Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-15-15351/USCOURTS-ca9-15-15351-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

STARLA ROLLINS, on behalf of

herself, individually, and on

behalf of all others similarly

situated,

Plaintiff-Appellee,

v.

DIGNITY HEALTH, a California

non-profit corporation; HERBERT

J. VALLIER, an individual,

Defendants-Appellants.

No. 15-15351

D.C. No.

3:13-cv-01450-TEH

OPINION

Appeal from the United States District Court

for the Northern District of California

Thelton E. Henderson, Senior District Judge, Presiding

Argued and Submitted February 8, 2016

San Francisco, California

Filed July 26, 2016

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2 ROLLINS V. DIGNITY HEALTH

Before: A. Wallace Tashima and William A. Fletcher,

CircuitJudges andRobertW.Gettleman,

*SeniorDistrictJudge.

Opinion by Judge W. Fletcher

SUMMARY**

Employee Retirement Income Security Act

Affirming the district court’s partial summary judgment

in favor of the plaintiff, the panel held that Dignity Health’s

pension plan was subject to the requirements of the Employee

Retirement Income Security Act and did not qualify for

ERISA’s church-plan exemption.

Agreeing with other circuits, the panel held that a church

plan must be established by a church or by a convention or

association of churches and must be maintained either by a

church or by a church-controlled or church-affiliated

organization whose principal purpose or function is to

provide benefits to church employees. The panel remanded

the case to the district court for further proceedings.

* The Honorable Robert W. Gettleman, Senior District Judge for the

U.S. District Court for the Northern District of Illinois, sitting by

designation.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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ROLLINS V. DIGNITY HEALTH 3

COUNSEL

Lisa S. Blatt (argued), Elisabeth S. Theodore, and William C.

Perdue; Arnold & Porter LLP, Washington, D.C.; Barry S.

Landsberg, Harvey L. Rochman, and Joanna S. McCallum;

Manatt, Phelps & Phillips, LLP, Los Angeles, California;

David L. Shapiro, Cambridge, Massachusetts; Charles M.

Dyke, Nixon Peabody LLP, San Francisco, California; for

Defendants-Appellants.

Ron Kilgard (argued) and Laurie Ashton, Keller Rohrback

LLP, Phoenix, Arizona; Lynn L. Sarko, Havila C. Unrein, and

Matthew M. Gerend; Keller Rohrback LLP, Seattle,

Washington; Bruce Rinaldi, Karen L. Handorf, and Michelle

C. Yau; Cohen Milstein Sellers & Toll, PLLC, Washington,

D.C.; for Plaintiff-Appellee.

Shay Dvoretzky and Emily J. Kennedy, Jones Day,

Washington, D.C., for Amici Curiae Alliance Defending

Freedom and Thomas More Society.

David Cortman, Erik Stanley, and Jordan Lorence,

Washington, D.C., as and for Amicus Curiae Alliance

Defending Freedom.

Mark E. Chopko, Marissa Parker, and Brandon Riley,

Stradley Ronon Stevens & Young LLP, Washington, D.C.;

Lisa Gilden, The Catholic Health Association of the United

States, Washington, D.C.; James F. Sweeney and John M.

Cox; Sweeney, Greene & Roberts, LLP, Elk Grove,

California; for Amici Curiae The Catholic HealthAssociation

of the United States, and The Alliance of Catholic Health

Care.

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4 ROLLINS V. DIGNITY HEALTH

G. Daniel Miller, Conner &Winters, LLP, Washington, D.C.;

Laurence A. Hansen and Hugh S. Balsam, Locke Lord LLP,

Chicago, Illinois; for Amici Curiae Guidestone Financial

Resources of the Southern Baptist Convention, The Pension

Boards—United Church of Christ, Inc., and The Church

Alliance.

Michael Reiss and John A. Goldmark, David Wright

Tremaine LLP, Seattle, Washington;Howard Shapiro, Robert

Rachal, and Stacey Cerrone; Proskauer Rose LLP, New

Orleans, Louisiana; for Amicus Curiae Providence Health &

Services.

James A. Sonne, Stanford Law School Religious Liberty

Clinic, Stanford, California, for Amicus Curiae Becket Fund

for Religious Liberty.

Mary Ellen Signorille, AARP Foundation Litigation,

Washington, D.C., for Amicus Curiae AARP.

Andrew L. Seidel, Madison, Wisconsin, as and for Amicus

Curiae Freedom From Religion Foundation.

Daniel Mach, Washington, D.C., as an for Amicus Curiae

American Civil Liberties Union Foundation.

Elizabeth O. Gill, San Francisco, California, as and for

Amicus Curiae ACLU Foundation of Northern California,

Inc.

Richard B. Katskee and Gregory M. Lipper, Washington,

D.C., as and for Amicus Curiae Americans United for

Separation of Church and State.

