Judge stands by order dismissing ERISA class action against Mercy

By Sam Knef | Nov 4, 2018

ST. LOUIS — U.S. District Judge Catherine D. Perry has denied a plaintiffs' motion to reconsider an order dismissing a proposed class action against Mercy Health that alleged under-funding of its pension fund in violation of the Employment Retirement Income Security Act (ERISA).

In her Aug. 27 ruling, Perry held that she did 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.

On Oct. 29, Perry stood firm in her decision in the U.S. District Court for the Eastern District of Missouri.

"Plaintiffs make no legal or factual arguments convincing me that my prior decision was in error," she wrote. "I am also not persuaded that I erred procedurally in my ruling. I will therefore deny the motion to alter or amend judgment."

According to the order, the plaintiffs had argued that Perry erred in reviewing materials outside the pleadings when considering defendants’ motion to dismiss and, further, that she determined "with finality" a legal issue that was not presented in court.

"By doing this, plaintiffs argue, I denied them the opportunity to not only present evidence but to present their own legal argument on the issue of subject-matter jurisdiction, and specifically, federal-question jurisdiction," she wrote. "Plaintiffs also contend that I erred when I considered the substance of the church-plan-exemption question by improperly conflating a merits determination with subject-matter jurisdiction."

Perry also disagreed with a contention that she "wrongfully" determined the merits of plaintiffs' claims—that defendants violated various provisions of ERISA that impose requirements relating to reporting and disclosure, minimum funding, written instruments, trusts, future benefits, and fiduciary obligations.

"I did not decide the merits of these claims because I did not have the jurisdiction to do so. In order to decide the merits of plaintiffs’ ERISA claims, I must have first been presented with an ERISA plan,” she wrote. “For the reasons stated in my Memorandum and Order, the plan at issue here was not an ERISA plan. Therefore, under well-established Eighth Circuit precedent, I did not have subject-matter jurisdiction over plaintiffs’ ERISA claims. Because of this determination, I had no choice but to dismiss plaintiffs’ ERISA claims for lack of subject-matter jurisdiction.”

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