St. Anthony Medical Center Settlement
Welcome to the Owens v. St. Anthony Medical Center, Inc. Settlement website. This website is intended to keep Settlement Class Members informed regarding the Class Action Settlement Agreement (“Settlement Agreement”). The content of this website is the responsibility of Class Counsel and has not been approved by the Court.
On August 14, 2019, the Honorable Sharon Johnson Coleman granted final approval of the Settlement Agreement.
On June 2, 2014, Plaintiffs Lenore Owens, Jean Jewett, Lori Buksar, and Julia Snyder (collectively, “Plaintiffs”) filed a putative class action Complaint, on behalf of themselves and all persons similarly situated, in the United States District Court for the Northern District of Illinois against St. Anthony Medical Center (“SAMC”) and various other Defendants, alleging violations of ERISA. The Complaint alleged that Defendants denied the participants and beneficiaries of the St. Anthony Medical Center Retirement Plan (“Plan”) the protections of ERISA by claiming the Plan qualified as an ERISA exempt “church plan.” The Complaint alleged that the Plan is not a “church plan” because neither SAMC nor Franciscan Sisters of Chicago Service Corporation (“FSCSC”) is a church or a convention or association of churches, and because the Plan was not established by a church or by a convention or association of churches. The Complaint further alleged that the Defendants breached their duties under ERISA by, among other things: underfunding the Plan by over $32 million; failing to furnish Plaintiffs or any member of the class with ERISA-required disclosures; violating ERISA’s anti-cutback provisions; failing to obtain insurance for the Plan from the Pension Benefit Guaranty Corporation; and failing to properly terminate the Plan in accordance with ERISA. The Complaint alleged that, following the termination of the Plan in 2012, Plan participants received pension benefits which were substantially less than the actuarial equivalent of the pension benefits which they had been promised and had accrued under the Plan. Defendants deny and continue to deny all claims asserted by Plaintiffs. The Complaint further alleged that operation of the Plan as a church plan is a violation of the Establishment Clause of the U.S. Constitution. Defendants maintain that the Plan qualified as a church plan under ERISA, and that the Plan was operated, funded, and terminated in accordance with the Plan’s governing documents and applicable laws. Defendants deny that they have engaged in any wrongdoing whatsoever.
A similar case concerning the church plan exemption was heard by the United States Supreme Court in 2017. Advocate Health Care Network v. Stapleton, 137 S. Ct. 1652 (2017). In that case the Supreme Court ruled against the plan participants, holding that a church plan did not need to be established by a church. This ruling was issued while this case was pending and eliminated one of Plaintiffs’ arguments that the Plan was not a church plan. Following that ruling, on December 4, 2017, Plaintiffs filed their Third Amended Class Action Complaint, which includes alternative state law claims. Defendants denied that Plaintiffs had any valid state law claims.
The Parties negotiated to resolve the Action over the course of several years. The Parties first met in September 2016 with a mediator to attempt to resolve the Action, but negotiations were unsuccessful. The Parties resumed negotiations via telephone and with the assistance of a mediator in August 2018. The negotiations continued through November 2018. On November 27, 2018, the Parties filed a notice of Settlement to inform the Court that they had reached an agreement. The Settlement Agreement is the product of those arm’s-length negotiations between Class Counsel and Defendants’ counsel, which occurred over many months and were overseen and assisted by an experienced third-party mediator.
The Settlement Class
On August 14, 2019, final approval of the Settlement Agreement was granted on behalf of the following Settlement Class:
All Plan participants or Plan beneficiaries who received or were issued a reduced benefit distribution from the Plan in 2012, after the Plan’s termination on March 31, 2012. Excluded from the class are the Individual Defendants named in the Complaint.
The Settlement Class was certified as a non-opt out class action for settlement purposes only, pursuant to Federal Rules of Civil Procedure 23 (b)(1) and/or (b)(2).
Q: What does the Settlement Agreement provide?
Defendants are required to deposit four million dollars ($4,000,000.00) in cash to an escrow account. One million dollars of the $4 million will be used to settle Plaintiffs’ court-approved attorneys’ fees and expense reimbursement, and incentive awards to Named Plaintiffs. The remaining $3 million will be allocated and paid to the Settlement Class proportionally based on the amount that each Plan participant’s benefit was reduced in 2012.
The above description of the operation of the Settlement Agreement is only a summary. The governing provisions are set forth in the Settlement Agreement.
Q: What rights am I giving up in the Settlement?
The Order and Final Judgment fully, finally, and forever releases, relinquishes, and discharges any and all actual or potential claims, actions, causes of action, demands, obligations, liabilities, attorneys’ fees, expenses and costs arising out of the allegations of the Complaint in connection with the sponsorship, funding, maintenance, operation or termination of, or distributions from, the Plan, including any claims that were brought or could have been brought under federal law or state law as of the date of the Settlement Agreement by any member of the Settlement Class, including any current or prospective challenge to the “church plan” status of the Plan.
Released Claims do not include any claims which may arise out of the Settlement Agreement itself or the final distribution benefit to be distributed on a pro rata basis.
Q: How do I know whether I am part of the Settlement?
The Court has certified the Action as a class action for settlement purposes only. You are a member of the Settlement Class if you are a Plan participant or beneficiary who received or was issued a reduced benefit distribution from the Plan in 2012, after the Plan’s termination. Excluded from the Settlement are the Individual Defendants named in the Complaint.
Q: How will the lawyers be paid?
Court-appointed Class Counsel applied for an award of attorneys’ fees and expense reimbursement, and incentive awards for each Named Plaintiff. The Court approved that motion at the Fairness Hearing on August 14, 2019.
If you are a Settlement Class Member and you have questions regarding the Settlement, please contact Class Counsel at (888) 347-4600.