Opinion ID: 4520220
Heading Depth: 2
Heading Rank: 2

Heading: Church-Plan Status

Text: That does not, however, conclude our analysis. Mercy briefed this case on both 12(b)(1) and 12(b)(6) grounds. “[A]n appellate court may treat a Rule 12(b)(1) issue as a Rule 12(b)(6) issue.” ABF Freight Sys., Inc. v. Int’l Bhd. of Teamsters, 645 F.3d 954, 965 (8th Cir. 2011). To that end, we consider whether Sanzone has adequately pleaded that the Plan is not a church plan. In reviewing the merits, we “accept[] the well-pleaded allegations in the complaint as true and draw[] all reasonable inferences in favor of the plaintiff.” Varga v. U.S. Bank Nat’l Ass’n, 764 F.3d 833, 838 (8th Cir. 2014). “In addition to the allegations in the amended complaint, we also may consider materials that are necessarily embraced by the pleadings.” Id. (internal quotation omitted). Sanzone argues that she is entitled to remand for two reasons. First, she argues that the district court erred in finding that the Plan was a church plan because it incorrectly interpreted the principal-purpose provision. Second, she argues that she is entitled to further discovery. We consider both arguments in turn.
As discussed above, ERISA exempts church plans from its requirements. See 29 U.S.C. § 1003(b)(2); see also id. § 1002(33). A church plan includes one that is maintained by a principal-purpose organization. Id. § 1002(33)(C)(i). And a principal-purpose organization is an organization that has the primary purpose or function of administering or funding a plan for the employees of a church, and it must be “controlled by or associated with a church.” Id. -10- Because Sanzone does not contest that the Committee’s primary purpose is administering the Plan and that it is associated with the Catholic church, the parties’ arguments focus on whether the Committee (a) maintains the Plan and (b) constitutes an organization. Those arguments turn on the definitions of maintain and organization in ERISA. Sanzone argues that ERISA creates a context-specific definition of maintain. Under that definition, the Committee does not maintain the Plan. Mercy urges us to use the plain meaning of maintain, under which, it argues, the Committee maintains the Plan. The parties assert the same arguments for the term organization. Though the Supreme Court considered the principal-purpose provision in Advocate, it expressly left unanswered the question of whether hospitals’ internal benefits committees constitute principal-purpose organizations. 137 S. Ct. at 1657 n.2. “As usual, our job is to interpret the words consistent with their ‘ordinary meaning . . . at the time Congress enacted the statute.’” Wis. Cent. Ltd. v. United States, 138 S. Ct. 2067, 2070 (2018) (alteration in original) (quoting Perrin v. United States, 444 U.S. 37, 42 (1979)). Yet “[i]nterpretation of a word or phrase depends upon reading the whole statutory text, considering the purpose and context of the statute, and consulting any precedents or authorities that inform the analysis.” Dolan v. U.S. Postal Serv., 546 U.S. 481, 486 (2006). So we depart from the ordinary meaning only if the words “are otherwise defined in the statute itself,” Hennepin Cty. v. Fed. Nat’l Mortg. Ass’n, 742 F.3d 818, 821 (8th Cir. 2014), or if “context requires a different result.” Gonzales v. Carhart, 550 U.S. 124, 152 (2007).
We begin our ordinary meaning inquiry with the simple dictionary definition from the time of the statute’s enactment. See, e.g., Wis. Cent., 138 S. Ct. at 2070–71 (using dictionaries from 1942 and 1933 to interpret “money” in an act adopted in 1937). The relevant time period here is 1980, when the church-plan exemption was amended to its current form. One dictionary from that period defines maintain as -11- follows: “10.a. To cause to continue in a specified state, relation, or position.” Maintain, Oxford English Dictionary (2d ed. 1989). A more recent dictionary provides similar definitions: “1. To continue (something)” or “4. To care for (property) for purposes of operational productivity.” Maintain, Black’s Law Dictionary (10th ed. 2009). The Tenth Circuit, which recently decided the same issue, applied a similar definition. See Medina v. Catholic Health Initiatives, 877 F.3d 1213, 1226 (10th Cir. 2017) (“[W]hen ERISA says that a church plan includes a plan ‘maintained’ by a principal-purpose organization, 29 U.S.C. § 1002(33)(C), it simply means the principal-purpose organization, as Black’s says, ‘cares for the plan for purposes of operational productivity.’”). Considering Sanzone’s own allegations, we find that the Committee’s activities satisfy the plain meaning of maintain. The complaint states that “Mercy is required to designate the Committee which has sole responsibility for administration of the Plan.” Consolidated Second Am. Class Action Compl. ¶ 118, Sanzone v. Mercy Health, No. 4:16-cv-923 (E.D. Mo. Aug. 23, 2017), ECF No. 145 (hereinafter “Compl.”). It also states that the Committee has a laundry list of other powers: The . . . Committee’s responsibilities include plan administration, interpreting the Plan to determine all questions arising in the administration, interpretation and application of the Plan, adopting rules for the Plan, employing accountants, actuaries, counsel, specialists and other persons necessary to help carry out the