Appendix — Nixon v. Merrill Lynch, Pierce, Fenner & Smith Inc.

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TABLE OF CONTENTS

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1. Relevant provisions of the Missouri Human Rights Act,

Mo.Rev.Stat., Chapter 213:

213.030 Powers and duties of commission --

rulemaking, procedure, review. -- 1. The powers and

duties of the commission shall be:

(1) — To seek to eliminate and prevent discrimination

because of race, color, religion, national origin, ancestry, sex,

age as it relates to employment, handicap, or familial status

as it relates to housing and to take other actions against

discrimination because of race, color, religion, national origin,

ancestry, sex, age, handicap, or familial status as provided by

law; and the commission is hereby given general jurisdiction

and power for such purposes;

(2) | To implement the purposes of this chapter first

by conference, conciliation and persuasion so that persons

may be guaranteed their civil rights and goodwill be fostered;

(3) To formulate policies to implement the

purposes of this chapter and to make recommendations to

agencies and officers of the state and political subdivisions in

aid of such policies and purposes;

(4) To appoint such employees as it may deem

necessary, fix their compensation within the appropriations

provided and in accordance with the wage structure

established for other state agencies, and prescribe their duties;

(5) To obtain upon request and utilize the services

of all governmental departments and agencies to be paid from

appropriations to this commission;

(6) To adopt, promulgate, amend, and rescind

suitable rules and regulations to carry out the provisions of

this chapter and the policies and practices of the commission

in connection therewith;

(7) To receive, investigate, initiate, and pass upon

complaints alleging discrimination in employment, housing or

in places of public accommodations because of race, color,

religion, national origin, ancestry, sex, age as it relates to

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employment, handicap, or familial status as it relates to

housing and to require the production for examination of any

books, papers, records, or other materials relating to any

matter under investigation;

(8) To hold hearings, subpoena witnesses, compel

their attendance, administer oaths, to take the testimony of

any person under oath, and, in connection therewith, to

require the production for examination of any books, papers

or other materials relating to any matter under investigation

or in question before the commission;

(9) To issue publications and the results of studies

and research which will tend to promote goodwill and

minimize or eliminate discrimination in housing, employment

or in places of public accommodation because of race, color,

religion, national origin, ancestry, sex, age as it relates to

employment, handicap, or familial status as it relates to

housing;

(10) To provide each year to the governor and to

the general assembly a full written report of all its activities

and of its recommendations;

(11) To adopt an official seal;

(12) To cooperate, act jointly, enter into cooperative

or work sharing agreements with the United States Equal

Employment Opportunity Commission, the United States

Department of Housing and Urban Development, and other

federal agencies and local commissions or agencies to achieve

the purposes of this chapter;

(13) To accept grants, private gifts, bequests, and

establish funds to dispose of such moneys so long as the

conditions of the grant, gift, or bequest are not inconsistent

with the purposes of this chapter and are used to achieve the.

purposes of this chapter;

(14) To establish a human rights fund as defined in

section 213.010, for the purposes of administering sections

213.040, 213.045, 213.050, 213.070, 213.075, and 213.076.

2. No rule or portion of a rule promulgated under

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the authority of this chapter shall become effective until it has

been approved by the joint committee on administrative rules

in accordance with the procedures provided herein, and the

delegation of the legislative authority to enact law by the

adoption of such rules is dependent upon the power of the

joint committee on administrative rules to review and suspend

rules pending ratification by the senate and the house of

representatives as provided herein. "

3. Upon filing any proposed rule with the

secretary of state, the filing agency shall concurrently submit

such proposed rule to the committee, which may hold

hearings upon any proposed rule or portion thereof at any

time.

4. A final order of rulemaking shall not be filed

with the secretary of state until thirty days after such final

order of rulemaking has been received by the committee.

The committee may hold one or more hearings upon such

final order of rulemaking during the thirty-day period. If the

committee does not disapprove such order of rulemaking with

the thirty-day period, the filing agency may file such order of

rulemaking with the secretary of state and the order of

rulemaking shall be deemed approved.

5. The committee may, by majority vote of the

members, suspend the order of rulemaking or portion thereof

by action taken prior to the filing of the final order of

rulemaking only for one or more of the following grounds:

(1) An absence of statutory authority for the

proposed rule;

(2) | An emergency relating to public health, safety

or welfare;

(3) | The proposed rule is in conflict with state law;

(4) A substantial change in circumstance since

enactment of the law upon which the proposed rule is based.

6. If the committee disapproves any rule or

portion thereof, the filing agency shall not ‘file such

disapproved portion of any rule with the secretary of state and

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the secretary of state shall not publish in the Missouri

Register any final order of rulemaking containing the

disapproved portion.

ts If the committee disapproves any rule or

portion thereof, the committee shall report its findings to the

senate and the house of representatives. No rule or portion

thereof disapproved by the committee shall take effect so long

as the senate and the house of representatives ratify the act of

the joint committee by resolution adopted in each house

within thirty legislative days after such rule or portion thereof

has been disapproved by the joint committee.

8. Upon adoption of a rule as provided herein,

any such rule or portion thereof my be suspended or revoked

by the general assembly either by bill or, pursuant to section

8, article IV of the constitution, by concurrent resolution upon

recommendation of the joint committee on administrative

rules. The committee shall be authorized to hold hearings

and make recommendations pursuant to the provisions of

section 536.037, RSMo. The secretary of state shall publish

in the Missouri Register, as soon as practicable, notice of the

suspension or revocation.

213.055. Unlawful employment practices. - 1. It

shall be an unlawful employment practice:

(1) For an employer, because of the race, color,

religion, national origin, sex, ancestry, age or handicap of any

individual:

(a) To fail or refuse to hire or to discharge any

individual, or otherwise to discriminate against any individual

with respect to his compensation, terms, conditions, or

privileges of employment, because of such individual’s race,

color, religion, national origin, sex, ancestry, age or handicap;

(b) To limit, segregate, or classify his employees

or his employment applicants in any way which would

deprive or tend to deprive any individual of employment

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opportunities or otherwise adversely affect his status as an

employee, because of such individual’s race, color, religion,

national origin, sex, ancestry, age or handicap;

(2) Fora labor organization to exclude or to expel

from its membership any individual or to discriminate in any

way against any of its members or against any employer or

any individual employed by an employer because of race,

color, religion, national origin, sex, ancestry, age or handicap

of any individual; or to limit, segregate, or classify its

membership, or to classify or fail or refuse to refer for

employment any individual, in any way which would deprive

or tend to deprive any individual of employment

opportunities, or would limit such employment opportunities

or otherwise adversely affect his status as an employee or as

an applicant for employment, because of such individual’s

race, color, religion, national origin, sex, ancestry, age or

handicap; or for any employer, labor organization, or joint

labor-management committee controlling apprenticeship or

other training or retraining, including on the job training

programs to discriminate against any individual because of his

race, color, religion, national origin, sex, ancestry, age or

handicap in admission to, or employment in, any program

established to provide apprenticeship or other training;

