Opinion ID: 4520220
Heading Depth: 2
Heading Rank: 3

Heading: Establishment Clause Standing

Text: Sanzone argues that, if the Plan is a church plan, the church-plan exemption violates the Establishment Clause. The district court dismissed that argument because it found that Sanzone lacked standing to challenge the statute. “It is well established that standing is a jurisdictional prerequisite that must be resolved before reaching the merits of a suit.” City of Clarkson Valley v. Mineta, 495 F.3d 567, 569 (8th Cir. 2007). There are three elements to standing: (1) “the plaintiff must have suffered an ‘injury in fact,’” (2) “there must be a causal connection between the injury and the -20- conduct complained of,” and (3) “it must be ‘likely,’ as opposed to merely ‘speculative,’ that the injury will be ‘redressed by a favorable decision.’” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992) (citations omitted). An injury in fact must be “(a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” Id. at 560 (cleaned up). “The party invoking federal jurisdiction bears the burden of establishing these elements.” Id. at 561. “[W]hen a motion to dismiss is made on standing grounds the standing inquiry must, as a prerequisite, be done in light of the factual allegations of the pleadings.” Mineta, 495 F.3d at 570. The district court determined that Sanzone only “raise[d] the specter of a potentially underfunded Plan in the future without ERISA protections.” Sanzone, 326 F. Supp. 3d at 809. That was not enough to establish a concrete, redressable harm. When a plan is underfunded, there is no direct impact on the beneficiaries. They only feel an effect if the underfunding leads to a reduction in their benefits. Because that is a potential, future injury, a “plaintiff must demonstrate that the threatened injury is certainly impending, or there is a substantial risk that the harm will occur.” In re SuperValu, Inc., 870 F.3d 763, 769 (8th Cir. 2017) (cleaned up). We agree with the district court that the underfunding here does not meet that standard. Sanzone admits that Mercy would have sufficient assets to pay the Plan’s benefits for 9.5 years if it never made another contribution to the Plan. Appellants’ Br. at 10. That is not “certainly impeding.” SuperValu, 870 F.3d at 769. And although the Plan is underfunded by hundreds of millions of dollars, Mercy is a multibilliondollar nonprofit. Addressing a similar alleged injury, the Sixth Circuit found that the underfunding was a hypothetical injury. See Duncan v. Muzyn, 885 F.3d 422, 428 (6th Cir. 2018) (“Plaintiffs will only be harmed if the Plan runs out of money and if the TVA refuses to make up the shortfall while Plaintiffs are still receiving benefits from the Plan. . . . [O]ur sister circuits have concluded that plaintiffs lack standing premised on similar injuries.”). Under these facts, we agree. -21- Nonetheless, at oral argument, Sanzone identified four specific injuries pleaded in the complaint: [1] the Plan is underfunded by hundreds of millions of dollars, . . . [2] because it doesn’t have ERISA protections, there are no funding obligations . . . for the Plan, [3] the Pension Benefit Guarantee Corporation does not ensure the benefits of this Plan, and [4] participants . . . don’t have any of the notice provisions that would tell them how to plan for their future because [the defendants] aren’t required to give them if it is a church plan. Oral Arg. at 4:11–4:47. Those injuries are indeed alleged in various provisions of the complaint. See Compl. ¶ 290 (“The church plan exemption, as claimed by Mercy, places its thousands of longtime employees’ justified reliance on their pension benefits at great risk, including because the Plan is uninsured and underfunded. In addition, Mercy fails to provide the multitude of other ERISA protections designed to safeguard its employees’ pensions.”); id. at 68 (praying the court remedy the situation by “[r]equiring Mercy to fund the Mercy Plan in accordance with ERISA’s funding requirements, disclose required information to the Mercy Plan’s participants and beneficiaries, and otherwise comply with all other reporting, vesting, and funding requirements of . . . ERISA”). The district court and Mercy failed to address many of those injuries—most importantly, the deprivation of ERISA protections. Those protections include ERISA’s funding requirements, Pension Benefit Guarantee Corporation insurance, and notice requirements. But for the church-plan exemption, Sanzone would be able to sue under ERISA to enforce those protections. The inquiry, therefore, is whether the deprivation of the specified ERISA protections constitutes a sufficient injury to confer standing. -22- Though raised by Sanzone below, the district court did not consider that specific question. “When a district court fails to address a matter properly presented to it, we ordinarily remand to give the court an opportunity to rule in the first instance.” GEICO Cas. Co. v. Isaacson, 932 F.3d 721, 724 (8th Cir. 2019). We follow that principle here. Therefore, we remand to the district court to determine whether the deprivation of ERISA protections confers Article III standing, and if so, whether the church-plan exemption violates the Establishment Clause. If there is Article III standing, the state law claims should be reinstated pursuant to the court’s supplemental jurisdiction. See 28 U.S.C § 1367.