SUSAN WEBBER WRIGHT, District Judge.
Before the Court is plaintiff's oral motion for reconsideration of subject matter jurisdiction. The Court has reviewed the parties' briefs as well as the pertinent record in the case and finds that the Court lacks subject matter jurisdiction.
This case involves a dispute over the payment of benefits under a group long term disability insurance policy issued by defendant USAble Life ("USAble") to plaintiff's employer, St. Bernard's Medical Center ("SBMC"). Plaintiff Gail Hall ("Hall") filed a complaint in state court seeking damages for breach of contract. Hall alleged that while the claim involves an employee welfare benefit plan, the complaint is not subject to the provisions of the Employee Retirement Income Security Act of 1974 as amended, 29 U.S.C. ("ERISA") because it is a church plan and therefore exempt from ERISA. USAble removed the complaint to federal court based on ERISA. Hall moved to remand asserting again that the plan at issue is a church plan and thus her claim is not preempted by ERISA.
The judge to whom the case initially was assigned allowed limited discovery and then denied Hall's motions to remand, finding she had not met her burden of proof that the plan was a church plan. Subsequently, Hall filed a motion for summary judgment and the case was transferred to another judge. At a hearing on the summary judgment motion, Hall again raised the issue of subject matter jurisdiction. The judge recused and the case was transferred to this Court. The Court denied without prejudice Hall's motion for summary judgment and directed the parties to file briefs on the issue of subject matter jurisdiction.
Hall argues that the order denying her motions to remand erroneously placed the burden of proof on her to establish the case should not be removed and that the court misapplied the law in finding the
"[T]he doctrine of the law of the case posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case. This rule of practice promotes the finality and efficiency of the judicial process by protecting against the agitation of settled issues." Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 815-16, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988) (internal citations and quotations omitted). The Supreme Court also noted in Christianson, a case in which two federal courts each insisted that the other had jurisdiction, that "[t]here is no reason to apply law-of-the-case principles less rigorously to transfer decisions that implicate the transferee's jurisdiction. Perpetual litigation of any issue-jurisdictional or non-jurisdictional-delays, and therefore threatens to deny justice." Id. at 816 n. 5, 108 S.Ct. 2166.
Subject matter jurisdiction is something the courts have a duty to examine at all stages of the litigation, see Crawford v. F. Hoffman-La Roche, Ltd., 267 F.3d 760, 764 n. 2 (8th Cir.2001), and the law of the case doctrine does not foreclose reconsideration of subject matter jurisdiction. See Baca v. King, 92 F.3d 1031, 1035 (10th Cir.1996) (law of the case doctrine not a fixed rule that prevents a federal court from determining questions of its own subject matter jurisdiction in a given case); DiLaura v. Power Authority of State of New York, 982 F.2d 73, 77 (2nd Cir.1992) (subject matter jurisdiction particularly suited for reconsideration; doctrine of law of the case permits change of position if it appears that the court's original ruling was erroneous).
The Court finds that because it has a duty sua sponte to examine subject matter jurisdiction at all stages of the litigation, the law-of-the-case doctrine does not apply to the previous ruling.
"Removal based on federal question jurisdiction is governed by the well pleaded complaint rule: jurisdiction is established only if a federal question is presented on the face of the plaintiff's properly pleaded complaint." Pet Quarters, Inc. v. Depository Trust and Clearing Corp., 559 F.3d 772, 779 (8th Cir.2009). As the Supreme Court has recognized, however,
Aetna Health, Inc. v. Davila, 542 U.S. 200, 207-08, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) (internal citations, quotations, and alterations omitted). The parties do not dispute that ERISA's civil enforcement provision, 29 U.S.C. § 1132(a), has such preemptive force that it converts an ordinary state common law complaint into one stating a federal claim. However, the parties disagree about whether the plan should be considered a church plan and therefore exempted from ERISA application
Generally, the party seeking removal and opposing remand has the burden of establishing federal subject matter jurisdiction. See In re Business Men's Assur. Co. of America, 992 F.2d 181, 183 (8th Cir.1993). USAble argues, however, that once it made a prima facie showing that Hall's claim for benefits under an employee welfare benefit plan is preempted by ERISA, it is Hall's burden to prove an exception to ERISA's jurisdiction. In support, USAble cites cases involving the Class Action Fairness Act, 28 U.S.C. § 1332 et seq. ("CAFA"). The CAFA expands the subject matter jurisdiction of federal courts over class actions where there is minimal diversity and the amount in controversy exceeds $5,000.00.
