United States District Court, C.D. Illinois, Peoria Division
BONNIE BAILEY, PEGGY WISE, and JUNE SCHWIERJOHN, individually and on behalf of themselves and all others similarly situated, Plaintiffs,
OSF HEALTHCARE SYSTEM, THE SISTERS OF THE THIRD OF ST. FRANCIS EMPLOYEES PENSION PLAN ADMINISTRATIVE COMMITTEE, THE SAINT ANTHONY'S HEALTH CENTER RETIREMENT COMMITTEE, and JOHN DOES 1-20, Defendants.
DARROW, UNITED STATES DISTRICT JUDGE
the Court are Plaintiffs' motion for an order designating
their present counsel, Kessler Topaz Meltzer & Check,
LLP, Izard Kindall and Raabe LLP, and the Janssen Law Center,
as interim lead class counsel pending a motion for class
certification, ECF No. 17; proposed intervenors Kasandra
Anton and Sheilar Smith's (“the Smith
plaintiffs”) motion to intervene, ECF No. 23; their
motion to transfer this case to the Southern District of
Illinois, ECF No. 25; their motion for leave to file a reply
to the responses thereto, ECF No. 33; Defendants' motion
for a hearing on the motions to intervene and transfer, ECF
No. 34; and Plaintiffs' motion to file a notice of
supplemental information, ECF No. 44. For the following
reasons, the motion to appoint interim lead counsel is DENIED
WITHOUT PREJUDICE, the motion to intervene GRANTED as
specified herein, the motion to transfer DENIED, the motion
for hearing DENIED, and the motions for leave to file
lawsuit was filed on May 3, 2016, initially only by
Plaintiffs Bailey and Wise. Compl., ECF No. 1. They alleged
that Defendant OSF HealthCare System (“OSF”)
maintains a retirement savings plan (“the plan”)
for the benefit of its employees, but that this plan is
underfunded by at least $350 million. Id. at 1-2.
Bailey and Wise alleged that this was so because, while OSF
claims that the plan falls within the “church
plan” exemption to the Employee Retirement Income
Security Act of 1974, 29 U.S.C. §§ 1001-1461
(“ERISA”), the plan does not fall within the
exemption and must be funded at the level ordinarily required
by ERISA. Id. at 2. Both plaintiffs were or had been
employees at OSF's Saint Francis Medical Center
(“Saint Francis”) in Peoria, Illinois. They
purported to sue on behalf of themselves and “[a]ll
participants in and beneficiaries of The Sisters of the Third
Order of St. Francis Employees Retirement Savings Plan . . .
.” Id. at 4.
OSF operates eleven hospitals, only six of which, including
Saint Francis, are located within the Central District of
Illinois. See Defs.' Resp. Mot. Transfer 3, ECF
No. 32. One hospital, Saint Anthony's Medical Center
(“Saint Anthony's”), is located in the
Southern District of Illinois. Id. Six days before
Bailey and Wise filed this suit in the Central District,
prospective intervenor Smith, a former employee of Saint
Anthony's, filed a similar lawsuit in the Southern
District alleging much the same thing as to all OSF
retirement plans-that OSF is justifying underfunding its
retirement plan by treating it as a church plan exempt from
the requirements of ERISA. Smith Compl. 2, ECF No. 1;
Smith v. OSF, No. 3:16-cv-00467-SMY-RJD (S.D. Ill.
Apr. 27, 2016) (hereafter “Smith”).
Smith purported to sue on behalf of “all participants
and beneficiaries of defined benefit pension plans that are
established, maintained, administered, and/or sponsored by
OSF, OSF's affiliates, ” or other OSF committees.
Id. at 1.
sets of plaintiffs have since amended their initial
complaints, adding plaintiffs. The plaintiffs in this case
have added one plaintiff, Schwierjohn, who is a participant
in the plan run by Saint Anthony's. Pls.' Mot. Leave
File Notice 2.
named defendant in both cases and represented by the same
counsel in both, moved on June 13, 2016 in the Southern
District to transfer Smith to the Central District.
ECF No. 33; Smith. On July 25, 2016, Judge Yandle
denied that motion. ECF No. 37; Smith. Plaintiffs
filed their motion for an order appointing their counsel
interim lead counsel on July 19, 2016. The Smith
plaintiffs then filed their motions to intervene and transfer
on August 9, 2016.
The Motion to Intervene
Smith plaintiffs, because they are not parties to
this case, must intervene in order to move for the transfer
of the case, as they concede. Mem. Supp. Mot. Intervene 1,
ECF No. 24. They argue that the court must permit their
intervention, pursuant to Federal Rule of Civil Procedure
24(a), because disposition of this case could impair their
interest in the outcome of theirs, and because their
interests in that disposition may not adequately be protected
by Plaintiffs. Id. at 8-10. In the alternative, they
argue that the Court should permit them to intervene pursuant
to Rule 24(b), because their suit shares questions of law and
fact with Plaintiffs'. Id. at 11. Plaintiffs
argue that the Smith plaintiffs cannot intervene
“of right, ” but concede that the Court should
permit the intervention under Rule 24(b). Pls.' Resp.
Mot. Intervene 1; ECF No. 28. Defendants echo the position.
Defs.' Resp. Mot. Intervene 1; ECF No. 31.
Standard on a Motion to Intervene
provides for two kinds of intervention by a non-party to a
suit. “On timely motion, the court must permit
anyone to intervene who” is supplied such a right by
statute, or who “claims an interest relating to the
property or transaction that is the subject of the action,
and is so situated that disposing of the action may as a
practical matter impair or impede the movant's ability to
protect its interest, unless existing parties adequately
represent that interest.” Fed.R.Civ.P. 24(a) (emphasis
added). This kind of intervention is called intervention of
right. Id. Alternatively, the court
“may permit anyone to intervene, ”
termed permissive intervention, when someone so moves who is
given a conditional right to do so by statute, or who
“has a claim or defense that shares with the main
action a common question of law or fact.” Fed.R.Civ.P.
24(b) (emphasis added). On a motion for intervention of right
under Rule 24(a), the movant bears the burden of showing that
the requirements of the rule are met, which the Seventh
Circuit has summarized as requiring him to “(1) make a
timely application, (2) have an interest relating to the
subject matter of the action, (3) be at risk that that
interest will be impaired by the action's disposition and
(4) demonstrate a lack of adequate representation of the
interest by the existing parties.” Vollmer v.
Publishers Clearing House, 248 F.3d 698, 705 (7th Cir.
of right may be subject to “appropriate conditions or
restrictions responsive among other things to the
requirements of efficient conduct of the proceedings.”
Fed.R.Civ.P. 24(a)(2) advisory committee's notes to 1966
amendment. On a motion for permissive intervention, the
latter three requirements for an intervention of right are
dropped, and all that an intervenor need show is that (1)
their motion is timely and (2) “the applicant's
claim or defense and the main action have a question of law
or fact in common.” Flying J, Inc. v. Van
Hollen, 578 F.3d 569, 573 (7th Cir. 2009).