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ROLLINS V. DIGNITY HEALTH 5

Ronald Dean, Law Office of Ronald Dean, Pacific Palisades,

California; Karen W. Ferguson, Pension Rights Center,

Washington, D.C.; Norman P. Stein, Philadelphia,

Pennsylvania; for Amicus Curiae Pension Rights Center.

OPINION

W. FLETCHER, Circuit Judge:

Plaintiff-Appellee Starla Rollins filed this putative class

action against her former employer, Defendant-Appellant

DignityHealth, its Chief Human Resources Officer, unnamed

members of its Retirement Subcommittee, and other unnamed

fiduciaries (collectively “Dignity Health”), alleging that

Dignity Health has not maintained its pension plan in

compliance with the Employee Retirement Income Security

Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. Dignity

Health concedes it has not complied with ERISA, but

contends its plan qualifies for ERISA’s church-plan

exemption. See id. §§ 1002(33), 1003(b)(2). The district

court held that a pension plan must have been established by

a church, or by a convention or association of churches, to

qualify as a church plan. Because the district court found that

Dignity Health’s pension plan was not established by a

church, or by a convention or association of churches, the

court awarded partial summary judgment to Rollins, ruling

that Dignity Health’s pension plan must comply with ERISA. 

We accepted jurisdiction in this interlocutory appeal to

address whether the district court was correct to hold that a

church plan must be established by a church or by a

convention or association of churches. We affirm the district

court’s answer to that question and remand for further

proceedings.

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6 ROLLINS V. DIGNITY HEALTH

I. Background

Because this appeal comes to us from the district court’s

award of summary judgment to Rollins, we relate the facts in

the light most favorable to Dignity Health. See Nolan v.

Heald Coll., 551 F.3d 1148, 1150 (9th Cir. 2009). In the

early 1980s, the Sisters of Mercy Congregations in Auburn,

California and Burlingame, California (the “Sponsoring

Congregations”) each established nonprofit hospital systems. 

In 1986, the Sponsoring Congregations merged the two

systems to form Catholic Healthcare West (“CHW”). 

Employees in the CHW system received pension benefits

through seven plans, separately maintained either by a

Sponsoring Congregation, by an individual hospital, or by

CHW. On January 1, 1989, the Sponsoring Congregations,

the hospitals, and CHW merged these plans into a single

pension plan (the “Plan”). On July 20, 1992, CHW’s board

of directors adopted a retroactive resolution to treat the Plan

as a church plan. CHW’s name was later changed to “Dignity

Health” as a result of corporate restructuring.

From 1986 to 2012, Plaintiff Starla Rollins worked as a

billing coordinator for San Bernardino Community Hospital,

which became affiliated with CHW and adopted the Plan in

August 1998. On November 20, 1998, Rollins was sent a

summary plan description, notifying her that CHW considers

the Plan to be a church plan and therefore exempt from

ERISA. Rollins became a participant in the Plan on January

1, 1999. She will be eligible for pension benefits from the

Plan when she reaches retirement age.

Rollins filed this putative class action against Dignity

Health, alleging that Dignity Health has violated numerous

ERISA requirements. The complaint alleges, first, that the

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ROLLINS V. DIGNITY HEALTH 7

Plan is not a church plan and, second, that ERISA’s churchplan exemption is unconstitutional. Rollins seeks declaratory

relief, money damages, statutory penalties, injunctive relief,

and attorney’s fees.

Dignity Health concedes that the Plan does not comply

with ERISA, but contends that the Plan need not do so

because it qualifies for the church-plan exemption under

29 U.S.C. § 1002(33)(C)(i) (for convenience, “subparagraph

(C)(i)”). Dignity Health contends that under subparagraph

(C)(i) a church plan need not have been established by a

church or by a convention or association of churches (for

convenience, “church”) if it is maintained by a churchcontrolled or church-affiliated organization whose

principal purpose or function is to provide benefits to

church employees (for convenience, “principal-purpose

organization”).

The district court granted partial summary judgment

against Dignity Health, holding that, to qualify for the

church-plan exemption under subparagraph (C)(i), a plan

must be established by a church and maintained either by a

church or by a principal-purpose organization. See Rollins v.

Dignity Health, 59 F. Supp. 3d 965 (N.D. Cal. 2014); see

Rollins v. Dignity Health, 19 F. Supp. 3d 909 (N.D. Cal.

2013). The district court did not reach the question whether

the church-plan exemption is constitutional.

The district court certified its order for interlocutory

appeal because the question whether a plan must have been

established by a church to qualify as a church plan under

§ 1002(33)(C)(i) is “a controlling question of law as to which

there is substantial ground for difference of opinion and

[because] an immediate appeal from the order maymaterially

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8 ROLLINS V. DIGNITY HEALTH

advance the ultimate termination of the litigation.” See

28 U.S.C. § 1292(b). We accepted jurisdiction. The district

court stayed proceedings pending appeal.

