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Franciscan Alliance, Inc. (fka Sisters of St. Francis Health Services, Inc.)

Cappello v. Franciscan Alliance, Inc.,
United States District Court for the Northern District of Indiana
Case No. 16-290

Case Overview

Plaintiffs allege that Franciscan Alliance, Inc., an Indiana non-profit corporation and one of the largest Catholic health care systems in the Midwest, is improperly claiming that its defined benefit pension plan, the Franciscan Alliance Pension Security Plan (the “Plan”), is exempt from the Employee Retirement Income Security Act of 1974 (“ERISA”), a federal law, pursuant to a statutory exemption intended for “church plans.”

Plaintiffs allege that the Plan does not meet the various statutory requirements for a church plan. Further, Plaintiffs allege that if the statute exempting church plans did apply to the Plan, the statute would, to that extent, be unconstitutional.  

Plaintiffs allege that Defendants are violating ERISA by, among other things:

  • failing to furnish Plaintiffs or any member of the proposed Class with Summary Plan Descriptions, Summary Annual Reports, Notifications of Failure to Meet Minimum Funding, or Funding Notices;
  • under-funding the Plan; and
  • failing to file annual reports with respect to the Plan with the Secretary of Labor.

Plaintiffs also allege, in the alternative, that if the Plan is a church plan, then Defendants have violated state law in the operation of the Plan.

Case Status

The Consolidated Class Action Complaint was filed on August 28, 2017. On March 27, 2019, Judge Robert L. Miller, Jr. denied Defendants’ motion to dismiss, allowing Plaintiffs’ claims to continue.

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