Madison - St. Clair Record

Tuesday, September 17, 2019

Yandle grants dismissal of state law claims in retirement benefits dispute

By Dee Thompson | Dec 12, 2017

EAST ST. LOUIS - District judge Staci Yandle granted OSF Healthcare's motion to dismiss state law claims in a class action over retirement benefits. 

On Dec. 5, Yandle dismissed counts X-XIV of the fourth amended complaint without prejudice. 

Yandle wrote that the state law claims "are poisonous to federal subject-matter jurisdiction. Plaintiffs can either proceed on their state law claims or they can be in federal court, but not both,”

“There is no point in continuing to litigate these claims in this Court because they are going to be dismissed sooner or later," she continued. "The Court will therefore exercise its discretion and dismiss them without prejudice now for lack of subject matter jurisdiction. Accordingly, Defendants’ motion to dismiss Plaintiffs’ state law claims is granted. Counts X-XIV of the Fourth Amended Complaint are hereby dismissed without prejudice.” 

Sheilar Smith filed the class action against OSF Healthcare System in April 2016, alleging the employer failed to fund their ERISA plan, or Employee Retirement Income Security Act. 

OSF is an Illinois 501(c)(3) non-profit corporation that operates 11 acute care hospitals, home health care services and other health care facilities in Illinois and Michigan.

OSF provides employees with two defined benefits plans. In order to cover its own direct employees, the employer offers the St. Francis Plan. In order to cover employees of the St. Anthony's Health Center, which was recently purchased, OSF offers the St. Anthony's Plan. 

Yandle explains that the OSF Retirement Committee for the retirement plan for employee's of St. Anthony's Health Center is the administrator of the St. Anthony's Plan, and Sisters of the Third Order of St. Francis Employee Pension Plan Administrative Committee is the administrator of the St. Francis Plan. 

The class action alleges OSF and the related entities treated the benefits plans as though they were exempt from ERISA requirements, resulting OSF's failure to "adequately fund the Plans’ trust accounts to the level required under ERISA to cover all accrued benefits, that the defendants failed to follow certain notice, disclosure and managerial requirements, and that the defendants had breached their duties as fiduciaries,”

Some original issues in the lawsuit were resolved after the U.S. Supreme Court issued its opinion in Advocate Health Care Network v Stapleton. However, the plaintiffs filed amended complaints, still alleging failure to fund the ERISA plans. 

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U.S. District Court for the Southern District of Illinois