Welcome to the Carver v. Presence Health Settlement website. This website is intended to keep class members informed regarding the Class Action Settlement of the case Carver v. Presence Health Network, No. 15-cv-02905 (N.D. Ill.). While the District Court approved the Notice of Proposed Settlement (the "Class Notice") 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.
Carver v. Presence Health Network is a case brought in the Northern District of Illinois under the Employee Retirement Income Security Act (“ERISA”). On April 2, 2015, Plaintiff Leslee Carver, a participant in the Resurrection Health Care Retirement Plan (the “RHC Plan”), filed a putative class action complaint against Presence Health Network and various other corporate and individual defendants, alleging violations of ERISA. The complaint was later amended several times and now names as additional plaintiffs Diane Eslinger, Lisa Jenkins, and Susan Phillips, all participants in the Provena Health Employees’ Pension Plan (the “Provena Plan”) (the RHC Plan and the Provena Plan are collectively referred to as the “Plans”).
The complaint alleges that Defendants denied ERISA protections to the participants and beneficiaries of the Plans, which are defined benefit pension plans that were sponsored by Presence Health Network, by claiming that the Plans qualify as ERISA-exempt “church plans.” The complaint further alleges that asserting this exemption caused Defendants to deny the Plans’ participants the protections of ERISA. These include, among other violations:
- underfunding the Plans by over $175 million;
- failing to furnish Plaintiffs or any member of the class with required statements and reports; and
- as to the RHC Plan, failure to provide an ERISA-compliant schedule for vesting.
The case was stayed on October 13, 2016, pending the Supreme Court’s resolution of an appeal in three other cases involving church plans. Following the Supreme Court’s June 5, 2017 ruling that held that pension plans need not be established by churches in order to qualify as ERISA-exempt church plans, as the Parties prepared to resume active litigation, they agreed to attempt to settle the case with the assistance of a mediator. The Parties and Ascension Health (another health care system that had signed a Letter of Intent to acquire the Presence health care system) continued to discuss settlement with the mediator’s assistance over the next several months, and were ultimately able to agree on the terms of a settlement on November 10, 2017. Ascension Health’s obligations under the settlement were contingent on it completing its acquisition of the Presence health care system.
On March 1, 2018, Ascension Health acquired Presence Care Transformation Corporation. Presence Care Transformation Corporation (“Presence”) is the statutory employer of the Presence Health hospitals’ employees and is the sole corporate member of the Presence Health hospital corporations and other business interests. In addition to acquiring Presence, Ascension Health also acquired all Presence entities other than Presence Health Network and Resurrection University. As of March 1, 2018, the Plans are no longer sponsored by Presence Health Network, but are sponsored by Ascension Health or a subsidiary of Ascension Health.
On March 8, 2018, the Court preliminarily approved the settlement. On May 25, Plaintiffs filed a Motion for Final Approval, and a Motion for Attorneys' Fees and Expenses, and for Incentives for Named Plaintiffs. On July 3, 2018, Plaintiffs filed a Reply in Support of their motions.
July 10, 2018, the hearing and ruling on motion was held; motions were granted and the civil case has been terminated.
The Settlement Class
On March 8, 2018, the Honorable Harry D. Leinenweber entered an Order Preliminarily Approving Settlement, Certifying the Class, Approving Notice to the Class, and Scheduling Final Approval Hearing. The Order is on behalf of the following class (the “Settlement Class”): “All persons who, as of November 30, 2017, are former and/or current participants in either or both of the Plans, whether vested or non-vested, and their beneficiaries.”
The Settlement provides that, as long as the Plans are sponsored by any of the Releasees (including Ascension Health), as defined in the Settlement Agreement, there is a guarantee of payment of the first $20,000,000 (twenty million dollars) of benefits that are distributable from either or both of the Plans’ trusts to Settlement Class members if either of the Plans is unable to pay such benefits. The guarantee is given by Ascension Health. . The Settlement also provides that Ascension Health, or any of the Releasees, may buy out this guarantee obligation at any time by making contributions to the Plans’ trusts in an aggregate total of $15,000,000 (fifteen million dollars). Upon the Plans’ trusts’ timely receipt of the $15,000,000 (fifteen million dollar) buyout amount, the guarantee obligation will be extinguished.
Additionally, the Settlement provides significant non-monetary equitable consideration, in that current participants in the Plans will receive certain ERISA-like reporting, disclosure, and administrative protections. For seven and one-half years, the Plans’ participants will receive notice on an annual basis about the funded status of the Plans and the retirement benefits that they have accrued. This annual notice will include, among other information, a summary of the Plans’ funding arrangements, a summary of the Plans’ expenses, a statement of the Plans’ liabilities and assets, information about the increase or decrease in net plan assets for the year, and summary information about the Plans’ total income. The Settlement Agreement also provides that for seven and one-half years, any amendment or termination of the Plans cannot reduce participants’ accrued benefits. Likewise, for the next seven and one-half years, if the Plans are ever merged with or into another plan, participants will be entitled to the same or greater benefits than they were before the merger.