(3) | For any employer or employment agency to

print or circulate or cause to be printed or circulated any

statement, advertisement or publication, or to use any form of

application for employment or to make any inquiry in

connection with prospective employment, which expresses,

directly or indirectly, any limitation, specification, | or

discrimination, because of race, color, religion, national

origin, sex, ancestry, age or handicap unless based upon a

bona fide occupational qualification or for an employment

agency to fail or refuse to refer for employment, or otherwise

to discriminate against, any individual because of his race,

color, religion, national origin, sex, ancestry, age as it relates

to employment or handicap, or to classify or refer for

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employment any individual on the basis of his race, color,

religion, national origin, sex, ancestry, age Or handicap.

z: Notwithstanding any other provision of this

chapter, it shall not be an unlawful employment practice for

an employer to apply different standards of compensation or

different terms, conditions or privileges of employment

pursuant to a bona fide seniority or merit system, or a system

which measures earnings by quantity or quality of production

or to employees who work in different locations, provided

that such differences or such systems are not the result of an

intention or a design to discriminate, and are not used to

discriminate, because of race, color, religion, sex, national

origin, ancestry, age or handicap, nor shall it be an unlawful

employment practice for an employer to give and to act upon

the results of any professionally developed ability test,

provided that such test, its administration, or action upon the

results thereof, is not designed, intended or used to

discriminate because of race, color, religion, national origin,

sex, ancestry, age or handicap.

3. Nothing contained in this chapter shall be

interpreted to require any employer, employment agency,

labor organization, or joint labor-management committee

subject to his chapter to grant preferential treatment to any

individual or to any group because of the race, color, religion,

national origin, sex, ancestry, age OF handicap of such

individual or group on account of an imbalance which may

exist with respect to the total number or percentage of

persons of any race, color, religion, national origin, sex,

ancestry, age or handicap employed by any employer, referred

or classified for employment by any employment agency or

labor organization, admitted to membership or classified by

any labor organization, or admitted to or employed in any

apprenticeship or other training program, in comparison with

the total number or percentage of persons of such race, color,

religion, national origin, sex, ancestry, age Or handicap in any

community, state, section, or other area, or in the available

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work force in any community, state, section, or other area.

213.075 Complaints to commissions, how filed,

when -- filing with federal agencies, effect -- duties of

executive director -- respondents -- hearing, notice,

procedure -- attorney general to represent commission --

appeal, discovery -- effect of orders of commission. --

1. Any person claiming to be aggrieved by an unlawful

discriminatory practice may make, sign and file with the

commission a verified complaint in writing, within one

hundred eighty days of the alleged act of discrimination,

which shall state the name and address of the person alleged

to have committed the unlawful discriminatory practice and

which shall set forth the particulars thereof and such other

information as may be required by the commission. The

complainant’s agent, attorney or the attorney general may, in

like manner, make, sign and file such complaint.

2. Any complaint which is filed with the federal

Equal Employment Opportunity Commission or other federal

agencies with which the commission has a work-sharing or

deferral agreement, or with a local commission which has

been certified as substantially equivalent by the commission,

shall be deemed filed with the commission on the date that

such complaint is received by such federal agency or local

commission. A copy of all complaints filed with a local

commission with the authority to enforce the provisions of

this chapter is to be forwarded to the commission within

seven days of the filing thereof with such local commission.

If a local commission has jurisdiction to hear a complaint

filed with the commission, such complaint shall be deemed to

have been filed with the local commission on the date on

which such complaint was filed with the commission. The

commission shall, within seven days of the receipt of a

complaint which a local commission has jurisdiction to hear,

forward a copy thereof to such local commission.

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3. After the filing of any complaint, the executive

director shall, with the assistance of the commission’s staff,

promptly investigate the complaint, and if the director

determines after the investigation that probable cause exists

for crediting the allegations of the complaint, the executive

director shall immediately endeavor to eliminate the unlawful

discriminatory practice complained of by conference,

conciliation and persuasion, and shall report the results to the

commission. The investigation, determination of probable

cause and conciliation shall be conducted according to such

rules, regulations and guidelines as the commission shall

prescribe.

4. A person who is not named as a respondent in

a complaint, but who is identified as a respondent in the

course of investigation, may be joined as an additional or

substitute respondent upon written notice, pursuant to such

rules, regulations, and guidelines a: the commission shall

prescribe. Such noiice, in addition to comp.,.ng with the

requirements of such rules, regulations, and guidelines, shall

also state the reason why the person to whom the notice is

addressed has been joined as a party.

5. In case of failure to eliminate such

discriminatory practice as found in the investigation, if in the

judgment of the chairperson of the commission circumstances

so warrant, there shall be issued and served in the name of

the commission, a written notice, together with a copy of the

complaint, as it may have been amended, requiring the person

named in the complaint, hereinafter referred to as

“respondent”, to answer the charges of the complaint at a

hearing, at a time and place to be specified in the notice,

before a panel of at least three members of the commission

sitting as the commission or before a hearing examiner

licensed to practice law in this state who shall be appointed

by the executive director an approved by the commission.

The place of the hearing shall be in the office of the

commission or such other place designated by it, except that

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if the respondent so requests, in writing, the hearing shall be

held in the county of such person’s residence or business

location at the time of the alleged unlawful discriminatory

practice. A copy of the notice shall also be served on the

complainants.

6. In all cases where a written notice of hearing

has been issued and a party has not elected the option to

proceed in circuit court as set forth in section 213.076, the

procedures set forth for a hearing shall apply.

7. The commission shall be a party to the action

and shall be represented before‘the panel or the hearing

examiner by the office of the attorney general or, when so

delegated by the attorney general, a staff attorney of the

commission. Neither the hearing examiner nor any member

of the panel shall have participated in the investigation of the

complaint. Evidence concerning endeavors at conciliation

shall be excluded.

8. The respondent may file a written verified

answer to the complaint and appear at the hearing in person

or otherwise with or without counsel, and submit testimony.

At the discretion of the hearing examiner or the panel, the

complainant may be allowed to intervene, thereby becoming

a party to the action with the right to present testimony in

person or by counsel, provided the complainant at all times

shall be treated as a party for the purpose of discovery and

the taking of depositions. The commission or complainant

intervenor shall have the power to reasonably and fairly

amend any complaint, and the respondent shall have like

power to amend any answer. The testimony taken at the

hearing shall be under oath and be transcribed.

