A federal judge has denied a motion to dismiss abreach-of-fiduciary-duty lawsuit against Denver-based CatholicHealth Initiatives, saying that the overseers of the hospitalsystem’s defined benefit plan can be sued, even though the planoperates as a “churchplan.”

The decision, filed on Sept. 30, was made in spite of the factthat, in August, U.S. District Judge Robert Blackburn rejected amagistrate judge’s recommendation that the court strip CHI of itschurch plan status.

Blackburn found that the allegations made by the lead plaintiff,Janeen Medina, were “adequate to put the individual defendants onnotice that they each allegedly failed to exercise the power oftheir positions to make the plan compliant with ERISA.”

The Employee Retirement Income Security Act exempts church plansfrom many of the law’s requirements. The law defines church plansas “a plan established and maintained for its employees by a churchor by a convention or association of churches” that have tax-exemptstatus.

Originally filed in May of 2013, plaintiffs in the case allegethat CHI, a non-profit health care conglomerate established by theCatholic church and operating in 17 states, failed to adequatelyfund its pension plans, to “the detriment of 78,000 employees whodeserve better,” according to court documents.

Specifically, the plaintiffs claim CHI’s defined benefit plansare underfunded by $892 million.

CHI has maintained that it is not beholden to ERISA fundingobligations because it operates as church plans.

The plaintiffs claim that none of CHI’s retirement plans meetthe definition of a church plan, because CHI “plainly is not achurch or a convention or association of churches,” according tothe suit.

The case is one of several class-actions in courts throughoutthe country claiming more than $2 billion of pension underfundingby church-affiliated health care systems.

Representing the plaintiffs in all of the cases are the lawfirms Kellar Rohrback in Seattle and Cohen, Milstein, Sellers andToll in Washington, D.C. The Groom Law Group is defending CHI.