Medina v. Catholic Health Initiatives, 877 F.3d 1213

Background

Catholic Health Initiatives (CHI) is a tax-exempt nonprofit operating hospitals and health facilities; it sponsors a retirement plan with ~90,000 participants and ~$3 billion in assets administered by a CHI Board-appointed Subcommittee.
ERISA excludes “church plans” from many of its requirements and, since 1980, extends that exemption to plans "maintained by" principal-purpose organizations that are controlled by or associated with a church.
Plaintiff Janeen Medina (class action) challenged the exemption: she argued CHI’s plan does not meet the statutory criteria (Subcommittee not a qualifying principal-purpose organization; too many participants are not church employees), that genuine factual disputes precluded summary judgment, and that the exemption violates the Establishment Clause.
The district court granted summary judgment for CHI; on appeal the Tenth Circuit affirmed, applying the Supreme Court’s ruling in Advocate Health Care Network v. Stapleton (which permits principal-purpose organizations to qualify even if a church did not establish the plan).
The panel applied a three-step statutory test (1) entity is tax-exempt and associated with a church, (2) plan is maintained by a principal-purpose organization, (3) that principal-purpose organization is associated with a church — and concluded all three prongs were satisfied for CHI and its Subcommittee.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether CHI is a tax-exempt organization “associated with” a church	CHI is not sufficiently integrated with or governed by the Catholic Church to be "associated"	CHI is the civil-law counterpart to a Catholic public juridic person, listed in The Official Catholic Directory, subject to Vatican approvals, and shares religious bonds	CHI is associated with the Catholic Church; statutory definition (shares common religious bonds and convictions) satisfied
Whether the Subcommittee is a principal-purpose "organization" that "maintains" the plan	Subcommittee is merely an internal committee of CHI (not an independent organization) and CHI "maintains" the plan (maintain means power to modify/terminate)	Subcommittee performs the operational care, administration, and delegated authority over the plan and fits ordinary definitions of "organization" and "maintain"	Subcommittee qualifies as an "organization" and "maintains" the plan (maintain = care/operational stewardship, not necessarily termination power)
Whether the principal-purpose organization (Subcommittee) is "associated with a church"	(Argued only late; plaintiff implied it was not)	Subcommittee is a subdivision of CHI, bound by CHI mission and plan documents to follow Catholic teachings	Subcommittee shares CHI’s association with the Catholic Church and thus is associated with a church
Whether the exemption violates the Establishment Clause	Exemption improperly advances religion, favors religious adherents, and entangles government	Exemption is a permissible religious accommodation that avoids entanglement; Supreme Court precedent allows exemptions for religious organizations	Exemption passes Lemon: secular purpose (avoid entanglement), principal effect does not impermissibly advance religion (Amos precedent), and it avoids excessive entanglement; Establishment Clause claim rejected

Key Cases Cited

Advocate Health Care Network v. Stapleton, 137 S. Ct. 1652 (U.S. 2017) (principal-purpose organizations may qualify as "church plans" even if a church did not establish the plan)
Corporation of the Presiding Bishop v. Amos, 483 U.S. 327 (U.S. 1987) (religious accommodations in statutes do not necessarily violate the Establishment Clause)
Hosanna-Tabor Evangelical Lutheran Church & School v. E.E.O.C., 565 U.S. 171 (U.S. 2012) (religious organizations have independence in internal governance and decisions)
Cutter v. Wilkinson, 544 U.S. 709 (U.S. 2005) (broad room for religious accommodations under the Establishment Clause)