9. In any contested case before the commission,

any party may take and use written interrogatories, requests

for production of documents and other materials, and requests

for admissions, and all other forms of discovery authorized by

rules of civil procedure in the same manner, upon, and under

the same conditions, and upon the same notice, as is or may

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hereafter be provided for with respect to the taking and using

of written interrogatories, requests for production of

documents and other materials, and requests for admissions,

and all other forms of discovery authorized by rules of civil

procedure in civil actions in the circuit court. The panel or

hearing examiner shall have the authority to impose sanctions

in the same manner as set forth in the rules of civil

procedure.

10. The hearing shall be conducted in the manner

provided by chapter 536, RSMo.

11. When the case is heard by a panel of the

commission, the chairperson of the commission shall select

the hearing panel and the presiding officer. The presiding

officer shall have full authority to call and examine witnesses,

admit or exclude evidence and rule upon all motions and

objections. The panel shall state its findings of fact and

conclusions of law, and if, upon all the evidence at the

hearing, the panel finds:

(1) That a respondent has engaged in an unlawful

discriminatory practice as defined in this chapter, the

commission shall issue and cause to be served on the

respondent an order requiring the respondent to cease and

desist from the unlawful discriminatory practice. The order

shall require the respondent to take such affirmative action,

as in the panel’s judgment will implement the purposes of

this chapter, including, but not limited to, payment of

backpay; hiring; reinstatement or upgrading; restoration to

membership in any respondent labor organization; the

extension of full, equal and unsegregated housing; the

extension of full, equal and unsegregated public

accommodations; extension of a commercial real estate loan

or other financial assistance; extension or restoration of

membership or participation in any multiple listing service or

other real estate service organization or facility; payment of

actual damages; and the submission of a report of the manner

of compliance;

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(2) | That a respondent has engaged or is about to

engage in a violation of section 213.040, 213.045, 213.050,

or 213.070, to the extent that the alleged violation of section

213.070 relates to or involves a violation of one or more of

such other sections or relates to or involves the encouraging,

aiding, or abetting of a violation of such other sections, the

commission may, in addition to the relief provided in

subdivision (1) of this subsection*, assess a civil penalty

against the respondent, for purposes of vindicating the public

interest:

(a) In an amount not exceeding two thousand

dollars if the respondent has not been adjudged to have

violated one or more of the sections enumerated in

subdivision (2) of this subsection within five years of the date

of the filing of the complaint;

(b) In an amount not exceeding five thousand

dollars if the respondent has been adjudged to have

committed one violation of the sections enumerated in

subdivision (2) of this subsection within five years of the date

on which the complaint is filed;

(c) In an amount not exceeding ten thousand

dollars if the respondent has been adjudged to have

committed two or more prior violations of the sections

enumerated in subdivision (2) of this subsection within seven

years of the date on which the complaint is filed. All civil

penalties set forth in this subsection shall be paid to the

human rights fund.

12. _ If, upon all the evidence, the panel finds that

a respondent has not engaged in any unlawful discriminatory

practice, the panel shall state its findings of fact and

conclusions of law and shall issue and cause to be served on

the complainant and respondent an order dismissing the

complaint. -

13. When the case is heard by a hearing examiner,

the examiner shall have all powers described in subdivision

(8) of section 213.030 and subsection 11 of this section, for

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the purpose of the hearing. The hearing examiner shall make

findings of fact and conclusions of law and shall recommend

to the commission an order granting such relief as provided

in subsection 11 of this section or dismissing the complaint

as to the respondent as provided in subsection 12 of this

section, in accordance with such findings.

14. A panel of at least three members of the

commission, sitting as the commission, shall review the

record, findings and recommended order of the hearing

examiner. The panel shall thereafter accept or amend the

recommended order which shall become the order of the

commission. All orders shall be served on the complainant

and respondent, and copies shall be delivered to the attorney

general and such other public officers as the commission

deems proper.

15. No order of the commission issued pursuant to

this section shall affect any contract, sale, encumbrance or

lease consummated before the issuance of such order and

involving a bona find purchaser without actual notice of the

charge filed pursuant to this section.

16. | Any person aggrieved by an order of the

commission may aj:peal as provided in chapter 536, RSMo.

*Word “section” appears in original rolls.

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2. Title 9 of the United States Code provides:

§ 1. "Maritime transactions" and "commerce"

defined; exceptions to operation of title

"Maritime transactions", as herein defined, means

charter parties, bills of lading of water carriers, agreements

relating to wharfage, supplies furnished vessels or repairs to

vessels, collisions, or any other matters in foreign commerce

which, if the subject of controversy, would be embraced

within admiralty jurisdiction; "commerce", as herein defined,

means commerce among the several States or with foreign

nations, or in any Territory of the United States or in the

District of Columbia, or between any such Territory and

another, or between any such Territory and any State or

foreign nation, or between the District of Columbia and any

State or Territory or foreign nation, but nothing herein

contained shall apply to contracts of employment of seamen,

railroad employees, or any other class of workers engaged in

foreign or interstate commerce.

§ 2. Validity, irrevocability, and enforcement of

agreements to arbitrate

A written provision in any maritime transaction or a

contract evidencing a transaction involving commerce to settle

by arbitration a controversy thereafter arising out of such

contract or transaction, or the refusal to perform the whole or

any part thereof, or an agreement in writing to submit to

arbitration an existing controversy arising out of such a

contract, transaction, or refusal, shall be valid, irrevocable,

and enforceable, save upon such grounds as exist at law or in

equity for the revocation of any contract.

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United States Court of Appeals

! FOR THE EIGHTH CIRCUIT

No. 99-2635

Merrill Lynch, Pierce, Fenner

and Smith, Inc., a Delaware

Corporation,

Appellee,

Appeal from the United States

District Court for the Western

District of Missouri

Vs

Jeremiah W. Nixon, Attorney

General, State of Missouri;

Keith D. Halcomb,

Assistant Attorney General,

State of Missouri;

: Missouri Commission on

‘ Human Rights; Gerald

P. Gretman, Chairperson,

Missouri Commission

on Human Rights;

Donna Cavitts,

Executive Director, Missouri

Commission on Human Rights

Geraldine Johnson,

Commissioner; Sterling Adams,

Commissioner, and Nancy

Reynolds, Presiding

Commissioner,

* * *£ &# &# &# &# # # H He He He He HH He He HH He He He He HHH

Appellants.

Submitted: February 18, 2000

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Filed: April 24, 2000

Before WOLLMAN, Chief Judge, and BOWMAN

and MORRIS SHEPPARD ARNOLD, Circuit Judges.