ERISA applies "to any employee benefit plan if it is established or maintained—(1) by any employer engaged in commerce..." 29 U.S.C. § 1003(a). There are several different types of employee benefit plans which are exempt from enforcement under ERISA, one of which is known as a "church plan." 29 U.S.C. § 1003(b)(2). In ruling on motions to remand where the plaintiff asserted the court lacked subject matter jurisdiction because the employee benefit plan was a church plan and thus not subject to preemption, several district courts placed the burden on the defendant to establish the plan was not a church plan. In Goetz v. Greater Georgia Life Ins. Co., 554 F.Supp.2d 831 (E.D.Tenn. 2008), a former employee brought an action in state court for long-term disability benefits. Defendants removed to federal court, alleging federal question jurisdiction and preemption of state claims under ERISA. Plaintiff moved to remand on the basis that the plan was a church plan that was exempted from ERISA. In denying plaintiff's motion, the court found defendant "provided sufficient evidence ... for this court to determine that [the employer] does not constitute a "church" for purposes of ERISA." Id. at 837. In Geter v. St. Joseph Healthcare Systems, Inc., 575 F.Supp.2d 1244 (D. New Mexico 2008), the claimant brought a state court action under a long-term disability plan offered by his employer. Defendants removed the case based on the argument that the plan was not a church plan. The plaintiff filed a motion to remand. The court placed the burden on the defendant, the party opposing remand, to show jurisdiction by a preponderance of the evidence. The court said:
Id. at 1248. In Welsh v. Ascension Health, 2009 WL 1444431 (N.D.Fla. May 21, 2009), the plaintiff moved for remand based on the argument that the plan was a church plan to which ERISA did not apply. The district court concluded that Ascension, the party that removed the case, did not meet its burden of establishing that subject matter jurisdiction was proper. See also Cambron v. Usable Life Ins. Co., 2007 WL 1381632 *1 n. 1 (E.D.Ark. May 10, 2007) (because plaintiff moved for summary judgment as opposed to remand on contention that disability plan was "church plan" under ERISA, plaintiff had burden of proof).
In Breuer v. Jim's Concrete of Brevard, Inc., 538 U.S. 691, 698, 123 S.Ct. 1882, 155 L.Ed.2d 923 (2003), the Supreme Court stated: "Since 1948, therefore, there has been no question that whenever the subject matter of an action qualifies it for removal, the burden is on a plaintiff to find an express exception." When a complaint seeks benefits under an ERISA plan, there is federal question jurisdiction. However, when a complaint seeks benefits under a church plan, there is no federal question. Thus, a defendant who removes the case has the burden to show federal question jurisdiction exists, and that burden includes establishing that the plan is not a church plan. The Court finds USAble's reliance on the CAFA cases unpersuasive and that USAble as the removing party, has the burden to show the Court has jurisdiction.
Church plans are not ERISA plans. Chronister v. Baptist Health, 442 F.3d 648, 651 (8th Cir.2006). ERISA defines "church plan" as "a plan established and maintained ... 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." 29 U.S.C. § 1002(33)(A). Title 29 U.S.C. § 1002(33)(C)(i) further provides:
For purposes of this paragraph—
Additionally, § 1002(33)(C)(iv) provides that "[a]n organization, whether a civil law corporation or otherwise, is associated with a church or a convention or association of churches if it shares common religious bonds and convictions with that church or convention or association of churches." 29 U.S.C. § 1002(33)(C)(iv). Another provision of 29 U.S.C. § 1002(33)(C)(ii)(II) defines the term "employee" of a church to include "an employee of an organization 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."
