Recently, a favorable ruling for a client was secured in an Order likely to impact the ERISA litigation field. In the Order, the District Court for the Middle District of Georgia ruled in our client’s favor by finding that a pension plan at issue was not governed by ERISA and was instead an exempt government plan, such that ERISA preemption principles did not apply.

The case involves a dispute over the sponsorship and funding obligations for a pension plan formed by a Hospital Authority in Georgia. Our client, a private non-profit entity, provided certain administrative services related to the plan. The State entity in the case (Hart County) has claimed that our client also took over funding responsibility for the plan, becoming its sponsor and subject to liability for the plan, including funding – a multi-million-dollar issue. Our client filed a declaratory action against Hart County in Georgia Superior Court to resolve the dispute. The County then (1) removed the case to federal court; (2) moved to dismiss the case arguing that the plan was now a non-government plan and subject to ERISA (thus preempting any state law claims); and (3) moved to stay the case so the County could pursue an advisory opinion from the Department of Labor (DOL) on whether ERISA governs the plan. Our client sought to remand the case and opposed the County’s motions.

In the Order, the federal district court resoundingly rejected the County’s arguments, denying both motions and remanding the case. The district court confirmed that under the plain text of ERISA, the plan remained a government plan that is exempt from ERISA. In part, the district court based its finding on a distinction that appears not to have been previously addressed within the Eleventh Circuit: whether the “government plan” exemption from ERISA applies to a pension plan that was “established or maintained” by a government entity (as defined in ERISA, Title I), as opposed to requiring that the plan be both established and maintained by a government entity to qualify for the exemption (as defined in ERISA, Title IV). The district court held that because this matter involved ERISA, Title I, the plan need only have been “established” by a government entity to qualify for the exemption. Because the plan was established by a government entity, ERISA did not apply.

The Order is linked here.