MORRIS SHEPPARD ARNOLD, Circuit Judge

When Merrill Lynch, Pierce, Fenner and Smith, Inc.

(Merrill Lynch), filed a complaint seeking an order enjoining

the Missouri Commission on Human Rights and certain state

officers (collectively in this opinion, MCHR, unless otherwise

noted) from proceeding in an administrative action with

discrimination claims against Merrill lynch, the district court

issued an order limiting the forms of relief that the MCHR

could seek from Merrill Lynch in the administrative action.

The MCHR appeals from this order and we affirm in part and

vacate in part.

When Anthony Hoskins was terminated from his

employment as a stockbroker with Merrill Lynch, he

submitted several claims to arbitration, asserting among other

things that his termination violated Title VII of the Civil

Rights Act of 1964, see 42 U.S.C. § 2000e through §2000e-

17, and the Missouri Human Rights Act, see Mo. Rev. Stat.

§§213.010-213.137. The submission of his claims to

arbitration was pursuant to an employment contract known as

a “Form U-4,” which Mr. Hoskins signed at the

commencement of his employment with Merrill Lynch, and

that provides that the ernployee must submit certain

employment-related disputes to arbitration. The arbitrator

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ultimately found against Mr. Hoskins and dismissed his

claims with prejudice. _

While Mr. Hoskins’s dispute was pending in

arbitration, he filed an administrative complaint with the

MCHR. Some time after the arbitrator found against Mr.

Hoskins, the MCHR initiated an administrative action against

Merrill Lynch, contending that Merrill Lynch had violated

rights guaranteed to Mr. Hoskins under Missouri law. Merrill

Lynch then filed this complaint in federal court, seeking to

enjoin the MCHR from proceeding with its administrative

action. Merrill Lynch argued that, in light of the arbitrator’s

decision to dismiss Mr. Hoskins’s claims with prejudice, the

Federal Arbitration Act, see 9 U.S.C. §§ 1-16, precluded the

MCHR from bringing its administrative action against Merrill

Lynch. The district court enjoined the MCHR from seeking

monetary relief on behalf of Mr. Hoskins in its administrative

action but refused to enjoin it from seeking injunctive relief

on his behalf in that action.

Il.

The MCHR first argues that the district court

incorrectly found that Merrill Lynch’s complaint presented a

federal question. The MCHR points out that its

administrative action against Merrill Lynch is based only on

state law, and argues that under the well-pleaded complaint

rule federal-question jurisdiction exists only if “a federal

question is presented on the face of the plaintiff's properly

pleaded complaint.” Caterpillar, Inc. v. Williams, 482 U.S.

386, 392 (1987). The MCHR contends that since the Federal

Arbitration Act provides Merrill Lynch with, at most, a

federal defense to state-law claims, no basis exists for federal-

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question jurisdiction. See Franchise Tax Board v.

Construction Laborers Vacation Trust, 463 U.S. 1, 14, 18-19

(1983).

The MCHR’s argument is off the mark, however,

because “[i]t is beyond dispute that federal courts have

jurisdiction over suits to enjoin state officials from interfering

with federal nghts.” Shaw v. Delta Air Lines, Inc., 463 U.S.

85, 96 n.14 (1983). It seems to us that the key questions are

whether the federal! arbitration statutes create some federal

right for Merrill Lynch, and whether the actions of the

MCHR in this case would interfere with that right. We

believe that the answer to both questions is yes. The statutes

specifically provide that arbitration agreements will be

“enforceable,” see 9 U.S.C. § 2, and, for reasons that we

discuss in greater detail in the next sections, we think that the

efforts of the MCHR to proceed with its administrative claims

would interfere with this right. Given the language in Shaw,

463 U.S. at 96 n.14, therefore, we hold that Merrill Lynch’s

complaint properly presents a federal question and that the

district court had subject-matter jur sdiction to hear it. See

also Fleet Bank, National Association v. Burke, 160 F.3d

883, 887-88 (2nd Cir. 1998), cert. denied, 119 S. Ct. 2340

(1999).

The MCHR advances three arguments in support of its

contention that the arbitrator’s ruling against Mr. Hoskins

does not bar the MCHR from proceeding with its

administrative action against Merrill Lynch. The MCHR

argues, first, that an arbitration clause cannot preclude Mr.

Hoskins from asserting his statutory rights, and therefore

could not preclude the MCHR from asserting Mr. Hoskins’s

statutory rights on his behalf. Second, the MCHR maintains

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that even if Mr. Hoskins himself is precluded from asserting

his statutory rights, the MCHR is not. Finally, the MCHR

asserts that even if an arbitration clause could bar both Mr.

Hoskins and the MCHR from asserting Mr. ~Hoskins’s

Statutory rights, the arbitration clause in this case does not do

so. We address each of these arguments in turn.

Ill.

The MCHR argues that even if an employee is

required to arbitrate claims under an arbitration agreement,

that does not preclude the employee from later raising the

same claims in court. We disagree. We have specifically

held that an arbitrator's award constitutes a final judgment for

the purposes of collateral estoppel and res judicata. See Val-

U Construction Co. v. Rosebud Sioux Tribe, 146 F.3d 573,

581-82 (8th Cir. 1998). In this case, Mr. Hoskins had a full

and fair opportunity to litigate his statutory claims in an

arbitral forum, he did so, and he lost. Under both federal and

Missouri law, the principles of res judicata and collateral

estoppel bar Mr. Hoskins from subsequently relitigating these

same claims, see id. at 582 and Hoelscher v. Patton, 842

S.W.2d 127, 128 (Mo. Ct. App. 1992).

The MCHR also suggests that even if the arbitrator’s

decision would ordinarily have a preclusive effect, it does not

when a statutory right, and in particular a right under Title

VII, is the subject of the arbitration. The MCHR directs our

attention to Alexander v. Gardner-Denver Co., 415 U.S. 36,

43, 49 (1974), in which a plaintiff who lost an arbitration

hearing subsequently filed a complaint under Title VII. The

Alexander Court denied any preclusive effect to the

_arbitrator’s decision on the ground that the arbitrator was

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ruling only on the plaintiff's “contractual rights” under a

collective bargaining agreement, id. at 53-54, and not on the

plaintiff's “statutory right(s]” under Title VII, id. 52-53, 56.

In our case, however, Mr. Hoskins’s statutory rights were

submitted to arbitration, and there is nothing in Alexander

that would indicate that the arbitrator’s decision should not be

given its normal preclusive effect.

