The Veil of Acquiescence: Between the Lines of an Intuitive Appellate Decision, the Ninth Circuit Subtly Marginalizes FAA Limitations on Judicial Review* – Vol. 24 No. 4

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Author: Anthony Rallo**

Published: June 2014


In Biller v. Toyota Motor Corporation,1 the Ninth Circuit affirmed a decision by the U.S. District Court for the Central District of California, that confirmed an arbitral award in favor of Toyota Motor Sales. Plaintiff Biller sought vacatur on a number of insubstantial grounds, all of which were denied by the district court. The Ninth Circuit granted appeal and addressed each of Biller’s arguments, ultimately reaffirming that Federal Arbitration Act (“FAA”) § 10 contains the exclusive grounds for vacatur of arbitral awards.2 While it may appear that this decision demonstrates long overdue Ninth Circuit compliance with the federal policy favoring arbitration, the decision subtly limits the FAA’s role in enforcing arbitral awards. The Ninth Circuit proclaimed that parties may implicate state law in arbitration agreements to circumvent the limited judicial review of arbitral awards available under the FAA. This will frustrate attempts to federalize the U.S. law of arbitration, raise questions regarding the efficacy of arbitral awards borne of contracts that do not expressly invoke the FAA, and give rise to undesirable post-arbitration litigation.


Dimitrios Biller worked at Toyota Motor Sales (“TMS”) as in-house counsel from 2003 to 2007. In 2007, Biller sued TMS for constructive wrongful discharge, alleging TMS’s unethical discovery practices compelled him to resign. The parties settled by entering a Severance Agreement, which required Biller to: 1) release any claims relating to his employment; 2) protect TMS’s Confidential Information; and 3) return, without copying, any TMS Confidential Information in his possession.

The Severance Agreement contained a Dispute Resolution clause requiring the parties to submit any disputes relating to the Agreement to binding …

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*Notes and Comments
**Anthony Rallo is a Managing Editor of The Yearbook on Arbitration and Mediation and a 2014 Juris Doctor Candidate at The Pennsylvania State University Dickinson School of Law.