ERISA – Church Plan

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United States Supreme Court

Case Name: Advocate Health Care Network, et al v. Stapleton, et al

Case No.: 16-74

Focus: ERISA – Church Plan

A plan maintained by a principal-purpose organization qualifies as a “church plan,” regardless of who established it.

“The term “church plan” initially “mean[t]” only “a plan established and maintained . . . by a church.” But subparagraph (C)(i) provides that the original definitional phrase will now “include” another—“a plan maintained by [a principal-purpose] organization.” That use of the word “include” is not literal, but tells readers that a different type of plan should receive the same treatment (i.e., an exemption) as the type described in the old definition. In other words, because Congress deemed the category of plans “established and maintained by a church” to “include” plans “maintained by” principalpurpose organizations, those plans—and all those plans—are exempt from ERISA’s requirements. Had Congress wanted, as the employees contend, to alter only the maintenance requirement, it could have provided in subparagraph (C)(i) that “a plan maintained by a church includes a plan maintained by” a principal-purpose organization—removing “established and” from the first part of the sentence. But Congress did not adopt that ready alternative. Instead, it added language whose most natural reading is to enable a plan “maintained” by a principal-purpose organization to substitute for a plan both “established” and “maintained” by a church. And as a corollary to that point, the employees’ construction runs aground on the so-called surplusage canon—the presumption that each word Congress uses is there for a reason. The employees read subparagraph (C)(i) as if it were missing the two words “established and.” This Court, however, “give[s] effect, if possible, to every clause and word of a statute.” Williams v. Taylor, 529 U. S. 362, 404.”

Reversed

Dissenting:

Concurring: Sotomayor

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.