St. Joseph’s Hospital and Medical Center Settlement
Welcome to the Garbaccio v. St. Joseph’s Hospital and Medical Center Settlement website. This website is intended to keep Class members informed regarding the Class Action Settlement. While the District Court has approved the Notice of Proposed Settlement (the “Class Notice”) and ordered that certain documents filed with the Court be posted on this website, the content of this website is the responsibility of Plaintiffs’ Counsel and has not been approved by the Court.
The case involves the St. Joseph’s Hospital and Medical Center Plan, a noncontributory defined benefit pension plan (referred to as “the St. Joseph’s Plan” or “the Plan”).
The lawsuit alleges that St. Joseph’s denied the Plan’s participants and beneficiaries the protections of the Employee Retirement Income Security Act (“ERISA”) by improperly claiming that the Plan is a “church plan” exempt from ERISA. The lawsuit further alleges that St. Joseph’s, as the Plan sponsor, violated ERISA in a variety of ways, and, alternatively, that application of the church plan exemption to the St. Joseph’s Plan violates the Establishment Clause of the Constitution.
The initial St. Joseph’s case was filed in federal district court in New Jersey on May 13, 2016 (Case No. 2:16-cv-2740-JMV-JBC), against St. Joseph’s, members of various committees, and additional individuals who would be discovered to have fiduciary responsibilities with respect to the St. Joseph’s Plan (collectively, “Defendants”). Subsequently, a similar additional complaint was filed that also alleged that St. Joseph’s was improperly operating the Plan as a church plan in violation of ERISA. See Barker v. St. Joseph’s Healthcare System, Inc., 2:16-cv-02748-JLL-JAD (D.N.J.) On July 12, 2016, the Court consolidated the related cases and on March 29, 2017, Cohen Milstein and Keller Rohrback were appointed interim co-lead counsel.
On May 8, 2017, the Court stayed the case in order to permit the parties to engage in mediation and on June 8, 2017, the parties reached a compromise and filed a Joint Notice of Settlement. Judge Vazquez preliminarily approved the Settlement on October 5, 2017.
The Settlement Class
On October 5, 2017, the Settlement was preliminarily approved on behalf of the following Class:
All present and former participants (vested or nonvested) or beneficiaries of the Plan as of the
Effective Date of Settlement.
The Settlement resolves all claims against Defendants and applies to all past and present, vested and non-vested, participants in the Plan and their beneficiaries.
Benefits to the Settlement Class
The Settlement provides a cash contribution of $42.5 million (forty-two million, five hundred thousand dollars) to the Plan, as well as a corporate guarantee of accrued benefits under the Plan for a period of seven years, to settle the claims against Defendants. Defendants already have contributed $45 million to the Plan, fully satisfying the Settlement’s Plan contribution requirement, as well as voluntarily providing an additional contribution of $2.5 million. Because the Plan is a defined benefit pension plan and not a defined contribution plan with individual accounts, like a 403(b) plan or a 401(k) plan, the cash amount has been contributed to the Plan as a whole, rather than to individual Plan participants and beneficiaries. Your pension benefit will not increase as a result of the Settlement. Additionally, the Settlement provides significant non-monetary equitable consideration, in that current participants in the Plan will receive certain ERISA-like financial and administrative protections for the next seven years. The Effective Date of the Settlement is sixty (60) days after the Court enters its Final Order approving the Settlement and the time to appeal has expired.
Released Claims and Fairness Hearing
The Class Representatives and their attorneys believe that this Settlement is in the best interests of the Class members. As a result of the Settlement, the Class releases certain claims against Defendants pertaining to the Church Plan exemption. (These claims are defined in the Settlement Agreement).
The Court will hold a Fairness Hearing on March 6, 2018 at 11:00 a.m., at the U.S. District Court for the District of New Jersey and consider the fairness of the proposed Settlement. The Court will also hear any objections and arguments concerning the proposed Settlement’s fairness at that time. No benefits can be issued to Class members until after the Court grants final settlement approval.
Any member of the Settlement Class who wishes to object to the fairness, reasonableness, or adequacy of the Settlement, to any term of the Settlement Agreement, to the application for payment of attorneys’ fees and expenses, or to the application for incentive awards for Named Plaintiffs, may file an “Objection” in writing. If you wish to file an Objection, the written Objection and supporting papers must: (1) clearly identify the case name and number “Garbaccio v. St. Joseph’s Hospital and Medical Center and Subsidiaries, Case No. 2:16-cv-02740(JMV)(JBC)”; (2) be filed with the Court and postmarked and mailed to Class Counsel and Defendants’ Counsel at the addresses below on or before twenty-eight (28) days before the Fairness Hearing; (3) set forth your full name, current address, and telephone number; (4) set forth a statement of the position you wish to assert, including the factual and legal grounds for the position; (5) set forth the names and a summary of testimony of any witnesses that you might want to call in connection with the Objection; (6) provide copies of all documents that you wish to submit in support of your position; (7) provide the name(s), address(es) and phone number(s) of any attorney(s) representing you; (8) state the name, court, and docket number of any class action litigation in which you and/or your attorney(s) has previously appeared as an objector or provided legal assistance with respect to an objection; and (9) include your signature.
The addresses for filing Objections with the Court and service on counsel are listed below. Your written Objection must be filed with the Court, and mailed to the counsel listed below, postmarked (or sent via fax) by no later than February 6, 2018:
File with the Clerk of the Court:
Clerk of the Court
United States District Court
District of New Jersey
Martin Luther King Building
& U.S. Courthouse
50 Walnut Street
Newark, NJ 07101
COHEN MILSTEIN SELLERS & TOLL PLLC
1100 New York Avenue, N.W.
Washington, D.C. 20005
Fax: (202) 408-4699
Lynn Lincoln Sarko
KELLER ROHRBACK L.L.P.