II. Standard of Review

We review de novo rulings on cross-motions for summary

judgment. Trunk v. City of San Diego, 629 F.3d 1099, 1105

(9th Cir. 2011). “Summary judgment is appropriate when,

with the evidence viewed in the light most favorable to the

non-moving party, there are no genuine issues of material

fact, so that the moving party is entitled to a judgment as a

matter of law.” Grenning v. Miller-Stout, 739 F.3d 1235,

1238 (9th Cir. 2014) (citation and internal quotation marks

omitted); Fed. R. Civ. P. 56(a).

III. Discussion

Congress enacted ERISA to protect “the interests of

participants in employee benefit plans and their beneficiaries

by setting out substantive regulatory requirements for

employee benefit plans and to provide for appropriate

remedies, sanctions, and ready access to the Federal courts.” 

Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004)

(citations and internal quotation marks omitted). ERISA does

not require employers to create benefit plans or require the

provision of specific benefits once a plan is created. 

However, ERISA does seek “to ensure that employees will

not be left empty-handed once employers have guaranteed

them certain benefits.” Lockheed Corp. v. Spink, 517 U.S.

882, 887 (1996). Church plans are exempt from ERISA’s

regulatory requirements unless the church waives the

exemption. 29 U.S.C. §§ 1003(b)(2), 1321(b)(3); see

26 U.S.C. § 410(d).

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ROLLINS V. DIGNITY HEALTH 9

For the reasons that follow, we agree with the district

court that, in order to qualify for the church-plan exemption

under subparagraph (C)(i), a plan must have been established

by a church and maintained either by a church or by a

principal-purpose organization.

A. Statutory Text

In interpreting a statute, “[w]e look first at the plain

language, examining not only the specific provision at issue,

but also the structure of the statute as a whole, including its

object and policy. If the statutory language is unambiguous,

our inquiry is at an end. If the language is ambiguous, then

we examine legislative history, and also look to similar

provisions within the statute as a whole and the language of

related or similar statutes to aid in interpretation.” Gladstone

v. U.S. Bancorp, 811 F.3d 1133, 1138 (9th Cir. 2016)

(citations and internal quotation marks omitted). Two

statutory provisions are directly relevant to this appeal.

First, church plans are exempt from otherwise applicable

requirements of ERISA: “The provisions of this subchapter

shall not apply to any employee benefit plan if . . . such plan

is a church plan (as defined in section 1002(33) of this

title)[.]” 29 U.S.C. § 1003(b)(2).

Second, a “church plan” is defined as follows:

(33)(A) The term “church plan” means a plan

established and maintained . . . by a church or

by a convention or association of churches[.]

. . .

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10 ROLLINS V. DIGNITY HEALTH

(C) For purposes of this paragraph—

(i) A plan established and maintained for

its employees (or their beneficiaries) by a

church or by a convention or association

of churches includes a plan maintained by

an organization . . . the principal purpose

or function of which is the administration

of funding of a plan or program for the

provision of retirement benefits or welfare

benefits, or both, for the employees of a

church or a convention or association of

churches, if such organization is

controlled by or associated with a church

or a convention or association of

churches.

29 U.S.C. § 1002(33) (emphasis added).

To make our discussion easier to follow, we describe the

essential structure of the foregoing provisions: Paragraph

1003(b)(2) provides that a church plan is exempt from

ERISA. Paragraph 1002(33)(A) provides that in order to

qualify for the church-plan exemption, a plan must be both

established and maintained by a church. Subparagraph (C)(i)

provides that a plan established and maintained by a church

“includes” a plan maintained by a principal-purpose

organization.

There are two possible readings of subparagraph (C)(i). 

First, the subparagraph can be read to mean that a plan need

only be maintained by a principal-purpose organization to

qualify for the church-plan exemption. Under this reading, a

plan maintained by a principal-purpose organization qualifies

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ROLLINS V. DIGNITY HEALTH 11

for the church-plan exemption even if it was established by an

organization other than a church. Second, the subparagraph

can be read to mean merely that maintenance by a principalpurpose organization is the equivalent, for purposes of the

exemption, of maintenance by a church. Under this reading,

the exemption continues to require that the plan be

established by a church.

We conclude that the more natural reading of

subparagraph (C)(i) is that the phrase preceded by the word

“includes” serves only to broaden the definition of

organizations that may maintain a church plan. The phrase

does not eliminate the requirement that a church plan must be

established by a church. The other circuit courts that have

considered the question agree with this reading. See Kaplan

v. Saint Peter’s Healthcare Sys., 810 F.3d 175, 180–81 (3d

Cir. 2015); Stapleton v. Advocate Health Care Network,

817 F.3d 517, 523–27 (7th Cir. 2016). The Third Circuit

provides the following helpful illustration: “[A]ny person

who is disabled and a veteran is entitled to free insurance. . . .