Committee’s duties and responsibilities under the Plan, issuing directions to the Trustee concerning all benefits which are to be paid from the Trust Fund pursuant to provisions of the Plan, directing the Trustee’s exercise of its powers in the administration and investment of the Trust Fund, making all decisions and determinations concerning the right of any person to a benefit under the Plan, requiring each Participating Employer to keep such books, records, and other data as it deems necessary for the proper administration of the Plan, exercising discretion to determine that the Participating Employers pay or reimburse any reasonable costs and expenses of the Plan, and monitoring other fiduciaries. -12- Id. ¶ 137. Perhaps most damaging, the complaint states that “[t]he Benefits Committee has all discretionary powers and authority necessary to carry out the provisions of the Plan.” Id. ¶¶ 136, 158(A). And so the powers referred to in the complaint include interpreting and applying the Plan, the monitoring of fiduciaries, and all powers necessary to carry out the Plan. Those are more than managerial tasks. These allegations indicate that the Committee “cares for the [P]lan for purposes of operational productivity,” Medina, 877 F.3d at 1226 (quoting Maintain, Black’s Law Dictionary (9th ed. 2009)), that the Committee “continue[s]” or “care[s] for” the Plan, Maintain, Black’s Law Dictionary (10th ed. 2009), and that the Committee “cause[s] [the Plan] to continue” and “secure[s] the continuance of” the Plan. Maintain, Oxford English Dictionary (2d ed. 1989). Thus, under maintain’s ordinary meaning, the Committee maintains the Plan. Sanzone claims the ordinary meaning is inappropriate for two reasons. First, she argues that the ordinary meaning of maintain is too similar to the definition of administer, so applying that meaning would render administer redundant. Yet Sanzone’s argument disregards the difference between the plain meaning of administer and maintain. Administer means to “manage as a steward, to carry on, or execute (an office, affairs, etc.); to manage the affairs of (an institution, town, etc.).” Administer, Oxford English Dictionary (2d ed. 1989). It can also mean “[t]o manage (work or money) for a business or organization” or “[t]o provide or arrange (something) officially as part of one’s job.” Administer, Black’s Law Dictionary (10th ed. 2009). In summary, administer means to manage or execute, whereas maintain means to continue or care. One looks to tasks, while the other considers continuity and longevity. Thus, the terms’ meanings are not so similar as to render one redundant. -13- Second, Sanzone claims that, pursuant to precedent and ERISA’s context, the word maintain means to “commit to, and have the ultimate responsibility for, providing benefits.” Appellants’ Br. at 40. We disagree. For one, none of the precedents cited expressly or implicitly define maintain. See, e.g., Advocate, 137 S. Ct. at 1661 (discussing the importance of maintaining compared to establishing a plan); Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 12–15 (1987) (finding that ERISA’s purpose would not be served if a Maine law was preempted because the state law “create[d] no impediment to an employer’s adoption of a uniform benefit administration scheme”); Cole v. Int’l Union, United Auto., Aerospace & Agric. Implementation Workers of Am., 533 F.3d 932, 936–37 (8th Cir. 2008) (discussing the factors that indicate “whether a plan has the requisite administrative scheme to qualify as an ERISA . . . plan”). Neither does ERISA. The word is used repeatedly throughout the statute. The majority of those uses simply connect the maintenance of a plan to an entity; they do not define what constitutes maintaining a plan. See, e.g., 29 U.S.C. § 1002(1) (“The terms ‘employee welfare benefit plan’ and ‘welfare plan’ mean any plan, fund, or program . . . established or maintained by an employer or by an employee organization . . . .”); id. § 1002(32) (“The term ‘governmental plan’ means a plan established or maintained for its employees by the Government of the United States . . . .”); id. § 1222(a)(3) (“The Joint Pension . . . Task Force shall . . . make a full study and review of . . . the appropriate treatment under subchapter III of this chapter (relating to termination insurance) of plans established and maintained by small employers . . . .”). In other places, the word refers to the obligation to keep records or documents, or to keep costs at a certain level. See, e.g., id. § 1027 (“Every person subject to a requirement to file any report . . . shall maintain a copy of such report . . . .”); id. § 1059(a)(2) (“If more than one employer adopts a plan, each such employer shall furnish to the plan administrator the information necessary for the administrator to maintain the records, and make the reports, required by paragraph -14- (1).”); id. § 1001b(b)(3) (“The Congress further finds that modification of the current termination insurance system and an increase in the insurance premium for single-employer defined benefit pension plans . . . is necessary to maintain the premium costs of such system at a reasonable level . . . .”). The statute provides no guidance that the word has a denotation other than its ordinary meaning. Sanzone argues that one particular provision