Toyota Motor Corp. v. Choi (U.S. Supreme Court)

Vehicle purchase and lease agreements often contain arbitration provisions. Many of these provide that gateway questions of arbitrability—such as the scope or enforceability of the clause—shall be decided by the arbitrator. Because of state automobile-dealer laws, manufacturers and distributors cannot lawfully sell vehicles directly to consumers. Without contractual privity, they must rely on traditional principles of contract law to obtain the benefits of arbitration to which they are entitled. The Ninth Circuit refused to apply those principles to enforce a provision that would have permitted an automobile manufacturer to arbitrate the gateway questions of arbitrability with the customer—solely because the manufacturer was not a direct party to the agreement. We filed an amicus brief on behalf of the American Honda Motor Company explaining why the issue was highly important for dispute resolution in the automobile industry.