[A] person who is disabled and a veteran includes a person

who served in the National Guard.” Kaplan, 810 F.3d at 181. 

It is reasonably clear from context that a person who served

in the National Guard satisfies the requirement that he or she

be a veteran, but that this person qualifies for free insurance

only if he or she is also disabled. Similarly, in subparagraph

(C)(i), it is reasonably clear from context that a plan

maintained by a principal-purpose organization satisfies the

requirement that it be maintained by a church, but that the

plan qualifies as a church plan only if it was also established

by a church.

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12 ROLLINS V. DIGNITY HEALTH

B. Legislative History

Our reading is supported by legislative history. As

originally enacted in 1974, ERISA defined the term “church

plan” as follows:

(A) The term “church plan” means

(i) a plan established and maintained for

its employees by a church or by a

convention or association of churches

which is exempt from tax under section

501 of the Internal Revenue Code of 1954,

or

(ii) a plan described in subparagraph (C).

. . . .

(C) . . . [A] plan in existence on January 1,

1974, shall be treated as a “church plan” if it

is established and maintained by a church or

convention or association of churches for its

employees and employees of one or more

agencies of such church (or convention or

association) . . . , and if such church (or

convention or association) and each such

agency is exempt from tax under section 501

of the Internal Revenue Code of 1954. The

first sentence of this subparagraph shall not

apply to any plan maintained for employees of

an agency with respect to which the plan was

not maintained on January 1, 1974. The first

sentence to this subparagraph shall not apply

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ROLLINS V. DIGNITY HEALTH 13

with respect to any plan for any plan year

beginning after December 31, 1982.

29 U.S.C. § 1002(33)(A), (C) (1976). The parties’ dispute

would have been easily resolved under ERISA’s originally

enacted text, which unambiguously provided that a church

plan must have been established by a church. But this text

was amended in the Multiemployer Pension Plan

Amendments Act of 1980 (“MPPAA”), to provide the current

text of § 1002(33)(C)(i)–(iii).

Dignity Health contends that the current subparagraph

(C)(i) eliminated the requirement that a plan be established by

a church if a plan is maintained by a principal-purpose

organization. As the “party contending that legislative action

changed settled law,” Dignity Health has the “burden of

showing that the legislature intended such a change.” Green

v. Bock Laundry Mach. Co., 490 U.S. 504, 521–22 (1989).

Dignity Health argues that subparagraph (C)(ii) supports

its interpretation of subparagraph (C)(i). This subparagraph

provides in relevant part:

(ii) The term employee of a church or a

convention or association of churches

includes —

(I) a duly ordained, commissioned, or

licensed minister of a church in the

exercise of his ministry, regardless of the

source of his compensation;

(II) an employee of an organization,

whether a civil law corporation or

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14 ROLLINS V. DIGNITY HEALTH

otherwise, which is exempt from tax

under section 501 of Title 26 and which is

controlled by or associated with a church

or a convention or association of

churches; and

(III) an individual described in clause (v).

Dignity Health contends that this subparagraph shows that

Congress intended in subparagraph (C)(i) to eliminate the

requirement that a plan be established by a church whenever

a plan is administered by a principal-purpose organization. 

In particular, Dignity Health argues in its brief that, “If a

church plan may cover employees of a church-associated

organization, and a church-associated organization may

maintain the plan, Congress had no reason to insist that the

church itself must establish the plan.” (Internal quotation

marks omitted.) This argument is based on a misreading of

the legislative history.

Congress’ reason for enacting subparagraph (C)(ii) is

clear from the legislative record. Before ERISA was enacted,

many churches had allowed employees of church-associated

organizations, such as hospitals and schools, to participate in

the churches’ pension plans. As originally enacted, ERISA

allowed plans covering the employees of such organizations

to qualify as church plans only until December 31, 1982. 

After that date, plans including employees of such

organizations would either have had to comply with ERISA

or divide into separate plans. Separation would have imposed

significant hardships, including increased plan maintenance

costs and limitations on the free movement of employees

between a church and its associated organizations. See

125 Cong. Rec. 10,052 (May 7, 1979) (statement of Sen.

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ROLLINS V. DIGNITY HEALTH 15

Talmadge). In response to this concern, Congress eliminated

the sunset provision of former paragraph (C) and added

subparagraph (C)(ii) to expand the definition of employees

who were eligible to participate in a church plan. After the

adoption of subparagraph (C)(ii), employees of churchassociated organizations became eligible to participate.

