Court Refuses To Permit Interlocutory Appeal In Case Challenging Compliance With Church Plan Exemption To ERISA

In Rollins v. Dignity Health, (ND CA, March 17, 2014), a California federal district court refused to permit an interlocutory appeal of a decision holding that the pension plan for employees of  Dignity Health, a 16-state non-profit Catholic healthcare provider, does not qualify for the "church plan" exemption in ERISA. (See prior posting.)  The court concluded that the issue presented does not rise to the level of a "controlling question of law" which must be shown to justify appeal before the case is finally decided.  The court said:

If Dignity’s plan were not exempt, the Court would still have to consider Dignity’s ERISA compliance. And if the Dignity plan was held to be exempt, the Court would then have to consider Rollins’s claim regarding the constitutionality of such an exemption. Given these complicated, possibly divergent, and even potentially convergent paths the litigation could take, the Court agrees with Dignity that an interlocutory appeal could significantly alter the course the litigation would take. Nevertheless, the Court concludes that the issue proposed for appeal would not so materially affect the entire nature of the litigation, or its outcome, to justify interlocutory review.

As reported by BNA Daily Report for Executives (subscription required), the case is one of five class actions around the country filed last year challenging pension plan sponsors' reliance on the church plan exemption to justify non-compliance with ERISA. A sixth class action raising the same kind of challenge was filed earlier this week.