Commercial Litigation and Arbitration

The “Facially Conclusive” Exception to Younger Abstention

From HSBC Bank USA, N.A. v. N.Y. City Comm’n on Human Rights, 2009 U.S. Dist. LEXIS 110112 (S.D.N.Y. Nov. 25, 2009):

On October 21, 2009, Plaintiffs filed their complaint against the Commission ("Complaint") seeking a declaratory judgment that §§ 8-107(10) and (11) of the [New York City Administrative] Code 1 are preempted by 12 U.S.C. §§ 24 and 1829(a) to the extent they prohibit HSBC from denying employment to an officer who has entered into an adjournment in contemplation of dismissal under New York Criminal Procedure Law § 170.55 in connection with a violation of New York Penal Law § 240.50. Plaintiffs also sought to enjoin the [New York City Commission on Human Rights] from taking action against them in the matter captioned "In the Matter of the Complaint of: Fangshou Hsu, Complainant, against, HSBC Bank USA, N.A., Virginia Edmonston and Patrick Lombardi, Respondents," Complaint No. M-E-T-9-1021059 (OATH Index No. 100522). ***


Defendants challenge Plaintiffs' request for injunctive relief on the basis of the abstention doctrine set forth in Younger v. Harris, 401 U.S. 37 (1971). Younger abstention requires federal courts to refrain from enjoining pending state judicial proceedings, including administrative proceedings, in order to allow the state to resolve matters within its jurisdiction. ***

.Because there exists a pending administrative proceeding concerning an important state interest in which Plaintiffs' constitutional claims may be litigated, the requirements of the Younger abstention doctrine have been met.


An exception to Younger abstention exists where preemption is "facially conclusive" or "readily apparent" on the face of the pleadings.... Although the Second Circuit has yet to apply the "facially conclusive" exception to the Younger abstention doctrine, several other circuit courts have applied this exception. See, e.g., Woodfeathers, Inc. v. Washington County, 180 F.3d 1017, 1021-22 (9th Cir. 1999); Colonial Life & Accident Ins. Co. v. Medley, 572 F.3d 22, 26-27 (1st Cir. 2009); GTE Mobilnet of Ohio v. Johnson, 111 F.3d 469, 475 (6th Cir. 1997). Courts in this circuit have also recognized the Second Circuit Court of Appeal's likely application of the "facially conclusive" exception to Younger abstention. ***

The "facially conclusive" exception to Younger abstention applies only where there exists no unresolved questions of fact or law in deciding the preemption question. See [New Orleans Public Serv., Inc. v. Council of the City of New Orleans (“NOPSI”), 491 U.S. 350, 367 (1989)] ("[W]hat requires further factual inquiry can hardly be deemed 'flagrantly' unlawful for purposes of a threshold abstention determination."); Colonial Life & Accident Ins., 572 F.3d at 29 (holding preemption defense not "facially conclusive" when it turned on an unsettled question of law). n particular, courts have found the "facially conclusive" exception to Younger abstention inappropriate where deciding the preemption issue would require "a detailed analysis of state law," GTE Mobilnet, 111 F.3d at 478, or where the legal question on which the preemption issue turned was one of first impression for the court, see Woodfeathers, 180 F.3d at 1022. See also Colonial Life & Accident Ins. , 572 F.3d at 29 (finding "facially conclusive" exception inapplicable where factual disputes remained); [ Terminix Int'l Co. v. Rocque, 210 F. Supp. 2d 97, 102 (D. Conn. 2002), 210 F. Supp. 2d at 102] (declining to apply "facially conclusive" exception where there existed a legal question of first impression).

In considering whether it is "facially conclusive" that abstention is appropriate, the question to be decided is not the ultimate issue of whether state law is preempted but rather whether unresolved legal and factual issues regarding preemption exist on the face of the relevant statutes. See NOPSI, 491 U.S. at 364-65 (rejecting argument that "a district court presented with a pre-emption-based request for equitable relief should take a quick look at the merits; and if upon that look the claim appears substantial, the court should endeavor to resolve it"); Colonial Life & Ace. Ins., 572 F.3d at 27-28.

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