The Veil of Acquiescence

“The Veil of Acquiescence” is a critical analysis of the Ninth’s Circuit’s decision in Biller v. Toyota Motor Corp., 668 F.3d 655 (9th Cir. 2012). Dimitrios Biller, former in-house counsel for Toyota Motor Services, brought suit against Toyota Motor Corporation seeking recovery for myriad offenses relating to the termination of his employment. The suit was referred to arbitration per the terms of Biller’s severance agreement, wherein Toyota asserted a number of cross-claims alleging Biller misappropriated Toyota’s trade secrets. The arbitrator awarded Toyota injunctive and monetary relief for egregious breaches of contract, and the District Court for the Central District of California confirmed the award. Biller unsuccessfully appealed to the Ninth Circuit, which affirmed that the federal policy favoring arbitration supported the decision to enforce the arbitrator’s award.

The article reviews the arbitration and litigation procedures, critically assesses the Ninth Circuit’s uncharacteristically hospitable approach to arbitration, and concludes that the Court’s pro-arbitration disposition should not be misinterpreted as acquiescence to the deferential review standards the Federal Arbitration Act prescribes for courts reviewing arbitral awards. Rather, the Ninth Circuit used Biller’s dispute, which itself gave rise to no nuanced legal analyses, to indoctrinate into federal jurisprudence California state precedent that liberalizes judicial review of arbitration proceedings. The result is inimical to the U.S. Supreme Court’s clear mandate that FAA §§ 9-11 represents the exclusive grounds for vacating arbitral awards. Moreover, the decision invites courts within the Ninth Circuit to foster the same invasive judicial merits reviews, jurisdictional variability, and enforcement uncertainty that the federal policy favoring arbitration seeks to preclude.