In Rinehart v. Life Ins. Co. of North America, 2009 WL 995715 (W.D.Wash. April 14, 2009), the court considered whether a long term disability plan sponsored by a hospital was a church plan as defined by ERISA. The court determined that a plan established by a corporation, controlled by or associated with a church, may qualify as a church plan in two ways: under subsection (C)(i) or under subsection (C)(ii)(II). The court stated:
Id. at *4.
"An organization is controlled by a church when, for example, a religious institution appoints a majority of the organization's officers or directors. To be `associated with a church,' the corporation must share `common religious bonds and convictions with that church or convention or association of churches.'" Lown v. Continental Cas. Co., 238 F.3d 543, 547 (4th Cir.2001) (internal citations omitted).
The record reflects that the Olivetan Benedictine sisters
The OBS is the sole member of SBHealthcare. The Mother Superior of the Olivetan Benedictine sisters is the chair of the Board of Directors of SBHealthcare. SBHealthcare owns and controls the hospital. It is the sole shareholder of the hospital.
According to Warren Shull, the business manager for the OBS, the Catholic Church has certain rules that it wants followed if the Church is going to sponsor and put its name on a hospital as a Catholic hospital.
SBMC obtained its status and has operated as a non-profit corporation for all relevant years as a Catholic organization under the Official Catholic Directory
For purposes of its pension plan, SBMC contends that it is entitled to status as a "church plan."
The OBS are the sole members of the board of directors of SBHealthcare, which controls SBMC. Five members of the OBS as well as the business manager for OBS serve on the 13-member board of directors for SBMC. Some of the sisters have made personal monetary contributions to SBMC, but its funding comes from self-pay patients as well as Medicare, Medicaid, private insurance, and grants. The directives for Catholic health care that SBMC adopted require, among other things, that pastoral care personnel work in association with the local parish; that the director of pastoral care be a Catholic; that it have priests assigned to the hospital to provide the sacraments; that it treat patients in accordance with Catholic teaching; and that health care decisions are to be followed as long as they do not contradict Catholic principles. The directives address beginning of life issues, such as contraception and fertilization.
USAble argues that none of the three major factors mentioned in Chronister apply to SBMC. It states that the OBS does not have a majority on the SBMC board, that SBMC receives virtually no financial support from the Catholic Church,
Plaintiff counters that the Sisters are the sole members of the SBHealthcare's Board of Directors, which controls SBMC, and five sisters as well as the business manager sit on the thirteen—member governing board of SBMC. Although SBMC may not receive direct financial assistance from the Roman Catholic Church, SBMC does receive favorable tax treatment, operating as a Catholic non-profit corporation under the OCD, and sought and received church plan status for its pension plan.
In Chronister, the court held that Baptist Health, a nonprofit corporation, which owns and operates hospitals, was not controlled by or associated with the Baptist church and, therefore, its welfare-benefit plan was not a church plan. The court stated:
442 F.3d at 653.
Unlike in Chronister, here the evidence indicates SBMC has ties with the Roman Catholic Church. The sole member of SBMC is SBHealthcare, which is governed by OBS. The Mother Superior of the Olivetan Benedictine Sisters is chairman of the Board of Directors of SBHealthcare and the remainder of the board members are sisters. SBMC pays the OBS for strategic planning; five sisters and the OBS business manager are on the thirteen-member board of directors of SBMC. The SBMC adheres to Catholic ethical and religious directives, priests are assigned to the hospital to provide the sacraments, and the director of pastoral care must be a Catholic.
The Court finds USAble has failed to carry its burden of proof that the long-term disability plan is not a church plan. The Court further finds that even if Hall has the burden of proof to establish the plan is a church plan, she has carried the burden of establishing that SBMC is controlled by or associated with the Catholic church. The Court thus finds it lacks subject matter jurisdiction.
IT IS THEREFORE ORDERED that this case is remanded to Pulaski County Circuit Court.