The language of § 118 of the Civil Rights Act of

1991, Pub. L. No. 102-166, § 118, 105 Stat. 1071, 1081

(1991), confirms our view of the matter, for it says that,

“(w]here appropriate and to the extent authorized by law, the

use of alternative means of dispute resolution, including . . .

arbitration, is encouraged to resolve disputes arising under

[Title VII].”. We are aware that the House Judiciary

Committee notes relevant to § 118 state that the committee

did not intend for “the inclusion of [§ 118] . . . to preclude

rights and remedies that would otherwise be available [under

Title VII].” H.R. Rep. No. 102-40(II), at 80 (1991). This

statement, however, is ambiguous, for it might simply mean

that the House of Representatives did not intend to make

arbitration the sole means of vindicating the rights created by

Title VII.

We agree with Merrill Lynch, moreover, that the

utility of arbitration would be drastically reduced if an

employee were free to relitigate an arbitrated Title VII claim

in federal court. We do not see how Congress’s explicit

endorsement of arbitration can reasonably be read to include

a denial of the primary benefit of arbitration, namely, a cost-

effective and binding resolution to the dispute. Since we find

that the plain language of § 118 at the very least supports the

binding and preclusive nature of an arbitrator's award, we

DL HE PELLET IIE ES LISLE POO» PRI pees ee an

A-2]

decline to allow wholly ambiguous legislative history to

undermine its apparent meaning. See Citicasters y.

McCaskill, 89 F.3d 1350, 1354 (8th Cir. 1996).

IV.

The MCHR argues that even if Mr. Hoskins is barred

from personally reasserting his arbitrated claims in court, the

MCHR is not precluded from proceeding with its

administrative action against Merrill Lynch on the basis of

Mr. Hoskins’s claims. The MCHR contends that the lack of

identity and the lack of common interests between the MCHR

and Mr. Hoskins prevent the ordinary principles of res

judicata and collateral estoppel from binding the MCHR.

We recognize that there is some tension between, on

the one hand, the interest in enforceable arbitration

agreements and, on the other hand, the interest in independent

enforcement of anti-discrimination laws on behalf of the

public by agencies such as the MCHR. We agree, however,

with the approach to this difficulty that was taken in Equal

Employment Opportunity Commission v. Kidder, Peabody and

Company, Inc., 156 F.3d 298, 302 (2nd Cir. 1998), which

held that in circumstances similar to ours, an arbitration

agreement precludes the EEOC from seeking purely monetary

relief for an employee but does not preclude it from seeking

injunctive relief.

A claim for monetary relief such as back pay is highly

individual in nature, and we thus conclude that when the

MCHR seeks such an award, the MCHR acts more as a

representative for Mr. Hoskins than as a separate entity

seeking to vindicate public rights. See Kidder, Peabody, 156

A-22

F.3d at 301-02. If the MCHR were seeking injunctive relief

for a broad class of employees, on the other hand, its efforts

would presumably be aimed at a pattern of ongoing

discrimination, and would involve a matter of greater public

interest. See Equal Employment Opportunity Commission v.

Waffle House, Inc., 193 F.3d 805, 812 (4th Cir. 1999)

(“[a]lthough the [administrative agency] acts in the public

interest, even when enforcing only the charging party’s claim,

. . the public interest aspect of such a claim is less

significant than an [administrative agency] suit seeking large-

scale injunctive relief to attack discrimination more

generally”).

We recognize that monetary penalties are an important

component of the enforcement mechanism of the Missouri

Human Rights Act. We emphasize, however, that the

arbitration clause in this case does not undermine these

statutory penalties: Mr. Hoskins was free to assert all of his

statutory claims before the arbitrator, and indeed he did.

Under these circumstances, the Supreme Court has found that

arbitration is as effective a deterrent, and as effective a

method of assérting individual rights, as a judicial proceeding.

See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28

(1991), quoting Mitsubishi Motors Corp. v. Soler Chrysler-

Plymouth, Inc., 473 U.S. 614, 637 (1985) (“‘so long as the

prospective litigant effectively may vindicate [his or her]

statutory cause of action in the arbitral forum, the statute will

continue to serve both its remedial and deterrent function”).

V.

The MCHR argues finally that even if both it and Mr.

Hoskins could be precluded by a proper agreement to

ce eanel ou. igheekande, 6k AMO Sawin sale Cae ak ty whore -

A-23

arbitrate, the agreement in this case was not in fact an

“appropriate” agreement, as required by §118. The MCHR

refers us to a case that held that although Title VII claims

could properly be the subject of an arbitration agreement,

Form U-4 did not properly inform the employee that she

would be required to arbitrate claims arising out of her

employment. See Rosenberg v. Merrill Lynch, Pierce,

Fenner and Smith, Inc., 170 F.3d 1, 19-20 (1st Cir. 1999).

We do not see how Rosenberg is relevant to our case,

however, as Mr. Hoskins submitted his claim to arbitration

and pursued it to a resolution. Having already submitted his

claim to arbitration, Mr. Hoskins may not now assert that he

was not properly apprised of the scope of the arbitration

clause in his employment contract. See Kiernan v. Piper

Jaffray Companies, Inc., 137 F.3d 588, 594 (8th Cir. 1998).

The issue in our case is not whether Mr. Hoskins could be

required to arbitrate his claim (he did so voluntarily) but

rather what preclusive effect should be applied to the MCHR

as a result of that arbitration. Rosenberg never addresses that

question. 3

VI.

The district court enjoined the “defendants” from

seeking individual monetary remedies on behalf of Mr.

Hoskins. The MCHR is only one of the named defendants

but argues that it is entitled to immunity under the eleventh

amendment because it is a state agency. We agree.

State agencies acting as “arms” of the state are treated

as though they were the state itself, and receive the full

immunity from suit described in the eleventh amendment.

See Puerto Rico Aqueduct and Sewer Authority v. Metcalf

A-24

and Eddy, Inc., 506 U.S. 139, 144 (1993); see also Regents

of the University of California v. Doe, 519 U.S. 425, 429-30

(1997). Once the immunity is found to apply, it may be

overcome only by a wavier of the immunity by the state, see

Puerto Rico Aqueduct, 506 U.S. at 144, or, in certain

situations, an abrogation of the immunity by Congress. See

Kimel v. Florida Board of Regents, 120 S. Ct. 631, 640

(2000).

In this case, Merrill Lynch does not dispute the

MCHR’s contention that it is an arm of the state for eleventh

amendment purposes, nor does Mermill Lynch suggest that the

state’s immunity has somehow been waived or abrogated.

Indeed, we note that Merrill Lynch admitted in the district

court that the eleventh amendment bars an award of

injunctive relief against the MCHR. The discussion of

eleventh amendment immunity in the district court’s order,

however, focused on the propriety of the suit against the

individual officers of the MCHR, and never considered the

question of whether the MCHR itself was entitled to

immunity.