supports her offered definition. In that provision, ERISA defines administrator and plan sponsor: (A) The term “administrator” means— (i) the person specifically so designated by the terms of the instrument under which the plan is operated; (ii) if an administrator is not so designated, the plan sponsor; or (iii) in the case of a plan for which an administrator is not designated and a plan sponsor cannot be identified, such other person as the Secretary may by regulation prescribe. (B) The term “plan sponsor” means (i) the employer in the case of an employee benefit plan established or maintained by a single employer, (ii) the employee organization in the case of a plan established or maintained by an employee organization, or (iii) in the case of a plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan. Id. § 1002(16). Relying on that provision and case law, Sanzone argues that plan sponsors have two groups of powers—fiduciary powers and the power “to adopt, modify, or terminate welfare plans.” See Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 78 (1995). Section 1002(16)(A) allows sponsors to delegate fiduciary powers -15- to administrators. Yet, she points out, the statute does not contemplate plan sponsors relinquishing the power to adopt, modify, or terminate welfare plans. Further, § 1002(16)(B) consistently identifies the sponsor as the entity that establishes and maintains the plan. Hence, Sanzone asserts, the retained powers—the power to “adopt, modify, or terminate ” welfare plans, or “making the benefit commitment and designing the terms of the plan”—are related to or synonymous with established or maintained. Appellants’ Br. at 49, 51. Sanzone’s reliance on § 1002(16) fails. “The case must be a strong one indeed, which would justify a Court in departing from the plain meaning of words . . . in search of an intention which the words themselves did not suggest.” United States v. Wiltberger, 18 U.S. 76, 96 (1820). The referenced language simply does not warrant a departure from the plain meaning of maintain. First, we note that nothing in § 1002(16) purports to define maintain or references the power to adopt, modify, terminate, make benefit commitments, or designate terms of a plan. Second, applying Sanzone’s definition would produce undesirable interpretational results. Sanzone’s definition requires an organization to have authority over the adoption, modification, termination, benefit commitments, or terms of a plan in order to maintain it. Yet to constitute a principal-purpose organization, the organization must be “controlled by or associated with a church or a convention or association of churches.” 29 U.S.C. § 1002(33)(C)(i) (emphasis added). Sanzone’s definition vitiates the control requirement. Consider an organization that satisfies the provision because it administers a plan and is controlled by a church. That organization might have the ability to adopt, modify, or terminate a plan, but it would still answer to the church for those decisions because the church controls it. The organization would lack the final authority or ultimate responsibility for the plan that Sanzone’s definition hinges on. Thus, we prefer the construction that enables us to “give effect, if possible, to every clause and word of a statute.” Williams v. Taylor, 529 U.S. 362, 404 (2000) (quoting United States v. Menasche, 348 U.S. 528, 538–39 (1955)). -16- In short, Sanzone has failed to show that ERISA’s context requires a deviation from the ordinary meaning of maintain. And under that ordinary meaning, the Committee maintains the plan.
We next address Sanzone’s argument that the Committee does not constitute an organization. The principal-purpose provision requires an organization to maintain the plan. 29 U.S.C. § 1002(33)(C)(i). We will apply the term’s ordinary meaning. The district court cited numerous definitions, which found that an “‘organization’ [w]as an administrative and functional structure,” or “a group of people who work together in an organized way for a shared purpose.” Sanzone v. Mercy Health, 326 F. Supp. 3d 795, 805 (E.D. Mo. 2018) (first quoting Organization, Merriam-Webster’s II Collegiate Dictionary (10th ed. 2002), then quoting Organization, Cambridge Dictionary, https://dictionary.cambridge.org/us/dictionary/ english/organization (last visited Oct. 28, 2019)). Other dictionaries provide similar definitions. See Organization, Oxford English Dictionary (3d ed. 2004) (“An organized body of people with a particular purpose, as a business, government department, charity, etc.”); Organization, Black’s Law Dictionary (10th ed. 2009) (“A body of persons (such as a union or corporation) formed for a common purpose.”). Applying like definitions, the Tenth Circuit considered whether a hospital’s benefits committee was an organization. Medina, 877 F.3d at 1226. There, the benefits subcommittee had “a Chair and four or five voting members” and its purpose was to “provid[e] for the proper operation, administration[,] and maintenance of the Plan.” Id. (internal quotation omitted). Because its structure and activities satisfied organization’s plain meaning, our sister circuit found that the committee constituted an organization. Id. -17- Doing the same here, we find that the Committee constitutes “a group of people who work together in an