Congress’ reason for enacting subparagraph (C)(i) was

different. Subsection 1002(C), as it existed until 1980,

required that a church plan be maintained by a church. In

codifying this requirement, Congress inadvertently excluded

plans maintained (i.e., administered) by church-controlled or

church-affiliated pension boards rather than by churches

themselves. See, e.g., 125 Cong. Rec. 10,053 (May 7, 1979)

(statement of Sen. Talmadge). Congress relaxed this

requirement by adding the language in subparagraph (C)(i)

that specifies that a plan maintained by a church-controlled or

church-affiliated principal-purpose organization, such as a

pension board, qualifies as a plan maintained by a church. 

The legislative history is clear that subparagraph (C)(i)

addressed only the problem of maintenance by churchcontrolled or church-affiliated pension boards. See, e.g.,

125 Cong. Rec. 10,052 (May 7, 1979) (statement of Sen.

Talmadge) (“Our legislation[] retains the definition of church

plan as a plan established and maintained for its employees

by a church or by a convention or association of church[es]

exempt from tax under section 501.”); id. at 10,053 (“No

church plan administered or funded by a pension board

would be disqualified merely because it is separately

incorporated.”); 126 Cong. Rec. 20,245 (July 29, 1980)

(“[Mr. Talmadge:] May I ask whether the bill would enable

a church pension board to maintain a church plan? [Mr.

Long:] Yes.”); Sen. Labor & Hum. Resources Com. Rep. on

H.R. 3904 (Aug. 15, 1980) (noting that the former definition

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16 ROLLINS V. DIGNITY HEALTH

of a church plan “would be continued” and only “clarified to

include plans maintained by a pension board maintained by

a church”); Sen. Com. on Fin., Exec. Sess., at 40 (June 12,

1980) (“The definition [of a church plan] would also be

expanded to include church plans which rather than being

maintained directly by a church are instead maintained by a

pension board maintained by a church.”).

Thus, subparagraph (C)(ii), on the one hand, and

subparagraph (C)(i), on the other, addressed two quite

different problems. There is nothing in the legislative history

of subparagraph (C)(ii) to suggest that Congress intended, in

expanding the definition of eligible employees, to eliminate

the requirement that a church plan be established by a

church. Nor is there anything in the legislative history of

subparagraph (C)(i) to suggest that Congress intended, in

broadening the definition of organizations that are authorized

to maintain a church plan, to eliminate that same requirement.

C. Related Statutes

Dignity Health maintains that language in three federal

statutes enacted after MPPAA supports its reading of

subparagraph (C)(i). As defined in these three statutes, the

terms “church plan” and “[r]etirement income account[]

provided by [a] church[]” do not require that a plan or

account be established by a church. Dignity Health contends

that we must presume that Congress intended the term

“church plan” in ERISA to have the same meaning as in these

statutes. See Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246,

254 (1994). We disagree.

First, Dignity Health cites a statute, enacted in 2004,

providing:

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ROLLINS V. DIGNITY HEALTH 17

For purposes of sections 401(a) and 403(b) of

the Internal Revenue Code of 1986, any

retirement plan maintained by the YMCA

Retirement Fund as of January 1, 2003, shall

be treated as a church plan (within the

meaning of section 414(e) of such Code)

which is maintained by an organization

described in section 414(e)(3)(A) of such

Code.

Pub. L. No. 108-476, 118 Stat. 3901 (2004) (emphasis

added). Section 414(e)(3)(A) of the Internal Revenue Code

is identical in all relevant respects to 29 U.S.C.

§ 1002(33)(C)(i). Thus, the statute above provides that a plan

maintained by the YMCA Retirement Fund shall be “treated

as” a church plan maintained by a principal-purpose

organization, regardless of what entity established the plan. 

Pointing to this statute, Dignity Health suggests that a church

plan need not be established by a church, as long as it is

maintained by the appropriate type of organization. The

statute above, however, does not indicate a congressional

intent to interpret or redefine the meaning of the term “church

plan” in other federal statutes. Instead, the statute specifies

that plans maintained by the YMCA Retirement Fund will be

“treated as” church plans, even though they are not, in fact,

church plans.

Second, Dignity Health cites two investment statutes —

the Tax Equity and Fiscal Responsibility Act of 1982 and the

Church Plan Investment Clarification Act of 2012. These

statutes define the term “[r]etirement income account[]

provided by [a] church[]” as a plan that is established or

maintained by a church, and for purposes of those provisions

only, a church-controlled or church-affiliated principal-

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18 ROLLINS V. DIGNITY HEALTH

purpose organization qualifies as a “church.” See 26 U.S.C.

§ 403(b)(9)(B); 15 U.S.C. § 77c(a)(2) (referring to accounts

“described in section 403(b)(9) of Title 26”). Thus, to qualify

as a “[r]etirement income account[] provided by [a] church[]”

under these statutes, a plan need not have been established by

a church. Dignity Health contends that it would be

“anomalous” if the term “church plan” in ERISA had a

different meaning from the term “[r]etirement income

account[] provided by [a] church[]” in these statutes.