As there is no dispute that the MCHR, as a state

agency, is an arm of the state within the meaning of the

eleventh amendment, and no indication that either of the

exceptions to eleventh amendment immunity applies, we hold

that the MCHR is entitled to immunity and should have been

dismissed from the suit.

Vil.

Despite the fact that it did not file a notice of cross-

appeal in this case, Merrill Lynch asks us to modify the

e

5

5

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4

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A-25

district court’s order to enjoin the remaining defendants from

seeking any individual injunctive relief for Mr. Hoskins. In

Benson v. Armontrout, 767 F.2d 454, 455 (8th Cir. 1985),

however, we held that “an appellee that has not filed a cross-

appeal . . . may not obtain from us relief more extensive than

it received in the District Court.” We therefore decline to

consider Merrill Lynch’s proposed modification of the

injunction entered below.

VII.

For the reasons indicated, we affirm the district court’s

order in part. We vacate the injunction with respect to the

MCHR and direct the district court to dismiss the MCHR

from the suit. The case is remanded to the district court for

proceedings not inconsistent with this opinion.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

PSR EAI 2A 1B INL PI IRANI Ts ES ort

A-26

IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF MISSOURI

WESTERN DIVISION

JUDGMENT IN A CIVIL CASE

Mermll Lynch, Pierce, Fenner

& Smith, Inc.

Plaintiff(s),

VS. Civil No. 98-1168-CV-W-1

)

)

)

)

)

Jeremiah W. Nixon, et al. )

)

Defendant(s). )

)

)

Jury Verdict. This action~ came

before the Court for a trial by jury.

The issues have been tried and the jury

has rendered its verdict. :

Decision by Court. This action came

to trial or hearing before the Court.

The issues have been tried or heard

and a decision has been rendered.

X Decision by Court. This action has

come before the Court as a briefed

matter and a decision has _ been

rendered.

ORDERED that Piaintiff's motion for temporary

restraining order, preliminary injunction and other injunctive

SERRATE HITS pega pam ag mer eNN Lem tt Oey pL Lhe Laide Musk kere im

AP REEOPy ARE ANY

POMP ate

PERRET P LI NORAD SAIS DERI el RS a RS eR pias

A-27

relief (doc. #9) is granted to the extent that it seeks to enjoin

the defendant from pursuing monetary damages and denied to

the extent that it seeks to enjoin the defendant from pursuing

injunctive relief. (2) Defendants’ motion to dismiss (doc. #8)

is denied; (3) Defendants’ are enjoined from pursuing Case

No. E-7/94-12670 or any like claim for individual monetary

remedies on behalf of Anthony Hoskins against Merrill Lynch

for alleged race discrimination.

May 7, 1999 ROBERT F. CONNOR, CLERK

Date By: /s/ Y. Johnson ~

Deputy Clerk

Entered on May 10, 1999

A-28

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF MISSOURI

WESTERN DIVISION

MERRILL LYNCH,

PIERCE, FENNER &

SMITH, INC.,

a Delaware Corporation

Plaintiff,

Vv. Case No. 98-1168-CV-W-8-1

JEREMIAH W. NIXON,

et al.,

)

)

)

)

)

)

)

)

)

)

)

)

)

Defendants.

ORDER GRANTING IN PART MOTION

FOR INJUNCTIVE RELIEF AND

DENYING MOTION TO DISMISS

Plaintiff brings this action to enjoin proceedings before

the Missouri Commission on Human Rights against it for

alleged employment discrimination. Before the Court ‘s

(1) plaintiffs motion for temporary restraining order,

preliminary injunction and other injunctive relief and (2)

defendant’s motion to dismiss. For reasons stated below,

plaintiff's motion for temporary restraining order, preliminary

injunction and other injunctive relief is granted to the extent

that it seeks to enjoin the defendant from pursuing monetary

damages and denied to the extent that it seeks to enjoin the

defendant from pursuing injunctive relief. Defendant’s

motion to dismiss is denied.

eases te la asd eas Abn AN Asna AA, SIRSAL ihe cd ease as aoe Me Te

A-29

I.

Factual Background

Anthony Hoskins (“Hoskins”) was terminated from his

position as a financial analyst with plaintiff Merrill Lynch,

Pierce, Fenner & Smith, Inc. (“Merrill Lynch”) on January

13, 1994. Complaint § 15. Five days later, he filed a

Statement of Claim against Merrill Lynch with the National

Association of Securities Dealers, Inc. (“NASD”) alleging in

his Amended Statement of Claim that he was terminated

because of his race in violation of Title VII and the Missouri

Human Rights Act. Complaint § 17-18. An NASD

arbitration panel held hearings on Hoskins’ claims and on

January 12, 1995, issued an award dismissing Hoskins’ claims

with prejudice. Complaint Ex. D.

While the arbitration award was pending, Hoskins

filed a charge of discrimination with the Missouri

Commission on Human Rights (“MCHR”) alleging that he

had been discharged by Merrill Lynch because of his race.

Complaint Ex. C. The MCHR investigated Hoskins’

allegations and on September 24, 1996, issued a Finding of

Probable Cause thereby determining that probable cause

existed to charge Merrill Lynch with terminating Hoskins

because of his race. Complaint Ex. E. The Finding of

Probable Cause ordered the Executive Director to

“immediately endeavor to eliminate the unlawful

discriminatory practice complained of by conference,

conciliation, and persuasion.” Complaint Ex. E.

On July 8, 1997, the MCHR, through its attorneys Jay

Nixon and Keith Halcomb, advised Merrill Lynch that it

i dann

a ee

A-30

intended to hold a public hearing on Hoskins’ claims and

filed a complaint with the MCHR. In its amended complaint

+he MCHR sought an order directing Merrill Lynch to cease

discriminating against Hoskins and pay him damages.

Complaint Ex. F. In response, Merrill Lynch filed a motion

to dismiss arguing that (1) because there had been a full and

fair arbitration of Hoskins’ claims, the Missouri Human

Rights Act would be unconstitutional if applied against

Merrill Lynch; (2) the action against Merrill Lynch was in

violation of 42 U.S.C. § 1983 in that it would deprive Merrill

Lynch of its federally protected rights pursuant to the Federal

Arbitration Act; and (3) the MCHR’s pursuit of an action

after full resolution by an arbitration panel was in violation

of the common law doctrine of claim preclusion and the

Federal Arbitration Act. Complaint Ex. G.

