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Judge's Ruling in favor of worker in Rollins v. Dignity Health, December 12, 2013.

Judge's Ruling in favor of worker in Rollins v. Dignity Health, December 12, 2013.

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Published by tastysternburger
A 13-page ruling issued on December 12, 2013 in a lawsuit brought by a worker against Dignity Health for allegedly illegally underfunding workers' retirement plan by $1.2 billion. The worker was forced to file the class-action lawsuit after her union, SEIU-UHW, did nothing to defend workers against the company's practices.
A 13-page ruling issued on December 12, 2013 in a lawsuit brought by a worker against Dignity Health for allegedly illegally underfunding workers' retirement plan by $1.2 billion. The worker was forced to file the class-action lawsuit after her union, SEIU-UHW, did nothing to defend workers against the company's practices.

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Categories:Types, Business/Law
Published by: tastysternburger on Jan 09, 2014
Copyright:Attribution Non-commercial

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02/16/2014

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   F  o  r   t   h  e   N  o  r   t   h  e  r  n   D   i  s   t  r   i  c   t  o   f   C  a   l   i   f  o  r  n   i  a
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA STARLA ROLLINS, Plaintiff, v. DIGNITY HEALTH, et al., Defendants.  No. C13-1450 TEH ORDER DENYING DEFENDANTS’ MOTION TO DISMISS Defendants’ motion to dismiss came before the Court on November 4, 2013. Having considered the parties’ arguments and the papers submitted, the Court now DENIES Defendants’ motion for the reasons set forth below.
BACKGROUND
Defendant Dignity Health (“Dignity”)
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 is a non-profit healthcare provider with facilities in sixteen states. Compl. ¶ 1. From 1986 to 2012, Plaintiff Starla Rollins (“Rollins”) was employed as a billing coordinator at a Dignity-operated hospital.
 Id.
 ¶ 18. Based on her employment, Rollins will be eligible for pension benefits from Dignity’s  benefits plan (the “Plan”) when she reaches retirement age.
 Id.
Rollins alleges that Dignity’s Plan violates the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001
et seq
. Dignity contends that its Plan need not comply with ERISA because it is a “church plan,” which the statute explicitly exempts from its requirements. Rollins maintains that the Plan does not qualify as a church plan as
1
 The Defendants’ jointly moved to dismiss. Defendants in this case are Dignity Health, Herbert J. Vallier, a former Dignity Health official, and members of Dignity Health’s Retirement Plans Sub-Committee. For convenience, the Court refers to the Defendants’ collectively as “Dignity.”
Case3:13-cv-01450-TEH Document84 Filed12/12/13 Page1 of 13
 
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defined by ERISA and in the alternative, if the Plan is exempt, such an exemption violates the Establishment Clause of the First Amendment and is therefore void.
 Id.
 ¶¶ 162-164. On behalf of herself and others similarly situated, Rollins seeks declaratory relief that Dignity’s Plan is not a church plan exempt from ERISA, as well as injunctive relief requiring Dignity to conform the Plan to ERISA’s requirements. She also requests that Dignity make Plan participants whole for any losses they suffered as a result of its ERISA non-compliance and that Dignity pay any other statutory penalties and fees. Dignity moves to dismiss, contending that the Plan is a church plan, exempt from ERISA as a matter of law, and therefore, that Rollins’s allegations regarding ERISA violations fail to state a claim for relief.
LEGAL STANDARD
Dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(6) when a complaint’s allegations fail “to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In ruling on a motion to dismiss, a court must “accept all material allegations of fact as true and construe the complaint in a light most favorable to the non-moving party.”
Vasquez v. Los Angeles County
, 487 F.3d 1246, 1249 (9th Cir. 2007). To survive a motion to dismiss, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.”
 Bell Atlantic Corp. v. Twombly
, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
 Ashcroft v. Iqbal
, 556 U.S. 662, 678 (2009).
DISCUSSION
Enacted in 1974, ERISA was designed to ensure that employees actually receive the  benefits they are promised by establishing, among other requirements, minimum funding standards and disclosure obligations for employee benefits plans. Pub. L. No. 94-406, 88 Stat. 829 (1974), codified at 29 U.S.C. §§ 1001
et seq
. ERISA explicitly exempted
Case3:13-cv-01450-TEH Document84 Filed12/12/13 Page2 of 13
 
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   F  o  r   t   h  e   N  o  r   t   h  e  r  n   D   i  s   t  r   i  c   t  o   f   C  a   l   i   f  o  r  n   i  a
“church plans” from its requirements and explained “the term ‘church plan’ means [] a  plan established and maintained for its employees by a church or by a convention or association of churches.” 29 U.S.C. § 1002(33)(A) (1976). The statute permitted a church  plan to also cover employees of church agencies, but the permission was to sunset in 1982.
 Id.
 
In 1980, ERISA was amended to eliminate the 1982 deadline and to include other clarifications. The relevant statutory section, 29 U.S.C. § 1002(33), now reads as follows: (A) The term “church plan” means a plan established and maintained (to the extent required in clause (ii) of subparagraph (B)) for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501 of title 26. (B) The term “church plan” does not include a plan— (i) which is established and maintained primarily for the  benefit of employees (or their beneficiaries) of such church or convention or association of churches who are employed in connection with one or more unrelated trades or businesses (within the meaning of section 513 of title 26), or (ii) if less than substantially all of the individuals included in the plan are individuals described in subparagraph (A) or in clause (ii) of subparagraph (C) (or their beneficiaries). (C) For purposes of this paragraph— (i) A plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches includes a plan maintained by an organization, whether a civil law corporation or otherwise, the  principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement  benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches. (ii) The term employee of a church or a convention or association of churches includes— (I) a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry, regardless of the source of his compensation; (II) an employee of an organization, whether a civil law corporation or otherwise, which is exempt from tax under section 501 of Title 26 and which is controlled by or associated with a church or a convention or association of churches; . . . 29 U.S.C. § 1002(33).
Case3:13-cv-01450-TEH Document84 Filed12/12/13 Page3 of 13

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