organized way for a shared purpose.” Sanzone, 326 F. Supp. 3d at 805 (quoting Organization, Cambridge Dictionary, https://dictionary. cambridge.org/us/dictionary/english/organization (last visited Oct. 28, 2019)). It is a group of people; the Committee has five members—four of whom are sisters of the Order. As for its purpose, the complaint states that the “Committee provides fiduciary oversight for Mercy’s employee benefit programs and retirement Plan, including for the Mercy Plan.” Compl. ¶ 20. Therefore, because it is a group that works together for a common purpose, the Committee satisfies the ordinary meaning of organization. Again, Sanzone suggests that the ordinary meaning is too broad in light of the statute’s operation. Specifically, she argues that ERISA distinguishes between (1) church-associated organizations that can maintain plans, (2) principal-purpose organizations that can maintain plans, and (3) other church-associated organizations that cannot maintain plans. Applying the ordinary meaning of organization allows the third category to create the second. That, Sanzone claims, allows entities that Congress intended ERISA to cover to avoid the statute’s requirements. Put another way, she believes that the exception swallows the rule if the ordinary meaning of organization applies. We disagree. Most importantly, the text of ERISA does not bar any entity from creating a principal-purpose organization. Further, it is unclear what organizations would satisfy Sanzone’s standard. She “would only allow the exemption for wholly independent bodies, constituted with the principal purpose of administering or funding a retirement plan, and endowed with the power to modify or terminate that plan.” Medina, 877 F.3d at 1226. Our sister circuit rejected that structure because, although “[t]here may be some organization out there that is structured like that, . . . it certainly is not the most intuitive way to do it.” Id. at 1227. “[I]t is not clear what the advantage of such a structure would be, or why Congress would have required it.” Id. -18- All in all, it would render the provision nearly inoperable. We decline to interpret the term in such a manner. At bottom, the statutory context does not suggest that we need to depart from the plain meaning of organization, so we decline to do so. In consequence, we find that the Committee, with the powers alleged in the complaint, maintains the Plan and is a principal-purpose organization under the statute. Therefore, Sanzone has failed to plead a plan that is governed by ERISA, and thus her claims under ERISA fail.
Sanzone argues that, even if the district court applied the correct statutory definitions, it abused its discretion by deciding the issue sua sponte, effectively denying her “the opportunity for . . . discovery to establish [her] claim.” See Pudlowski v. The St. Louis Rams, LLC, 829 F.3d 963, 964 (8th Cir. 2016) (per curiam). Specifically, she argues that, per maintain’s ordinary meaning, the Committee does not care for the Plan. The complaint alleges that the Committee met seven times between the beginning of December 2010 and the end of June 2016. Compl. ¶¶ 141–42. It also states that the Committee delegated their power to set funding policy to a committee of the Board. Id. ¶ 139. Sanzone argues that these two facts indicate that the Committee could not be the entity ensuring that the Plan, which has hundreds of millions of dollars in assets, continues. Considering a similar argument, the Seventh Circuit remanded a motion for summary judgment back to the district court for further discovery. Smith v. OSF HealthCare Sys., 933 F.3d 859, 870–71 (7th Cir. 2019). The defendants claim Sanzone waived that argument by not presenting it to the district court. We agree. “We have often explained that arguments not presented to -19- the court below will not be considered on appeal.” Glover v. McDonnell Douglas Corp., 150 F.3d 908, 909 (8th Cir. 1998). Her complaint and documents below mention facts that support her claim for further discovery, but Sanzone did not argue that she was entitled to additional discovery. Merely mentioning the facts—even in context of another argument—is not enough to preserve the argument. See Ames v. Nationwide Mut. Ins. Co., 760 F.3d 763, 770–71 (8th Cir. 2014) (finding that an argument was not preserved by facts in the court filings that suggested the argument was valid). Nor did Sanzone indicate what additional discovery would have yielded. See Pudlowski, 829 F.3d at 964–65 (finding the district court abused its discretion by declining to allow additional jurisdictional discovery where a party submitted affidavits that indicated that the parties were diverse); Lakin v. Prudential Sec., Inc., 348 F.3d 704, 712–13 (8th Cir. 2003) (finding the district court abused its discretion by not allowing further discovery regarding the existence of general jurisdiction where the appellants filed a motion requesting such discovery). Because Sanzone did not assert this argument below or offer proof as to what additional discovery would have revealed, we find that the argument was waived. Consequently, we find that Sanzone failed to adequately state a claim under ERISA because the Plan, as alleged, is a church plan. Further, she waived any claim for additional discovery by not requesting it below.