On April 27, 1998, MCHR Hearing Examiner Cynthia

A. Quetsch issued her Findings of Facts, Conclusions of Law,

and Recommended Decision in which she recommended that

Merrill Lynch’s motion to dismiss be granted. Complaint Ex.

I. Despite Quetsch’s recommendation, Merrill Lynch’s

motion to dismiss was denied by the MCHR. Complaint Ex.

J. Thereafter, the MCHR appointed a second Hearing

Examiner, John Altergott, and notified Merrill Lynch that it

intended to proceed with Hoskins’ claims. Complaint Ex. K.

The parties were ordered to engage in discovery and a

hearing is currently set for July 20, 1999. Complaint Ex. L.

Merrill Lynch has filed a complaint in this Court

seeking an Order enjoining the proceedings before the MCHR

and for preliminary and permanent injunctions enjoining

defendants from the further pursuit of claims against Merrill

Lynch for individual remedies on behalf of Hoskins. Merrill

A-31

Lynch also seeks monetary damages.

II.

Discussion

The MCHR submits four arguments opposing Merrill

Lynch's motion for injunctive relief. First, the MCHR argues

that under the “well-pleaded complaint” rule this Court does

not have subject matter jurisdiction to hear Merrill Lynch’s

claims. Second, the MCHR argues that even if this Court has

jurisdiction, Merrill Lynch has failed to meet the elements

necessary for injunctive relief. Third, the MCHR argues that

this Court should abstain from interfering with an ongoing

State court proceeding. Fourth, the MCHR argues Merrill

Lynch’s claims must be dismissed under the Eleventh

Amendment. The Court will address each argument.

A. Well-Pleaded Complaint Rule

When jurisdiction is based on a federal question, the

“well-pleaded complaint” rule requires that the “federal

question is presented on the face of the plaintiff's properly

pleaded complaint.” Caterpillar, Inc. v. Williams, 482 U.S.

386, 392 (1987). Jurisdiction cannot be created by the

assertion of a federal defense. See Franchise Tax Bd., 463

U.S. at 14. In declaratory judgments, a complaint is to be

tested for federal jurisdiction as if the party whose adverse

action the declaratory judgment plaintiff apprehends had

initiated a lawsuit against the declaratory judgment plaintiff.

See Public Service Commission v. Wycoff Co., 344 U.S. 237,

248 (1952). Thus, if the underlying action is one based on

state law, the well-pleaded complaint rule is a barrier to

A-32

federal jurisdiction even though the complaint seeking

declaratory relief is based on federal law. This is not true,

however, when the plaintiff is also seeking injunctive relief.

See Shaw v. Delta Air Lines, Inc. , 463 U.S. 85 (1983).

In Shaw, the Supreme Court sustained federal court

jurisdiction over a lawsuit in which the plaintiff sought both

declaratory and injunctive relief. Although the underlying

action was based on state law (whether Delta Airlines violated

the New York Human Rights Law by not providing benefits

to employees disabled by pregnancy), the Court found that it

had jurisdiction to determine whether the New York Human

Rights Law was preempted by ERISA.

Although the Court was addressing a preemption issue,

it did not rely on the “complete preemption” exception to the

well-pleaded complaint rule to establish jurisdiction. Under

the “complete preemption” exception, once an area of state

law has been completely pre-empted, any claim purportedly

based on that pre-empted state law is considered, from its

inception, a federal claim, and therefore arises under federal

law. See Schuver v. Mid American En o., 154 F.3d

795, 798 (8th Cir. 1998). Instead, the Supreme Court found

that federal jurisdiction existed because plaintiffs were

seeking injunctive relief:

It is beyond dispute that federal courts have

jurisdiction over suits to enjoin state officials

from interfering with federal rights. See Ex

parte Young, 209 U.S. 123, 160-62, 28 S.Ct.

441, 52 Led. 714 (1908). A plaintiff who

seeks injunctive relief from state regulation, on

the ground that such regulation is pre-empted

by a federal statute which, by virtue of the

A-33

Supremacy Clause of the Constitution, must

prevail, thus presents a federal question which

the federal courts have jurisdiction under 28

U.S.C. § 1331 to resolve.

Shaw, 463 U.S. at 96 n. 14 (citations omitted). See

Fleet Bank, National Assoc. v. Burke, 160 F.3d 883, 888

(2nd Cir. 1998) ("[t]he Supreme Court explicitly upheld

subject matter jurisdiction in Shaw on .. . the fact that

plaintiffs were seeking injunctive relief to prevent state

officials from interfering with a federal right.”)

As in Shaw, Merrill Lynch is seeking to enjoin a state

agency from encroaching on its rights as provided by the

Federal Arbitration Act. Thus, pursuant to Shaw, the well-

pleaded complaint rule does not deprive this Court of federal

jurisdiction.

B. Injunctive Relief

The MCHR next argues that injunctive relief is not

appropriate in this case. Injunctive relief is appropriate if (1)

the plaintiff has a reasonable probability of success on the

merits; (2) the plaintiff will be irreparably injured if relief is

not granted; (3) the potential harm to the plaintiff outweighs

any perceived harm to the defendants; and (4) the injunction

will not harm the public interest. Dataphase Systems, Inc. v.

CL Systems, Inc., 640 F.2d 109 (8th Cir. 1981).

Whether injunctive relief is appropriate in this case

turns on the legal question of whether an arbitration

agreement between an employer and employee precludes the

MCHR from seeking relief for the employee under the

Missouri Human Rights Act. Neither party has submitted a

case directly on point, nor has the Court located one.

However, the Court finds the Second Circuit’s reasoning in

A-34

EEOC vy. Kidder, Peabody, & Co., Inc., 156 F.3d 298 (2nd

Cir. 1998) to be persuasive.

In Kidder, the EEOC sought back pay and liquidated

damages for alleged age discrimination on behalf of nine

former Kidder employees despite that the employees had

agreed to submit any claims arising out of their employment

with Kidder to binding arbitration. The Court held that the

arbitration agreement precluded the EEOC from seeking

monetary relief on behalf of the employees under the ADEA,

but that the EEOC could seek injunctive relief.

In reaching its decision, the Second Circuit relied

upon the Supreme Court’s holding in Gilmer ev.

Interstate/Johnson Lane Corp., 500 U.S. 20 (1991). In

Gilmer, the United States Supreme Court held that the age

discrimination claims of a registered securities representative

brought under the ADEA were subject to arbitration in

accordance with the registration application the representative

submitted to the New York Stock Exchange. The Supreme

Court found there was not language in the ADEA that

~ evidenced an intention to preclude arbitration of

discrimination claims. Accordingly, the Court concluded that

discrimination claims brought under the ADEA could be

resolved via binding arbitration. In addressing the effect of

its holding on the EEOC, the Supreme Court stated that

“arbitration agreements will not preclude the EEOC from

bringing actions seeking class-wide or equitable relief.”