This argument is of little help to Dignity Health, as it

proves too much. Construing the term “church plan” in

ERISA to have the same meaning as “[r]etirement income

account[] provided by [a] church” in these tax and securities

laws would contradict Dignity Health’s own construction of

ERISA. Dignity Health concedes that, to qualify as a church

plan under 29 U.S.C. § 1002(33)(A), a plan maintained by a

church (rather than a principal-purpose organization) must

also have been established by a church. Yet under the two

statutes just described, an account qualifies as a “[r]etirement

income account[] provided by [a] church” if it is maintained

by a church, regardless of what entity established the account.

Further, we do not construe terms to have the same

meaning when Congress expressly defines the terms

differently. See Loughrin v. United States, — U.S. —, 134 S.

Ct. 2384, 2390 (2014). ERISA defines the term “church

plan” as a plan that is established and maintained by a church. 

The two statutes that Dignity Health cites define the term

“[r]etirement income account[] provided by [a] church[]” as

a plan that is established or maintained by a church or a

church-controlled or church-affiliated principal-purpose

organization. We presume Congress intended these disparate

definitions to signify a difference in meaning. Indeed, these

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ROLLINS V. DIGNITY HEALTH 19

differences mirror differences in definitions contained in

29 U.S.C. § 1002 itself. Compare § 1002(32) (defining the

term “governmental plan” as a plan “established or

maintained” by the government of any state, political

subdivision of a state, or agency or instrumentality of a state

or subdivision) with § 1002(33) (defining the term “church

plan” as a plan “established and maintained” by a church (or

a convention or association of churches)).

D. Agency Interpretations

Dignity Health contends we must defer to the view

expressed by the Internal Revenue Service that a plan

qualifies as a church plan if it is maintained by a principalpurpose organization. We disagree.

An agency’s interpretation of a federal statute is entitled

to deference under Chevron U.S.A., Inc. v. Natural Resources

Defense Council, Inc., 467 U.S. 837 (1984), “when it appears

that Congress delegated authority to the agency generally to

make rules carrying the force of law, and that the agency

interpretation claiming deference was promulgated in the

exercise of that authority.” United States v. Mead Corp.,

533 U.S. 218, 226–27 (2001). Otherwise, it is entitled to

deference proportional only to its “power to persuade.” 

Christensen v. Harris Cnty., 529 U.S. 576, 587–88 (2000)

(quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)).

Dignity Health maintains we should defer to a 1983

General Counsel Memorandum (“GCM”) from the Internal

Revenue Service (“IRS”). See I.R.S. Gen. Couns. Mem.

39,007, 1983 WL 197946 (July 1, 1983). The GCM

addressed “[w]hether a retirement plan covering the lay

employees of a religious order whose main activity is the

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20 ROLLINS V. DIGNITY HEALTH

operation of nursing homes or hospitals can be a ‘church

plan’ within the meaning of [the Internal Revenue Code

§ 414(e)].” 1983 WL 197946 at *1. The agency first

determined that the retirement plans in question had not been

established by a church, as required by 26 U.S.C.

§ 414(e)(2)(A), because the religious orders were not

“churches” within the meaning of the Internal Revenue Code. 

Id. at *5. However, the agency opined that the plans could

qualify as church plans if they were “maintained either by the

Catholic Church, which [qualifies] as a church, or by an

organization described in section 414(e)(3)(A)” — that is, by

a church-affiliated principal-purpose organization. Id.

GCMs “are legal memoranda from the Office of Chief

Counsel to the IRS prepared in response to a formal request

for legal advice from the Assistant Commissioner.” Tupper

v. United States, 134 F.3d 444, 448 (1st Cir. 1998). Like

many GCMs, the GCM on which Dignity Health relies

includes a disclaimer that it is “not to be relied upon or

otherwise cited as precedent by taxpayers.” 1983 WL

197946, at *6. We therefore give only Skidmore deference to

the GCM.

The GCM’s interpretation is unpersuasive. It is based on

an obvious misreading of the statutory text, and it ignores the

relevant legislative history. In the GCM, the agency opined

that a plan may qualify as a church plan if it is maintained by

the Catholic Church, regardless of what entity established the

plan. That conclusion is based on a clear misreading of the

text. As Dignity Health itself concedes, a plan maintained by

a church must also be established by a church to qualify as a

church plan. See 29 U.S.C. § 1002(33)(A). Further, the

GCM does not analyze the legislative history indicating that,

in adopting subparagraph (C)(i), Congress did not intend to

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ROLLINS V. DIGNITY HEALTH 21

alter ERISA’s requirement that a church plan must have been

established by a church. We therefore agree with the Third

and Seventh Circuits that the GCM is not entitled to

deference. See Kaplan, 810 F.3d at 185; Stapleton, 817 F.3d

at 530.

