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Toyota Motor Corp. v. Choi

A class of consumers sued Toyota because of a brake defect in 2010 Priuses. Toyota, after participating for months in the case with no mention of a desire to arbitrate, abruptly sought to arbitrate with several of the named plaintiffs after its motion to dismiss their claims was denied. Toyota relied on arbitration agreements between the plaintiffs and Toyota dealers—agreements to which Toyota itself was not a party. Toyota argued that the plaintiffs were bound to arbitrate with it as well as the dealers under the doctrine of equitable estoppel, which provides that someone who seeks to rely on parts of a contract in litigation with a nonparty is bound by other provisions of the contract. The district court held that equitable estoppel did not apply, because the plaintiffs’ claims against Toyota were not related to their purchase agreements with the dealers, and also that Toyota had waived arbitration by waiting too long to seek it. The Ninth Circuit affirmed the equitable estoppel ruling and did not reach waiver.

Toyota filed a petition for certiorari in the U.S. Supreme Court, claiming that the lower courts should not have decided the equitable estoppel question themselves, but instead should have referred to an arbitrator the very question whether the plaintiffs were obligated to arbitrate. PCLG, serving as co-counsel for the class representatives before the Supreme Court, filed a brief in opposition explaining that the lower courts’ approach to the issue is correct and that there rulings are not in conflict with those of any other circuits. The Court denied Toyota’s petition.