The employee retirement plans of religious-affiliated nonprofits are exempt from the protections and requirements of the federal pension law, a unanimous U.S. Supreme Court ruled on Monday.
The decision was a blow to multimillion-dollar class actions that seek to hold those plans liable for violating the federal law.
The high court, led by Justice Elena Kagan, rejected arguments from plaintiffs firms that the Employee Retirement Income Security Act of 1974, or ERISA, required a church to have originally established a “church plan” in order to qualify for an exemption from the employee-retirement law.
“This is the kind of case where you have to stare at the statutory language to understand why,” said Kagan, who read her opinion from the bench. In the end, however, it was “elementary logic” that certain plans of church-affiliated nonprofits count as “church plans” even though not actually administered by a church, she said.
The ruling was a significant victory for three religious-affiliated nonprofits that were represented in the high court by Lisa Blatt of Arnold & Porter Kaye Scholer.
Blatt’s clients are the target of class actions from firms that include Washington’s Cohen Milstein Sellers & Toll and Seattle’s Keller Rohrback.
Blatt had told the court that the two law firms sought “billions of dollars in retroactive liability and a wholesale upheaval in the administration of pension plans affecting religious employers and employees across the country.” Blatt argued in the high court in March.
In the trio of high court cases—Advocate Health Care Network v. Stapleton, Dignity Health v. Rollins and Saint Peter’s Healthcare System v. Kaplan—the justices reversed contrary rulings by the Third, Seventh and Ninth circuit courts of appeals.