By Mark Pattison • Catholic News Service • Posted June 6, 2017

WASHINGTON (CNS) — The Supreme Court June 5 unanimously overturned decisions by three separate federal appellate courts and ruled that the retirement plans of three church-affiliated hospital systems — two of them Catholic — are indeed “church plans” as defined by Congress under a 1980 statute.

The 8-0 decision allows the hospital systems to continue to maintain their retirement plans as nonprofit entities instead of having to put them on the same footing as those established by for-profit companies.

The two Catholic hospital systems in the case were St. Peter’s Healthcare System, a teaching hospital and several other medical facilities sponsored by the Diocese of Metuchen, New Jersey, and Dignity Health, which runs a network of community hospitals throughout the country and maintains ties to the Catholic religious orders that initially sponsored some of its facilities.

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The case, Advocate Healthcare Network v. Stapleton, also involved Advocate Health Care Network, which operates 12 hospitals and about 250 other health care facilities in Illinois, and is associated with the Evangelical Lutheran Church in America and the United Church of Christ.

While the original definition of “church plan” meant “one ‘established and maintained … by a church’ — not by a church-affiliated nonprofit,” the amended Employee Retirement Income Security Act of 1980 “expands that definition to include any plan maintained by a principal-purpose organization, regardless of whether a church initially established the plan,” said Supreme Court Justice Elena Kagan, who wrote the court’s opinion.

“That interpretation has appeared in hundreds of private letter rulings and opinion letters issued since 1982, including several provided to the hospitals here,” Kagan added.

In the high court’s interpretation, “under the best reading of the statute,” she said, “a plan maintained by a principal-purpose organization therefore qualifies as a ‘church plan,’ regardless of who established it.”

“The Supreme Court got it right,” said a June 5 statement by 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,” as Rassbach derisively described the defendants’ attorneys, “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.”

Justice Neil Gorsuch did not take part in the hearing or the opinion, because he had not been confirmed to the court when the oral arguments in the case took place. Justice Sonia Sotomayor, while backing the ruling, issued a separate opinion.

“I am persuaded that it correctly interprets the relevant statutory text. But I am nonetheless troubled by the outcome of these cases,” Sotomayor said. “As the majority acknowledges … the available legislative history does not clearly endorse this result.

“That silence gives me pause: The decision to exempt plans neither established nor maintained by a church could have the kind of broad effect that is usually thoroughly debated during the legislative process and thus recorded in the legislative record,” she added.

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“And to the extent that Congress acted to exempt plans established by orders of Catholic sisters … it is not at all clear that Congress would take the same action today with respect to some of the largest health care providers in the country. Despite their relationship to churches, organizations such as petitioners operate for-profit subsidiaries,” Sotomayor said, pointing specifically to those run by Dignity Health.

In January, five Catholic entities joined in a friend-of-the-court brief in the case — the Association of Catholic Colleges and Universities, Catholic Charities USA, Catholic Relief Services, National Catholic Educational Association and the U.S. Conference of Catholic Bishops.

“Whether a ministry is part of the church is a question for the church,” the brief said, not a question for federal agencies or courts. “Asking courts to make those kinds of probing and individualized determinations would foster exactly the kind of ‘excessive entanglement between government and religion’ that the religion clauses of the First Amendment are intended to avoid.”