Religious Hospitals Should Fully Fund Their Employees’ Pensions

By Shailin Thomas

In July, the Ninth Circuit held that Dignity Health, a faith-based hospital system in the southwest United States, was not exempt from the employee pension requirements of the Employee Retirement Income Security Act (ERISA). The hospital system decided in 1992 that it would consider itself a church for the purposes of ERISA, and therefore would qualify for ERISA’s church exemption and not have to provide fully funded or insured pensions for its employees. As a result of this decision, it underfunded its employees’ pensions to the tune of $1.2 billion.

The Ninth Circuit was the second to make such a ruling after the Seventh Circuit issued a similar decision against Advocate Health Care in March. Many thought these rulings would lead the Supreme Court to leave the issue alone, but that may not be what SCOTUS has in mind. Associate Justice Anthony Kennedy recently granted Dignity reprieve from complying with the Ninth Circuit decision while he and the other justices decide whether to hear the case. Hopefully, this signals that the Court is planning to extend the Ninth Circuit’s decision, ensuring that hospital systems with religious affiliations across the country fulfill their responsibilities to their employees and provide them with the pensions they deserve.

Dignity Health is not a church. While it did have an official relationship with the Catholic Church until 2012, at the end of the day Dignity Health is a medical services juggernaut. It is the fifth-largest hospital system in the country, with 39 acute care hospitals and over 250 ancillary facilities spread across Arizona, Nevada, and California. Its annual revenue is approximately $10.5 billion. It’s so big that in 2012 it was included in an antitrust investigation by the California Attorney General’s Office to assess the impact of hospital consolidation on health care pricing in California.

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A Common Morality?

By Seán Finan

600px-lab_mouse_mg_3244Last week, a patent application in India was refused, apparently on the basis that the invention under review could have been used to counterfeit money. This practice of denying patents on the basis of public policy or morality is almost as old as the practice of granting patents. For example, the State of Monopolies was enacted in England in 1624 to prohibit monopolies where they would be “mischievous to the State”. In many other jurisdictions, patents on food and medicines were prohibited, on the basis that the public good served by these products outweighed any claims of monopoly rights by the inventor. The other approach is preferred in the US. Cases like Diamond v Chakrabarty removed much of the normative question from American patent law and it has been strongly argued that a patent application “is not an ethical event.”

Whether a patent can be refused on the basis of morality is a difficult enough question, but the problem is compounded once the “morality” in question is not confined to a single jurisdiction. The harmonization of patent law across Europe in the last fifty years has forced the European Patent Office (EPO) to consider how to make a moral judgement on behalf of all the contracting states to the European Patent Convention. Its approach has been neither consistent between cases nor consistent with the underlying treaties. I would like to give a quick sketch of the contrast between the European legal framework and its manifestation in the decisions of the EPO.

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