any objections and arguments concerning the proposed Settlement’s fairness at this time. No benefits can be issued to class members until after the Court grants final settlement approval and the Settlement becomes Final.
Any member of the Settlement Class who wishes to object to the fairness, reasonableness, or adequacy of the Settlement, to any term of the Settlement Agreement, to the application for payment of attorneys’ fees and expenses, or to the application for Incentive Payment Awards for the Named Plaintiffs, may timely file an Objection in writing no later than June 1, 2017. All written objections and supporting papers must: (1) clearly identify the case name and number “Butler, et al. v. Holy Cross Hospital, et al., Case No. 16-cv-05907-MSS;” (2) be filed with the Court and postmarked and mailed or faxed to Class Counsel and Defendants’ Counsel at the addresses below on or before June 1, 2017; (3) set forth the objector’s full name, current address, and telephone number; (4) set forth a statement of the position the objector wishes to assert, including the factual and legal grounds for the position; (5) set forth the names and a summary of testimony of any witnesses that the objector might want to call in connection with the Objection; (6) provide copies of all documents that the objector wishes to submit in support of his/her position; (7) provide the name(s), address(es) and phone number(s) of any attorney(s) representing the objector; (8) state the name, court, and docket number of any class action litigation in which the objector and/or his/her attorney(s) has previously appeared as an objector or provided legal assistance with respect to an objection; and (9) include the objector’s signature.
The addresses for filing objections with the Court and service on counsel are as follows:
To the Court:
Clerk of the Court
United States District Court Northern District of Illinois
219 South Dearborn Street
Chicago, IL 60604
To Class Counsel:
Karen L. Handorf
Julie Goldsmith Reiser
COHEN MILSTEIN SELLERS & TOLL, PLLC
1100 New York Ave., NW, Suite Fifth Floor
Washington, DC 20005
Fax: (202) 408-4699
Lynn Lincoln Sarko
KELLER ROHRBACK L.L.P.
1201 Third Avenue, Suite 3200
Seattle, WA 98101-3052
Fax: (206) 623-3384
KELLER ROHRBACK L.L.P.
3101 North Central Ave., Suite 1400
Phoenix, AZ 85012
Fax: (602) 248-2822
Mark D. DeBofsky (IL Bar No. 3127892)
DEBOFSKY SHERMAN & CASCIARI P.C.
200 W. Madison St., Suite 2670
Chicago, Illinois 60606
Fax: (312) 929-0309
To Defendants’ Counsel:
Stacey C.S. Cerrone
Lindsey H. Chopin
PROSKAUER ROSE, LLP
650 Poydras Street, Suite 1800
New Orleans, LA 70130
Fax: (504) 310-2022
Edward C. Young
PROSKAUER ROSE, LLP
70 W. Madison St., Suite 3800
Chicago, IL 60602
Fax: (312) 962-3551
Q: How do I know whether I am part of the Settlement?
The Court has certified the Action as a class action. You are a member of the Settlement Class if you received a distribution from the Plan on December 31, 2015, in connection with the Plan’s purported termination and (i) you were not later identified as having died prior to September 1, 2015; or (ii) you were not included in the Plan’s distribution on December 31, 2015, in connection with the Plan’s intended termination, but you were identified after December 31, 2015, as being eligible for a benefit prior to the Settlement’s effective date; but (3) you are not a member of the Settlement Class if you are a Defendant in this lawsuit.
Q: What does the Settlement provide?
The total Settlement amounts to approximately $9 million. Defendants are required to deposit $4,000,000.00 ($4 million) in cash to an escrow account that will be used to settle Plaintiffs’ court-approved attorneys’ fees and expense reimbursement, and incentive awards to Named Plaintiffs. The net amount which remains in the escrow account after payment of Plaintiffs’ fees and incentives, and including interest, will then be contributed to the Plan (the “Plan Payment”).
Upon approval of this Settlement, the Plan Payment will be combined with the approximately $5.1 million in undistributed assets held in the Plan Trust (the “Plan Trust Amount”) for distribution to the Class. Following the Settlement, the Parties anticipate that the total amount that will be available for distribution from the Plan after satisfaction of all Plan expenses necessary to provide this class notice and calculate and process the distribution of the Settlement, will be approximately $8.4 million. This combined amount, less amounts for Plan operation expenses, will be allocated and paid to Class Members based upon the same actuarial assumptions and methodologies used for the Plan distributions that occurred in December 2015.
Q: How will the Settlement be distributed?
Members of the Settlement Class do not need to do anything with respect to the Settlement in this Action. Following the Settlement, the Parties anticipate that the total amount that will be available for distribution from the Plan after satisfaction of all Plan expenses necessary to calculate and process the distribution of the Settlement, will be approximately $8.4 million. This total will be allocated and paid to Class Members according to the actuarial assumptions and methodologies used for the Plan distributions that occurred in December 2015. Thereafter, the Plan will be terminated.
Q: How will the lawyers be paid?
Prior to the Fairness Hearing, Class Counsel will apply for an award of attorneys’ fees and expenses, and incentive awards for the Named Plaintiffs. The application for attorneys’ fees will not exceed $600,000, the expense request will not exceed $30,000, and the incentive awards sought for each Named Plaintiff will be $10,000. The attorneys’ fees, expense reimbursement, and incentive awards will be paid out of the $4 million escrow account.
To date, Class Counsel has not received any payment for their services in prosecuting this Action on behalf of the Settlement Class, nor have Class Counsel been reimbursed for their out-of-pocket expenses. The fee requested by Class Counsel would compensate all of Plaintiffs’ counsel for their efforts in achieving the Settlement for the benefit of the Settlement Class and for their risk in undertaking this representation on a contingency basis. The Court will determine the actual amount of the award.
Q: Can I exclude myself from the Settlement?
You do not have the right to exclude yourself from this Settlement. The Settlement Class was certified under Federal Rule of Civil Procedure 23(b)(1) (non-opt-out class) because the Court determined the requirements of that Rule were satisfied. This means it is not possible for any members of the Settlement Class to be excluded from this Settlement. As a member of the Settlement Class, you will be bound by any judgments or orders that are entered in the Action for all claims that were or could have been asserted in the Action against the Defendants or are otherwise included in the release under the Settlement.
Although members of the Settlement Class cannot opt out of the Settlement, they can object to the Settlement and ask the Court not to approve it.
If you are a Settlement Class member and you have questions regarding your eligibility for settlement amounts or the amounts paid to you from the Plan in December 31, 2015, please call the Holy Cross Hospital Pension Service Center at (888) 414-8820.
For inquiries about this Settlement, please email HCHsettlement@cohenmilstein.com. You may also contact Class Counsel at 1-866-275-5991 if you have questions or comments.
Please do not contact the Court. Its personnel will not be able to answer your questions.