stockbrokers when they move from one brokerage house to the other that's different than most employees who go from one job to the other they take with them generally if they've been in the business any length of time a considerable asset their book of business upon which all brokerage firms rely and exist so that book that they develop that one firm becomes very attractive if you will to other firms and it is the lifeblood of the broker what happened in this case is that mr moore left merrill lynch on a friday afternoon which is the normal course of things and started working at dain rauscher the next monday on that same monday merrill lynch filed a complaint in evidentiary hearing and a preliminary or temporary injunction was issued preventing this or more from contacting any of his clients that was predicated upon a restrictive covenant agreement that was signed by mr moore some proximately two weeks after he began his employment at merrill lynch and the crux of the case that mr moore brought against merrill lynch and in its counter claim before the any as the was this when he was recruited by merrill lynch back in one thousand nine hundred ninety four he was given a when he started he was given a contract of employment and a promis note which he signed around the twenty ninth of april one thousand nine hundred four with no mention whatsoever that when he began his employ with merrill lynch that he would be required to relinquish his book of business and what happens is they go from one brokerage firm to the next and on the day that they leave letters goes out letters go out to their clients urging them to come over to the new firm so he's not informed that he's going to have to sign this agreement that  there those books the book of business becomes merrill lynch's week and a half after he's there he's can he's presented with this agreement and the agreement essentially says you eat you have thirty days to consider this if you fail to sign this agreement which essentially says you can't contact any of your clients that you've brought over for a year if you leave merrill lynch under any circumstances whether you quit or are fired you don't have a job here anymore we would you're telling us or the merits of your age your case that was tried before our creation panel it was tried before an arbitrator for your story and like they did they didn't get to hear my story and that's the problem because we brought  well the problem is that in order for me to prove my claim which they allowed me to bring before them i need to destroy a pattern and practice i need to do some discovery and they per they refused to permit me to do discovery as to the policy  merrill lynch with respect to this restrictive covenant agreement which was a former agreement which was used around the country they i had i had asked for that discovery the panel said no all you can show is what happened to mr moore well under arizona law i can't prove the pattern of practice by showing that because i have to be able to prove under arizona law to what happened in arizona or what happened in arizona off i can show what happens in arizona but there are no there are no managing agents which is what i have to show to attach liability to merrill lynch that they approved or condone the practice i have to go outside of arizona to do that the panel said no you can't not only that when i presented  evidence or tried to present evidence of ten other brokers throughout the nation the panel wouldn't issue subpoenas they mistakenly thought i was trying to bring a class action you cannot bring a class action before the n a s d i wanted to reserve some time and what's interesting here is with the how did you get to arbitration they filed a separate statement of claim with the n a s d which is the procedure they could have gone to federal court to get the t r o and oftentimes they do that sometimes they go to the court sometimes they go to federal court this time they went to state court and while the case was pending before the n a s d they moved to set the matter for trial in state court what happened was that the judges the court essentially said i'm not going to continue r i'm not going to give you a preliminary injunction because i think you did you may have engaged in wrongdoing and i don't think you can that you'll be able to prevail on the merits and held the case on the inactive calendar until the matter was to be resolved d what merrill did was it was shopping it didn't want to go back before the judge on confirmation so it filed for confirmation in federal court it made the election it's filed there in two thousand and one and it was well over two years later the court moved in federal court to confirm we thought i know you can make this argument in your brief that it would somehow m chooses a forum where they could have chosen the federal form if indeed they had during the federal court had jurisdiction and they failed to do that then they they can't come back later and say wait well i think i'd rather be in federal court now ordinarily is entitle to choose whatever form the plaintiff wants and they chose now what they're doing is saying well we're not going to call it a removal chosen the federal case in federal form in this situation they chose the state court make any difference i mean i know that's not really the question before us but once there is an arbitration award in hand state law as well as federal law calls for that to be enforced by its own terms so it would be confirmed anywhere they went it would appear to me so i guess i could also say i'm not sure really that that's a germane question but i don't really understand why from your perspective it makes any difference well it wasn't well i probably wouldn't be here if they if the district court would have taken place an arbitration a war that's ready to be confirmed i don't understand why you think the result would have been different in state court on the question whether that arbitration award should be confirmed well because all of the issues before that arbitration panel involved state law not general law state law it was a state racketeering statute the evidence that was to be presented would be presented under state law the state racketeering statute contemplated acts occurring outside the state which is what we tried to bring before the panel which the panel refused it's the first time i've ever had a case where i had witnesses i wanted to present and i was