Press Release

Supreme Court protects nun-run hospitals Safeguards religious hospitals from class-action lawyers seeking millions in attorney fees

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Ryan Colby 202-349-7219 media@becketlaw.org

Additional Information

WASHINGTON, D.C. – Today in Advocate Healthcare Network v. Stapleton, the U.S. Supreme Court voted 8-0 to protect. religious hospitals founded and run by nuns, allowing them to continue providing generous benefits for their employees as well as free health services to their inner city communities. The ruling rejects absurd claims from class-action lawyers that these Catholic and Protestant religious hospitals had to use the same sort of for-profit pension plans used by corporations such as Exxon or Walmart. That would have forced these hospitals to divert crucial funds from their charitable programs or even permanently close their doors.

Churches were the first organizations in the U.S. to provide pension plans to their employees. Today, these faith-driven hospitals provide generous benefits to their employees through comprehensive church pension plans as well as much needed health services to their surrounding communities. This ruling confirms what government agencies like the IRS have recognized for more than 30 years: that hospital ministries are part of the larger church and can offer tax-exempt church pension plans under The Employee Retirement Income Security Act (ERISA).

“The Supreme Court got it right,” said Eric Rassbach, deputy general counsel at the religious liberty law firm Becket, which filed a friend-of-the-court brief on behalf of the hospitals. “Churches—not government bureaucrats and certainly not ambulance chasers—should decide whether hospitals are part of the church. It is simple common sense that nuns, soup kitchens, homeless shelters, seminaries, nursing homes, and orphanages are a core part of the church and not an afterthought.”

In reaching its decision, the Supreme Court recognized that the IRS’s artificial distinction between houses of worship and religious organizations that serve the poor “disfavors” religious social service organizations. Over the past four years, class-action lawyers have brought nearly 100 lawsuits against various Catholic and Protestant hospitals around the country, arguing that these nonprofit hospitals had broken the law by participating in nonprofit church pension plans instead of using lower-benefit pension plans designed for large for-profit corporations like Exxon and Walmart.

The lawyers argued that serving others is not part of being a “church” and therefore religious hospitals and other religious ministries cannot use church pension plans. This ignores a core part of what churches do, includes going into the community to feed the hungry, serve the homeless, distribute refugee relief, and more. This is why, for decades, Congress and the IRS have allowed religious non-profits to provide church pension plans for their employees instead of for-profit pension plans. Had the class-action lawyers prevailed, they would have received millions of dollars in attorneys’ fees, robbing the hospitals of funds needed to help the poor and needy.

“Faith for most religious Americans means being out in the community serving with and for others, particularly the least among us,” said Rassbach. “Thanks to this ruling, these hospital ministries can continue following their faith, helping their communities, and providing generous pension plans for their employees.”

Becket filed an amicus brief defending Advocate Health Care Network and other religious hospitals in January 2017.

For more information or to arrange an interview with a Becket attorney, please contact Melinda Skea at media@becketlaw.org or 202-349-7224. Interviews can be arranged in English, Chinese, French, German, Portuguese, Russian, and Spanish.

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 Becket is a non-profit, public-interest law firm dedicated to protecting the free expression of all religious traditions and has a 100% win-rate before the United States Supreme Court.For over 20 years, it has successfully defended clients of all faiths, including Buddhists, Christians, Jews, Hindus, Muslims, Native Americans, Sikhs, and Zoroastrians(read more here).