Several other administrative actions and regulations have

relied upon and adopted the 1983 GCM’s reading of the

statute, without altering or expanding upon its analysis. See

I.R.S. Priv. Ltr. Rul. 200023057, 2000 WL 1998090 (Mar.

20, 2000); I.R.S. Priv. Ltr. Rul. 9717039, 1997 WL 200940

(Jan. 31, 1997); I.R.S. Priv. Ltr. Rul. 9525061, 1995 WL

372553 (Mar. 28, 1995); I.R.S. Priv. Ltr. Rul. 9409042, 1993

WL 596409 (Dec. 8, 1993); Op. Ltr. of Pension & Welf.

Benefits Admin., 2000 WL33146430 (2000); Dep’t of Labor,

Advisory Op. No. 96-19A, 1996 WL 556109 (Sept. 30,

1996); Pens. Benefit Guar. Corp., Questions to the PBGC and

Summary of Their Responses 25 (Mar. 2011). For the reasons

above, these actions and regulations are also not entitled to

deference.

Dignity Health also contends that Congress has

acquiesced in the IRS’s interpretation of the church-plan

exemption. But “[c]ongressional acquiescence can only be

inferred when there is overwhelming evidence that Congress

explicitly considered the precise issue presented to the court.”

Morales-Izquierdo v. Gonzales, 486 F.3d 484, 493 (9th Cir.

2007) (citations and internal quotation marks omitted). There

is no evidence, let alone “overwhelming evidence,” that

Congress gave such consideration to this precise issue in a

later-enacted statute.

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22 ROLLINS V. DIGNITY HEALTH

E. Constitutional Avoidance

Dignity Health contends our reading conflicts with the

Religion Clauses of the First Amendment and asks us to

construe the statute to avoid these conflicts. See AlmendarezTorres v. United States, 523 U.S. 224, 237 (1998). We

conclude that there are no such conflicts.

Dignity Health argues that our reading conflicts with the

Establishment Clause in three respects.

First, Dignity Health suggests that our reading of

subparagraph (C)(i) discriminates against certain religious

organizations by exempting plans established by churches,

but not those established by other religious organizations. 

Dignity Health contends that § 1002(33) should be read to

authorize all religious groups, however organized, to establish

church plans. Subparagraph (C)(i) cannot plausibly be

construed as Dignity Health suggests. Subparagraph (C)(i)

does not refer generally to just any sort of religious

organization; it refers specifically to church-controlled or

church-affiliated principal-purpose organizations, such as

pension boards. Thus, DignityHealth’s argument can only be

understood as an outright constitutional challenge to the

church-plan exemption itself — a challenge Dignity Health

surely does not intend to advance.

Such a challenge, moreover, would be baseless. For the

proposition that the distinction between churches and other

religious groups is constitutionally suspect, Dignity Health

cites our decision in Spencer v. World Vision, Inc., 633 F.3d

723 (9th Cir. 2011) (per curiam). Spencer held that a

religious employer qualified for Title VII’s “religious

corporation” exemption, even though it was not a church. Id.

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ROLLINS V. DIGNITY HEALTH 23

at 724. The panel majority in Spencer reached that

conclusion based in part on a desire to avoid constitutional

doubts about providing a statutory exemption to churches but

not other religious groups. Id. at 728–29 (O’Scannlain, J.,

concurring, joined by Kleinfeld, J.). To express doubts about

a constitutional issue is not to decide that issue. Cf. Barapind

v. Enomoto, 400 F.3d 744, 750–51 (9th Cir. 2005) (en banc)

(holding that an issue decided by a panel majority constitutes

a holding of the circuit). Indeed, one of the primary

justifications for the constitutional avoidance doctrine is to

avoid unnecessary constitutional decisions. See Rust v.

Sullivan, 500 U.S. 173, 190–91 (1991).

We do not share the doubts expressed in Spencer. 

Numerous federal statutes have long drawn the distinction

between churches and other religious organizations. See, e.g.,

26 U.S.C. § 170(b)(1)(A)(ii) (allowing deductions for

charitable contributions to churches); id. § 514(b)(3)(E)

(providing special rules for debt-financed properties

belonging to a church) ; id. § 6033(a)(3)(A)(i) (requiring taxexempt organizations, other than churches, to file Form 990

tax returns); id. § 7611 (providing churches with enhanced

protection from IRS audits). We agree with our sister circuits

that these statutes are constitutional because they distinguish

between churches and other religious organizations based on

“neutral, objective organizational criteria.” Little Sisters of

the Poor Home for the Aged v. Burwell, 794 F.3d 1151,

1199–1201 (10th Cir. 2015), vacated on other grounds, Zubik

v. Burwell, 136 S. Ct. 1557 (2016); see Priests for Life v. U.S.