1201 Third Avenue, Suite 3200
Seattle, WA 98101-3052
Fax: (206) 623-3384
KELLER ROHRBACK L.L.P.
3101 North Central Ave., Suite 1400
Phoenix, AZ 85012
Fax: (602) 248-2822
Stacey C.S. Cerrone
PROSKAUER ROSE LLP
650 Poydras Street, Suite 1800
New Orleans, LA 70130
Fax: (504) 310-2022
Q: How do I know whether I am part of the Settlement Class?
The Court has certified this case as a class action for settlement purposes only. You are a member of the Settlement Class if you are or were, on or before the date this Settlement becomes effective, a vested or non-vested participant in or beneficiary of the St. Joseph’s Healthcare System Pension Plan.
Q: How will the Settlement be distributed?
Because the Plan is a defined benefit pension plan, the $42.5 million has been contributed to the Plan as a whole, rather than distributed to individual Plan participants and beneficiaries. Your pension benefit will not increase as a result of the Settlement. The Settlement also provides significant non-monetary equitable consideration, in that current participants in the Plan will receive certain ERISA-like financial and administrative protections for the next seven years. You will remain entitled to the benefit you have accrued pursuant to the Plan’s terms.
Members of the Settlement Class do not need to do anything in order to obtain the benefits and protections provided by the Settlement in this case. Defendants were obligated to contribute an aggregate amount of $42.5 million to the Plan by no later than September 20, 2017. As of July 31, 2017, Defendants have contributed $45 million to the Plan, in satisfaction of their obligation under the Settlement terms. Additionally, at their sole discretion, Defendants may make additional contributions to the Plan at any time.
Q: What does the Settlement provide?
Under the proposed Settlement, Defendants agreed to contribute $42.5 million to the Plan and have already contributed $45 million, in full satisfaction of this settlement obligation. The Settlement therefore will improve the retirement security of all Plan participants and beneficiaries.
In addition, St. Joseph’s has agreed to provide other significant protections for the Plan that will remain in place for a period of seven years after the Settlement Agreement becomes final. First, if the assets in the Plan’s trust are ever insufficient to pay accrued benefits, St. Joseph’s guarantees that it will make sufficient contributions to the Plan trust to ensure all accrued benefits are paid. Second, any amendment or termination of the Plan cannot reduce participants’ accrued benefits. Third, if the Plan is merged with or into another plan in that time period, participants will be entitled to the same or greater benefits than they were before the merger.
The Settlement also includes equitable provisions which mimic certain provisions of ERISA concerning plan administration, summary plan descriptions, notices (annual summaries, pension benefits statements, current benefit values), and the Plan’s claim review procedure. These provisions also are in place for the next seven years.
The above description of the operation of the Settlement is only a summary. The governing provisions are set forth in the Settlement Agreement.
Q: What if I do nothing?
If you do nothing and you are a Class member, you will participate in the Settlement as described above in this Notice if the Settlement is approved.
Q: Can I exclude myself from the Settlement?
You do not have the right to exclude yourself from the Settlement. For settlement purposes, the Class was certified under Federal Rule of Civil Procedure 23(b)(1) and/or 23(b)(2) (non-opt-out class) because the Court determined the requirements of that rule were satisfied. Thus, it is not possible for any of the members of the Settlement Class to exclude themselves from the Settlement. As a member of the Settlement Class, you will be bound by any judgments or orders that are entered in the case for all claims that were or could have been asserted in the case against the Defendants or are otherwise included in the release under the Settlement.
Although members of the Settlement Class cannot opt out of the Settlement, they can object to the Settlement and ask the Court not to approve the Settlement.
Q: How will the lawyers be paid?
At the Fairness Hearing, Class Counsel will apply for an award of attorneys’ fees, expenses, and incentive awards of $10,000 to each of the Named Plaintiffs. Such application for attorneys’ fees, expenses, and incentive awards will not exceed $2,500,000; this amount will be paid entirely by Defendants. See Section 7.1.3 of the Settlement Agreement. The attorneys’ fees are separate from the $45 million contribution made already to the Plan. In other words, any payment of attorneys’ fees, expenses, and incentive awards to Named Plaintiffs will not reduce the contribution already paid to the Plan.
To date, Class Counsel have not received any payment for their services in prosecuting this case on behalf of the Settlement Class, nor have Class Counsel been reimbursed for their out-of-pocket expenses. The fees requested by Class Counsel would compensate Class Counsel for their efforts in achieving the Settlement for the benefit of the Settlement Class and for their risk in undertaking this representation on a contingency basis. The Court will determine the actual amount of the award.
If you are a Settlement Class member and you have questions regarding the Settlement, please contact Class Counsel at (800) 290-3132 or via .
Please do not contact the Court. Its personnel will not be able to answer your questions.
- Complaint – 05/13/2016
- Settlement Agreement – 07/20/2017
- Plantiffs Motion & Memo for Preliminary Approval of Settlement – 08/03/2017
- Handorf Declaration in Support of Motion for Preliminary Approval of Settlement – 08/03/2017
- Order Preliminarily Approving of Settlement – 10/05/2017
- Notice of Proposed Settlement – 11/03/2017
- Plaintiffs’ Motion & Memo for Final Approval of Settlement – 01/19/2018
- Plaintiffs’ Unopposed Motion for Attorneys’ Fees & Expenses & Incentive Awards to Named Plaintiffs – 01/19/2018