Dignity Health must face the bulk of a proposed class action accusing it of underfunding its pension plan by $1.8 billion after a California federal judge ruled Thursday that the plan participants adequately alleged that it didn’t qualify for a religious exemption in the Employee Retirement Income Security Act.
In his order, U.S. District Judge Jon S. Tigar denied Dignity Health’s request to toss the participants’ ERISA claims, holding that their allegations that the pension plan wasn’t properly maintained as a so-called church plan and that neither the hospital system nor its subcommittee were associated with a church were satisfactory at the motion to dismiss stage.
The participants also sufficiently pled the majority of their state law allegations, the judge ruled, though he dismissed one of the claims with leave to amend.
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The participants are represented by Lynn L. Sarko, Havila Unrein, Matthew M. Gerend, Juli E. Farris, Ron Kilgard and Chris Graver of Keller Rohrback LLP, and Karen L. Handorf and Michelle C. Yau of Cohen Milstein Sellers & Toll PLLC.
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