Snyder, M.D. v. Neurological Surgery Practice of Long Island, PLLC
2:24-cv-06911
E.D.N.YMay 19, 2025Background
- Dr. Brian Snyder, a neurosurgeon, and his medical P.C., sued Neurological Surgery Practice of Long Island (NSPLI) and its management arm over alleged denial of ESOP (Employee Stock Ownership Plan) benefits after his termination.
- Snyder, previously a shareholder turned ESOP participant after a corporate restructuring in 2020, was diagnosed with stage-four lung cancer in 2021 and continued to work during his illness.
- Plaintiffs allege Snyder was wrongfully terminated to prevent his ESOP benefits from vesting, particularly as his termination occurred shortly before full vesting was set to occur.
- The complaint raised claims under ERISA (specifically §§ 502 and 510) and various state law breach of contract theories.
- Defendants moved to dismiss, arguing Snyder was barred from claiming ESOP benefits due to a tax election (1042 election) made during the stock sale, which disqualified him as a plan participant under both the Tax Code and the ESOP’s own language.
- Federal jurisdiction was based solely on the federal (ERISA) questions; with ERISA claims dismissed, only state claims remained.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held (Court's Ruling) |
|---|---|---|---|
| ERISA Standing: Is Snyder a plan participant? | Snyder entitled to ESOP benefits; conduct and communications showed eligibility. | 1042 tax election barred Snyder from participation per plan and IRS rules. | 1042 election disqualified Snyder; no ERISA relief possible. |
| ERISA § 502(b)/§ 510 Interference | Termination was to prevent ESOP benefit vesting, violating ERISA anti-interference. | No ERISA rights exist for Snyder due to plan exclusion. | No ERISA rights available; claims dismissed. |
| Waiver of 1042/Plan Exclusion | Defendants’ conduct (e.g., slide deck, accountant comments) constituted waiver. | No clear, intentional waiver; policy unchanged; plan language controls. | No valid waiver found; plan/tax code language controls. |
| Supplemental Jurisdiction over State Claims | Court should retain jurisdiction over related state law contract claims. | With ERISA disposed, no basis for federal question, no diversity. | Federal claims dismissed; state claims dismissed without prejudice. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard for facial plausibility in motions to dismiss)
- Ashcroft v. Iqbal, 556 U.S. 662 (clarified plausibility standard; conclusory allegations insufficient)
- Dister v. Continental Group, Inc., 859 F.2d 1108 (ERISA § 510 discrimination and motivating factor standard)
- Krys v. Pigott, 749 F.3d 117 (complaint must state plausible claim)
- Koch v. Christie’s Int’l PLC, 699 F.3d 141 (standards for Rule 12(b)(6) motions, inferences in favor of plaintiff)
- Mayor & City Council of Baltimore v. Citigroup, Inc., 709 F.3d 129 (pleading standard for plausibility in complaint)
- Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234 (supplemental jurisdiction standard; common nucleus of operative fact)
- Lundy v. Catholic Health Sys. of Long Island, 711 F.3d 106 (supplemental jurisdiction, discretion to decline state claims)