Dep’t of Health & Human Servs., 772 F.3d 229, 272 (D.C.

Cir. 2014), vacated on other grounds, Zubik, 136 S. Ct. 1557;

Geneva Coll. v. Sec’y U.S. Dep’t of Health & Human Servs.,

778 F.3d 422, 443 (3d Cir. 2015), vacated on other grounds,

Zubik, 136 S. Ct. 1557; Univ. of Notre Dame v. Sebelius,

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24 ROLLINS V. DIGNITY HEALTH

743 F.3d 547, 560 (7th Cir. 2014), vacated on other grounds,

135 S. Ct. 1528 (2015) (mem.).

Second, Dignity Health contends that our reading, by

distinguishing between religious institutions based on

organizational form, will inevitably lead to invidious

discrimination based on denomination and religious belief. 

Dignity Health provides no support for this assertion other

than citations to Larson v. Valente, 456 U.S. 228 (1982),

Colorado Christian University v. Weaver, 534 F.3d 1245,

1258 (10th Cir. 2008), and University of Great Falls v. NLRB,

278 F.3d 1335, 1342 (D.C. Cir. 2002). None of these cases

supports Dignity Health’s argument. Each was directly

“concerned with lines drawn based on denomination, rather

than organizational form or purpose.” Priests for Life,

772 F.3d at 273; see Larson, 456 U.S. at 246–48; Colo.

Christian Univ., 534 F.3d at 1258; Univ. of Great Falls, 278

F.3d at 1343.

Third, Dignity Health contends that our reading would

entangle the government in religious matters by requiring it

to determine whether religious organizations qualify as

churches. But avoidance of this constitutional question

would not lead to Dignity Health’s construction of the

church-plan exemption. To qualify as a church plan under

subparagraph (C)(i), a plan must be maintained by a

principal-purpose organization that is controlled by or

associated with a church. And to qualify as an employee of

a church under subparagraph (C)(ii)(II), an individual must be

an employee of a tax-exempt organization that is controlled

by or associated with a church. Even on Dignity Health’s

construction, agencies and courts must distinguish between

churches and other religious organizations. See Kaplan, 817

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ROLLINS V. DIGNITY HEALTH 25

F.3d at 531. Thus, Dignity Health’s argument again becomes

an outright challenge to the church-plan exemption itself.

That challenge fails. Dignity Health suggests that the

determination whether an organization qualifies as a church

requires a forbidden inquiry into matters of religious doctrine. 

See, e.g., NLRB v. Catholic Bishop of Chi., 440 U.S. 490, 502

(1979); Mitchell v. Helms, 530 U.S. 793, 826–28 (2000)

(plurality opinion); New York v. Cathedral Acad., 434 U.S.

125, 133 (1977); Corp. of Presiding Bishop of Church of

Jesus Christ of Latter-Day Saints v. Amos, 483 U.S. 327, 336

(1987). But such a determination does not require this sort of

inquiry, and it is not the inquiry that courts or agencies

actually employ. See Found. for Human Understanding v.

United States, 614 F.3d 1383 (Fed. Cir. 2010); Am. Guidance

Found., Inc. v. United States, 490 F. Supp. 304 (D.D.C.

1980).

Finally, Dignity Health contends our reading interferes

with internal matters of church governance in violation of

both the Establishment and Free Exercise Clauses. See

Hosanna-Tabor Evangelical Lutheran Church & Sch. v.

EEOC, 565 U.S. —, 132 S. Ct. 694, 706–07 (2012). For the

reasons already given, there is no Establishment Clause

violation. There is also no Free Exercise violation, for even

assuming that a church’s choice of organizational form is an

“internal church decision that affects the faith and mission of

the church,” the church-plan exemption does not interfere

with this choice. Id. at 707. Religious groups are free to

operate their agencies under the same organizational structure

as their churches; they are also free to allow their agencies to

operate separately. Under either organizational form,

churches may allow their agencies’ employees to participate

in their pension plans.

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26 ROLLINS V. DIGNITY HEALTH

F. Additional Issues

In addition to the question the district court certified for

interlocutory appeal, Dignity Health urges us to review the

district court’s rulings that Rollins’s lawsuit was timely, that

the Plan was not established by a church, and that the Plan is

not maintained by a principal-purpose organization. We have

discretion to review any issue “fairly included” within the

certified order, Deutsche Bank Nat’l Trust Co. v. FDIC,

744 F.3d 1124, 1134 (9th Cir. 2014) (internal quotation

omitted), but we conclude that interlocutory consideration of

these issues is unwarranted.

Conclusion

For the foregoing reasons, we affirm the district court’s

partial summary judgment and remand for further

proceedings.

AFFIRMED and REMANDED.

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