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 at the U.S. District Court for the Northern District of Illinois on July 10, 2018, at 9:00 a.m. C.D.T. to consider the fairness of the proposed Settlement. At the hearing, the Court will also hear any objections and arguments concerning the proposed Settlement’s fairness. The Settlement will not be effective 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 an incentive fee for the Named Plaintiffs, may file an Objection in writing by June 12, 2018. All written objections and supporting papers must: (1) clearly identify the case name and number “Carver v. Presence Health Network, Case No. 15-cv-02905;” (2) be filed with the Court and either postmarked and mailed or faxed to Class Counsel and Defendants’ Counsel at the addresses below on or before June 12, 2018; (3) set forth your full name, current address, and telephone number; (4) set forth a statement of the position you wish 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 you might want to call in connection with the Objection; (6) provide copies of all documents that you wish to submit in support of your position; (7) provide the name(s), address(es) and phone number(s) of any attorney(s) representing you; (8) state the name, court, and docket number of any class action litigation in which you and/or your attorney(s) have previously appeared as an objector or provided legal assistance with respect to an objection; and (9) include your 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:
Lynn Lincoln Sarko
Laura R. Gerber
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
Michelle C. Yau
Mary J. Bortscheller, ARDC #6304457
Scott M. Lempert
COHEN MILSTEIN SELLERS & TOLL, PLLC
1100 New York Ave., NW, Suite Fifth Floor
Washington, DC 20005
Fax: (202) 408-4699
To Defendants’ Counsel:
Stacey C.S. Cerrone
PROSKAUER ROSE, LLP
650 Poydras Street, Suite 1800
New Orleans, LA 70130
Fax: (504) 310-2022
HOLIFIELD JANICH RACHAL & ASSOCIATES, PLLC
6415 West End Blvd.
New Orleans, LA 70124
Fax: (865) 566-0119
Q: How do I know whether I am part of the Settlement?
The Court has certified the Action as a class action preliminarily. You are a member of the Settlement Class if, as of November 30, 2017, you were a former and/or current participant in either or both of the Plans, whether vested or non-vested, or the beneficiary of such a participant.
Q: What does the Settlement provide?
The Settlement provides that, as long as the Plans are sponsored by any of the Releasees, as defined in the Settlement Agreement, there is a guarantee of payment of the first $20,000,000 (twenty million dollars) of benefits that are distributable from either or both of the Plans’ trusts to Settlement Class members if either of the Plans is unable to pay such benefits. The guarantee is given by Ascension Health. Should a corporate transaction occur where the Plans’ assets and liabilities covering Settlement Class Members transfer to a successor, Ascension Health will cause the successor to honor this commitment. The Settlement also provides that Ascension Health, or any of the Releasees, may buy out this guarantee obligation at any time by making contributions to the Plans’ trusts in an aggregate total of $15,000,000 (fifteen million dollars). Upon the Plans’ trusts’ timely receipt of the $15,000,000 (fifteen million dollar) buyout amount, the guarantee obligation will be extinguished.
The Settlement includes equitable provisions which mimic certain provisions of ERISA concerning plan administration, summary plan descriptions, notices (annual summaries, pension benefits statements, current benefit values), and the Plans’ claims review procedures. For seven and one-half years, the Plans’ participants with receive notice on an annual basis about the funding status of the Plans and the retirement benefits that they have accrued. The Settlement Agreement also provides that for seven and one-half years, any amendment or termination of the Plans cannot reduce participants’ accrued benefits. Likewise, for the next seven and one-half years, if the Plans are ever merged with or into another plan, participants will be entitled to the same or greater benefits than they were before the merger.
Q: How will the Settlement be distributed?
Because the Plans are defined benefit pension plans and not defined contribution plans with individual accounts, like a 403(b) plan or 401(k) plan, the guarantee, if ever paid in the future, will be contributed to the Plans’ trust funds as a whole, rather than to individual Plan participants and beneficiaries. Your pension benefit will not increase as a result of the Settlement. You will remain entitled to the benefit you have accrued pursuant to the Plans’ terms, and under the Settlement, for seven and one-half years, the Plans cannot be amended to reduce your accrued benefit. The Settlement also provides significant non-monetary equitable consideration, in that current participants in the Plans will receive certain ERISA-like administrative protections, including certain annual notices for the next seven and one-half years.
Members of the Settlement Class do not need to do anything in order to obtain the benefits and protections provided by the Settlement in this case.
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 total amount that Class Counsel will seek for fees, expenses, and incentive awards will not exceed $1.55 million. This amount will be paid entirely by Defendants or Ascension Health. Any payment of attorneys’ fees, expenses, and incentive awards to Named Plaintiffs will not reduce the amount of the guarantee or the amount of the buy-out.
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 the Settlement. For settlement purposes, the Action was certified under Federal Rule of Civil Procedure 23(b)(1) and/or 23(b)(2) (non-opt-out class) because the Court determined the requirements of that rule were satisfied. Thus, it is not possible for any of the members of the Settlement Class to exclude themselves from the 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 Defendants or are otherwise included in the release under the Settlement. The Court resolves the issues for all Class Members.
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 the Settlement.
For inquiries about this Settlement, please email or call Class Counsel at (888) 684-6642 if you have questions or comments.
Please do not contact the Court. Its personnel will not be able to answer your questions.