prevented from presenting them on the very issue on an element of my claim i had to prove a pattern of practice on a national level to be able to establish that high managing agents of maryland approve this practice which even the the the panel cannot prevent the lid against from presenting relevant and material evidence and that's what happened here it's not a question of whether or not the evidence  sustains the award it was a question of whether or not the litigants got an opportunity to present evidence that's the big issue here that marilyn says well gee whiz there was sufficient evidence to justify the award well sure because we were present we were permitted one discovery and two we found on our own some fifteen other brokers throughout the country could have the same practice had signed these agreements after they started right after they started w beforehand which would show that there was a national practice on the part of merrill lynch to recruit people lied to them by omission which is the statute in arizona not tell them they were going to have to sign this and essentially horse them into staying because couldn't prove for this individual now that they actually found that in my client's case that the agreement was not given to him before his employment but after he started the panel also found that that practice was charles sharp practice and not what it's not what someone should do or a company should do what it what i was prevented from proving and which i had to prove was that high managing agents merrill lynch approved it i couldn't just show that it happened in arizona i had to show that that either through circumstantial evidence that was happening all over the country or in my request for documentation recall discovery request to show that the that there was a policy and pad of merrill lynch to have brokers recruited have them quit have them come over to morrow and then confront them with this agreement that said if you don't sign it now that you're an employee of merrill lynch within thirty days you're out of here no broker can do that because the book they've quit the firm they quit from is not going to take them back their book is transfer it's clear what merrill was trying to do it wanted to get the books the brokers were unimportant it was the assets they were trying to get and that's how they got an image and you want to reserve sometimes to sleep thank you thank you good morning a lot for for ellie merrill lynch let me start with the diversity jurisdiction issue which did not come up and let me start with the other diversity jurisdiction are you i'm sorry your honor which did not come up in the in the opening york and delaware mr moore is there sort of arizona so there's complete diversity of the parties the only question in terms of subject matter jurisdiction is whether the not the controversy requirements satisfied and what we know from the cases is that when whenever a plaintiff arbitration award was issued and we are seeking to confirm not to vacate that award so the question before the court i think in this case is how do you measure the value of the amount of controversy when it's the defendant seeking to obtain confirmation of  seeking to protect or they the amount in terms of the harm that the party is to to prevent and in this case clearly what merrill lynch was seeking was to was a confirmation of an award that said it would have to face no further liability on claims against it that that mr moore brought in the arbitration in excess of five million dollars between that and the judgment in our favor on that on those claims and we're seeking confirmation of that award in that context clearly the mountain controversy is the five million dollars that mr moore that was really in excess of five million dollars that mr moore was seeking on his claims against us and we would  that that's precisely the reason why in the context when a defendant is moving to compel arbitration the very outset of a case there's obviously no award at issue at that point at all in that context the courts do counterclaims was the full five million dollars let's say that mr moore was seeking but simply that the value to merrill lynch of attaining confirmation of that award and placing no further liability on those claims was at least a dollar and that clearly is the case that the value of the painting confirmation of the award in maryland his favor was clearly not zero it was the value of not facing any further liability on the five million dollars plus counterfeiting to mr moore brought against merrill lynch and i would agree with your honor if you  rulings that mr moore would be limited to presenting evidence relating to simply to his employment contract with merrill lynch however the arbitration panel then issued a second order in which it clarified that first order and said just as your honor pointed out that we're not going to limit you just to your employment contract with merrill lynch will allow you to bring in evidence throughout arizona and if you can show that there is a pattern of of unlawful conduct with respect subpoenas to every single witness in arizona that mr slease designated on the the witness list and and in and indeed subpoenaed witnesses outside of arizona if they had some supervisory authority with respect to merrill recruitment practices in arizona and and so mr moore wasn't certainly entitled to to present all of the evidence he could gather with respect to the employment practices in arizona now  panel found whatever was just clipped and pointed out looking at this evidence and i'll just point out one other fact at the hearing itself mr moore actually did call three other brokers from arizona who testified to very similar  occurrences where they were hired by merrill lynch and then allege that it wasn't until after they had started that they were shown the restrictive covenants agreement so the arbitration panel had before it's evidence that what happened to mr moore was not  allegation that he was not shown the restrictive covenants agreement until after he joined merrill lynch but nonetheless having heard that evidence the panel concluded that there restrictive covenants agreement was a valid and enforceable contract that it was not obtained through business to rest by fraud it was not unconscionable in other words found no unlawful conduct on merrill lynch's part with respect to its employment agreement with mr moore now forward in the same place you had