This lawsuit, filed in the Northern District of Illinois, Eastern Division, alleged that the non-profit healthcare system Wheaton Franciscan Services, Inc. (“Wheaton Franciscan”) and Ascension Health, the company that acquired Wheaton Franciscan in March 2016, improperly claim that their defined benefit pension plan qualifies as a “Church Plan” under the Employee Retirement Income Security Act (“ERISA”). In operating their plan as a “Church Plan,” Wheaton Franciscan and Ascension Health do not comply with many protections afforded to pension beneficiaries under ERISA.  The lawsuit sought to compel the Wheaton Franciscan Retirement Plan to fully comply with ERISA.

On January 16, 2018, the Court finalized a settlement between the parties, in granting Plaintiffs' motions for final approval of the settlement and for attorneys' fees, reimbursement of expenses, and incentive awards to named Plaintiffs.

Summary of the Claims

The Complaint alleged that Ascension and Wheaton Franciscan were violating numerous provisions of ERISA, while wrongfully claiming that their retirement plan was exempt from ERISA’s protections because it was a “Church Plan.” The Complaint alleged that the plan was not a “Church Plan” because neither Wheaton Franciscan nor Ascension Health was a church or a convention or association of churches, and because the retirement plan had not been established by a church or a convention or association of churches.  The Complaint further alleged that Ascension and Wheaton Franciscan breached their duties under ERISA by, among other things:

  • Underfunding the plan by at least $134.5 million;
  • Impermissibly requiring participants to complete five years of service before participants became fully vested in their accrued benefits;
  • 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;
  • Causing the Plan to award benefits to employees in later years of service at a rate disproportionately higher than the rate for employees in earlier years of service, in violation of ERISA’s anti-backloading requirements; and 
  • Failing to notify participants of a significant reduction in the rates of future benefit accruals from 2009 onward.

In addition, the lawsuit alleged that the church plan exemption, as claimed by Wheaton Franciscan and/or Ascension Health, was a violation of the Establishment Clause of the First Amendment of the Constitution because it harmed Wheaton Franciscan workers, put Wheaton Franciscan’s competitors at an economic disadvantage, relieved Wheaton Franciscan and/or Ascension Health of no genuine religious burden, and created more government entanglement with alleged religious beliefs than compliance with ERISA would have created.

Class Action

This lawsuit was brought as a class action on behalf of all participants and beneficiaries of the Wheaton Franciscan Retirement Plan. Excluded from the Class are any high-level executives at Wheaton Franciscan or Ascension Health or any employees who have responsibility or involvement in the administration of the Plan, or who are subsequently determined to be fiduciaries of the Wheaton Franciscan Plan, including the Individual Defendants.

The class consists of all persons who, as of July 31, 2017, are former and/or current Plan participants, whether vested or non-vested, and their beneficiaries.

Status of the Litigation

Complaint and Motion to Transfer

Plaintiffs Bruce Bowen and Cheryl Mueller filed the initiating Complaint with the District Court on June 28, 2016.  On July 8, 2016, the case (“Bowen”) was designated as “related” to another class action lawsuit (“Curtis”), which was also filed against Wheaton Franciscan, although not against Ascension Health. The Bowen case was transferred to Judge Gary Feinerman, so that he could preside over both related cases. On July 20, 2016, Ascension Health and Wheaton Franciscan filed a motion asking Judge Feinerman to transfer the case out of Chicago and into St. Louis, Missouri. On October 31, 2016, Judge Feinerman denied the defendants’ motion, ruling that the case would remain in Illinois.

Leadership Dispute

On July 1, 2016, the law firm representing the Curtis Plaintiff filed a motion asking the Court to appoint them Interim Lead Class Counsel. Cohen Milstein and co-counsel Keller Rohrback, on behalf of the Bowen Plaintiffs, filed a brief in opposition, arguing that they were the law firm best equipped to helm the two related cases as Interim Co-Lead Class Counsel. On January 4, 2017, Judge Feinerman entered an order denying the Curtis law firm’s motion, consolidating the two cases, and appointing Cohen Milstein and Keller Rohrback Interim Co-Lead Class Counsel. As a result, Cohen Milstein and Keller Rohrback became the representatives of all Plaintiffs against all Defendants.


On September 1, 2017, after months of negotiation facilitated by a neutral, third-party mediator, Plaintiffs and Defendants signed a Settlement Agreement to resolve the claims of Plaintiffs in this case against all Defendants in exchange for certain ERISA-like protections for participants, as well as a guarantee that Defendants will pay the first $29,500,000 of benefits that are distributable from the Plan to Settlement Class Members. Plaintiffs filed an Unopposed Motion for Preliminary Approval of Settlement Agreement on the same day, September 1, 2017. Judge Feinerman entered an Order on September 13, 2017, granting preliminary approval to the settlement, preliminarily certifying the class, and scheduling a final fairness hearing.

On November 28, 2017, Plaintiffs filed a Motion for Final Approval of the Settlement Agreement, and Plaintiffs' Counsel filed a Motion for Award of Attorneys' Fees and Reimbursement of Expenses, and for Incentive Awards to the Named Plaintiffs. On January 16, 2018, Judge Feinerman held a Final Fairness Hearing in Federal District Court in Chicago, Illinois. Following the hearing, Judge Feinerman granted final approval of the settlement and entered judgment on the same day. The final approval order can be found here.

If you have received a Class Notice regarding the settlement, or if you believe you may be affected by this lawsuit, please visit the Wheaton Franciscan Settlement webpage for more information.

Whom to Contact for More Information

Julie G. Reiser, Esq.,

Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W., Fifth Floor
Washington, D.C. 20005
Telephone:  888-240-0775 (Toll Free) or 202-408-4600