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Toyota Can Collect $2.6M from Ex-General Counsel, 9th Cir. Rules

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By Andrew Chow, Esq. on February 14, 2012 4:59 AM

A former Toyota in-house lawyer's appeal of an arbitration decision has hit the skids. Dimitrios P. Biller must pay his former employer $2.6 million, the Ninth Circuit ruled Feb. 3.

An arbitrator awarded Toyota Motor Corp. $2.6 million after finding that Biller disclosed confidential company information in violation of the parties' severance agreement, the Associated Press reports. A state court, and later a federal district court, confirmed the award.

Biller appealed to the Ninth Circuit, asking the court to vacate the award. But the Ninth Circuit ruled against Biller's appeal. Here's why:

The agreement between Toyota and Dimitrios Biller stated that arbitration would be governed by the Federal Arbitration Act, the Ninth Circuit held. The FAA allows only limited grounds to vacate an arbitration award, such as when an arbitrator exceeds his powers. That's what Biller claimed in his appeal.

An arbitrator exceeds his powers "when the award is completely irrational, or exhibits a manifest disregard of law," the Ninth Circuit wrote, citing case precedent.

Biller claimed the arbitrator disregarded the law by not addressing his defenses of unclean hands and equitable estoppel. But the Ninth Circuit disagreed, finding the arbitrator "impliedly" addressed those defenses in his written decision, and rejected them.

Biller also appealed the district court's denial of his contempt motion against Toyota. An injunction allowed Toyota to delete confidential information from Biller's computer, but the company deleted five documents that Biller claimed were "for his own education."

The Ninth Circuit agreed with the district court, finding Dimitrios Biller prepared the documents while employed by Toyota, making them "confidential" and subject to deletion. The district court did not abuse its discretion in denying Biller's contempt motion, the Ninth Circuit held.

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