Judge dismisses class action against Mercy Health over pension plan

By Sam Knef | Sep 10, 2018

ST. LOUIS – U.S. District Judge Catherine Perry recently dismissed a putative class action against Mercy Health brought by retirees who claim the pension fund has been underfunded in violation of the Employment Retirement Income Security Act (ERISA). 

In the U.S. District Court for the Eastern District of Missouri order dated Aug. 27, Perry held that she does not have jurisdiction to consider the plaintiffs' ERISA and constitutional claims against Mercy, which runs one of largest Catholic health care systems in the U.S., because the Mercy plan is an ERISA-exempt church plan.

"Without federal jurisdiction over those claims, I have no jurisdictional authority to consider plaintiffs’ state law claims, so I will dismiss this case in its entirety without prejudice for lack of jurisdiction," Perry wrote.

The case against Mercy Health, the Mercy Health Benefits Committee and the Mercy Health Stewardship Committee was filed by pensioners Sally Sanzone, who retired in 2003, and Gen Grasle, who retired in 2013.

According to court documents, Sanzone and Grasle both continue to receive benefits and neither claim that their benefits have been reduced. Their proposed class action claimed that the pension plan is not a "church plan" and therefore governed by ERISA and that the defendants breached their fiduciary duty under ERISA.

Perry wrote that in class action litigation, named plaintiffs have a duty to establish that they have standing to bring the cause of action, and if they cannot maintain the action on their own behalf they cannot seek relief on behalf of the class.

She also wrote that the plaintiffs made no specific allegations to suggest that they would have had a better funded pension if the church plan exemption did not apply to the Mercy plan.

"Plaintiffs do not allege a concrete harm or that the relief they seek would redress an alleged injury," she wrote. "While plaintiffs raise the specter of a potentially underfunded plan in the future without ERISA protections, they make no claim of any specific or concrete injury suffered by them as a consequence of being a participant in a church plan."

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