stern yes and that's not correct and there is no authority for the proposition that merely because you move to compel arbitration you take or and that and that is what we did here filed a motion for a t r o which was which was granted and then later filed a motion to compel arbitration in state court and that's what sent this matter off to arbitration but there is no authority that then says after you have  begin the arbitration proceedings in state court that you are not then free to bring in independent action as your honor pointed out an independent action authorized pacifically by just testing that's the question whether it is an independent action yes and it clearly is because it's authorized by section nine of the f a a which says that you can bring the action either in state court if we wanted to or you can bring it in state in federal court as long as the court has subject matter jurisdiction which which was the case here under under diversity but the the allegation that this was somehow an improper removal of the case is clearly wrong we did not file removal petition in the state court  continued to go forward even after we filed our motion to confirm in federal court where i guess that's the very question that they're in there raising martin why are you allowed to carry on to at the same time well and that's that's exactly what the colorado river extension doctrine goes to as the court as the supreme court made clear both in colorado river and in the moses age cone case which is still the supreme court's leading cases dealing with the application of colorado extension principles in the arbitration context there is that the general rule is that there is no bar to having state and federal actions dealing with the same parties on the same subject matter go forward simultaneously that's the general rule that's perfectly and that's perfectly circumstances may district court exercise its discretion to abstain and essentially give up the jurisdiction that it rightfully has in deference to a pending state court action and in this circumstance the district court could not possibly have question in deciding not to abstain because the state court here after mr slease filed a motion to vacate the arbitration work in state court so there were clearly two the two pending actions going forward on on simultaneous the state court in its order of july twenty third twenty three two thousand and three specifically said that the federal form of federal court action was the more appropriate form for resolution of issues relating to confirmation of the  and i said that because all of the parties to the arbitration were present in the federal action but they were not in the state action the state action just involved merrill lynch and more rest the federal action involved merrill lynch moore and the with the second defend rauscher so here the state court specifically said i'm going to state my case i think the federal form is the more appropriate one for this action to go forward and that's precisely why the the district court here ultimately once some proceedings relating to the arbitration have begun in state court whether the subsequent filing of a motion to confirm is really is it really just a continuation of the state proceedings or is an independent action under federal law and the vulcan case specifically held especially to the to pinion that a motion to confirm in that context is an independent action authorized by section nine of the f a a and it can go forward regardless of whether there was some prior state  court action that was pending the only issue that comes up in this context is simply whether under colorado river the federal court in deference to that earlier state court actions it's just a stand and as i pointed out here there was no reason for the federal court say the however the statement that dane rauscher is not a resident of arizona is contradicted by the merrills pleadings which i point out page nine of my reply brief the y allege that dana roger was a resident of the state of arizona and they're pleading with the district court and i think it's just sort of a red herring out there and i think also that the argument that doesn't occur here because this is an arbitration proceeding governed by the f a a the f a a does not confer subject matter jurisdiction in federal court both the state and and local courts state courts can't or the federal courts can deal with  what is more troubling however is the restrictions that were placed on mr moore because and as hard as i tried i could not get the arbitrator's to understand that i had an element i could not prove in arizona i could not prove that a high managing agent approved of the of the practice without going outside of arizona because there were no hi managing agents in arizona this we were just told that you were allowed to serve subpoenas on people out of state if they were in the line and affecting this if more than one person that they had was a mr vick who was the person who recruited mr moore and had been the district manager so he was no longer in state when the when the arbitration occurred i was permitted to subpoena him because at the time he was the person who recruited more and gave them their initial contracts not to restrictive covenant agreement but i documents and information concerning the financial consultant point agreement restrictive company a copy of which is attached stated as follows the dating all began using your green then if i the person who drafted the agreement then a file documents commenting discussing concerning using agreement should or may be presented to a group and or competitive higher now merrill's argument is well gee you got that you got to have people in arizona testify and i showed that they were  they were victims of the same agreement and the same practice but i can't show that next level and that element that i need which is that merrill approved or somehow managing agent approved i had witnesses who are going to testify that outside of arizona this practice occurred in several other states california illinois etc which would have circumstantially allowed me to do it but the arbitrator's would not do it they wouldn't let me bring those witnesses managing agent is somebody who can affect under the federal definition of that chairman of the federal rico act which i cite as someone who can affect the policy of the corporation mr vick couldn't and he was the highest man in arizona that i