Drawing from the holding in Gilmer, the Second

Circuit discussed the relationship between an employee’s right

to pursue an action under the ADEA and the EEOC’s pursuit

of a separate action raising the employee’s claims. Kidder,

156 F.3d at 302. The Second Circuit recognized that the

EEOC’s right of action is separate from the employee’s

action. But, that the EEOC does not significantly combat

A-35

discrimination by seeking individual monetary relief when an

individual has freely contracted to arbitrate his or her

discrimination claim. Id. When seeking injunctive relief,

however, the EEOC not only protects individual rights, but

also the rights of all United States citizens. Id. (citing EEOC

mo ace Corp., 813 F.2d 1539 (9th Cir.

1987)). The Second Circuit thus concluded that the EEOC

could not seek monetary relief but could seek injunctive

relief. Because the EEOC was only seeking monetary relief,

the case was dismissed.

Neither Gilmer nor Kidder are directly on point to the

resolution of the matter currently before the Court. The

decisions of other Eighth Circuit cases, however, make it

clear that Merrill Lynch’s motion for injunctive relief should

be granted to the extent it seeks to enjoin the EEOC from

seeking monetary relief. First, although Gilmer involved an

ADEA claim, it has been held to apply with equal force to

Title VII claims. Patterson v. Tenet Healthcare, Inc., 113

F.3d 832, 837 (8th Cir. 1997) (holding that under Gilmer

Title VII claims are subject to individual consensual

agreements to arbitrate). Second, although Kidder involves

EEOC proceedings, its reasoning is equally persuasive to

MCHR proceedings. See id. (stating that because state anti-

discrimination laws that parallel Title VII are explicitly made

a part of Title VII’s enforcement scheme, the FAA has the

same application to claims under the Missouri Human Rights

Act (MHRA) as to claims under Title VII). See also Finley

v. Empiregas, Inc. of Potosi, 975 F.2d 467 (8th Cir. 1992)

(“Our analysis is the same for both the state and federal

claims because decisions under the various federal

employment discrimination statutes are applicable and

authoritative under the Missouri Human Rights Act as well as

federal law.”).

In light of the Supreme Court’s opinion in Gilmer and

A-36

the Second Circuit’s analysis in Kidder, this Court holds that

Merrill Lynch’s motion for temporary restraining order,

preliminary injunction and other injunctive relief will be

granted to the extent that it seeks to enjoin the defendant

from pursuing monetary damages and will be denied to the

extent that it seeks to enjoin the defendant from pursuing

injunctive relief.

C. Abstention

Lastly, the Commission argues that the Court should

abstain from granting the relief sought by Merrill Lynch

because the state would otherwise be denied its right to

interpret and enforce Missouri law. Under the line of cases

stemming from Younger v. Harris, 401 U.S. 37 (1971), a

federal court should not enjoin pending state proceedings

where three elements are present: (1) the ongoing state

proceedings are “judicial” in nature; (2) the proceedings

implicate important state interests; and (3) the proceedings

afford an adequate opportunity to raise the federal claims.

See Middlesex County Ethics Committee, 457 U.S. 423

(1982).

All three elements required for abstention under the

Younger doctrine are met in this case. First, an

administrative proceeding, as the one before the MCHR, is

“judicial” in nature for purposes of the Younger doctrine.

Middlesex County Ethics Committee, 457 U.S. 423 (1982)

(applying Younger to administrative proceedings). Second,

the state undoubtedly has an interest in protecting its citizens

from race discrimination. Third, it is sufficient for Younger

purposes “that constitutional claims may be raised in state-

court judicial review of the administrative proceeding.” Night

Clubs Inc. v. City of Fort Smith, Arkansas, 163 F.3d 475,

480 (8th Cir. 1998) (citing Ohio Civil Rights Comm’n v.

Dayton Christian Schools, Inc., 477 U.S. 619, 629 (1986)).

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A-37

Nonetheless, even if all three elements are met, a

federal court should not abstain if it detects ‘some

extraordinary circumstance that would make abstention

inappropriate.” Id. at 479. For instance, when an injunction

is necessary to prevent great and immediate irreparable injury,

a federal court is justified in enjoining a state court

proceeding. Ohio Civil Rights Commission v. Dayton

hristian Schools, 477 U.S. 619 (1986). A federal court may

also interfere with a pending state court proceeding when a

federal forum is necessary to redress an alleged deprivation

of federal rights. Wooley v. Maynard, 430 U.S. 705, 710

(1977). Lastly, an exception to the Younger doctrine has

been found to exist when a “state agency is engaged in a

course of action openly inconsistent with a litigant’s rights

under Section 2 of the FAA...” . Olde Discount Corp. v.

Tupman, | F.3d 202, 214 (3rd Cir. 1993).

Relying upon the Third Circuit’s opinion in Olde

Discount, this Court finds that the MCHR is engaged in a

course of action openly“inconsistent with Merrill Lynch’s

nights under the FAA. If forced to litigate its claim in front

of the MCHR, Merrill Lynch will be irreparably harmed in

that it will be deprived access to the forum that it and

Hoskins contractually chose to resolve their dispute.

Accordingly, the Court will not abstain from interfering with

the administrative proceeding in this case.

D. Eleventh Amendment

Merrill Lynch concedes that it is barred by the

Eleventh Amendment from recovering monetary damages

against the MCHR. However, the MCHR insists that the

Eleventh Amendment mandates its dismissal from this suit

entirely. Contrary to the MCHR’s allegations, under Ex parte

Young, 209 U.S. 123 (1908), a suit for injunctive relief

against a state official may go forward, notwithstanding the

A-38 ,

Eleventh Amendment’s jurisdictional bar, where as here. the

suit seeks to end a continuing federal law violation.

Ill.

Accordingly, it is ORDERED that

(1) Plaintiff's motion for temporary restraining

order, preliminary injunction and other injunctive relief (doc.

#9) is granted to the extent that it seeks to enjoin the

defendant from pursuing monetary damages and denied to the

extent that it seeks to enjoin the defendant from pursuing

injunctive relief.

(2) Defendants’ motion to dismiss (doc. #8) is

denied;

(3) Defendants are enjoined from pursuing Case

No. E-7/94-12670 or any like claim for individual monetary

remedies on behalf of Anthony Hoskins against Merrill Lynch

for alleged race discrimination.

/s/ Dean Whipple

DEAN WHIPPLE

UNITED STATES DISTRICT JUDGE

DATE: May 6, 1999

Kansas City, Missouri