Nikola Corporation v. Milton

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 5, 2026
• Docket: 24-6210
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 5 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

NIKOLA CORPORATION, a Delaware No. 24-6210 corporation, D.C. No. 2:23-cv-02635-DJH Plaintiff - Appellee,

v. MEMORANDUM*

TREVOR R. MILTON, a Utah resident,

Defendant - Appellant.

Appeal from the United States District Court for the District of Arizona Diane J. Humetewa, District Judge, Presiding

Submitted February 3, 2026** Phoenix, Arizona

Before: CALLAHAN, OWENS, and FRIEDLAND, Circuit Judges.

Trevor R. Milton seeks vacatur, under sections 10(a)(3) and (4) of the

Federal Arbitration Act (“FAA”), of a $167.727 million arbitration award he owes

to Nikola Corporation. He appeals the district court’s confirmation of the award

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). and entry of judgment. We have jurisdiction under 28 U.S.C. § 1291, and we

affirm.

We review the district court’s confirmation of an arbitration award de novo.

Monster Energy Co. v. City Beverages, LLC, 940 F.3d 1130, 1133 (9th Cir. 2019).

Under the FAA, federal courts’ “[r]eview of an arbitration award is ‘both limited

and highly deferential’ and the arbitration award ‘may be vacated only if it is

completely irrational or constitutes manifest disregard of the law.’” Comedy Club,

Inc. v. Improv W. Assocs., 553 F.3d 1277, 1288 (9th Cir. 2009) (quoting

Poweragent Inc. v. Elec. Data Sys. Corp., 358 F.3d 1187, 1193 (9th Cir. 2004))

(citation modified). “[F]or an arbitrator’s award to be in manifest disregard of the

law, ‘it must be clear from the record that the arbitrator recognized the applicable

law and then ignored it.’” Id. at 1290 (quoting Mich. Mut. Ins. v. Unigard Sec.

Ins., 44 F.3d 826, 832 (9th Cir. 1995)) (citation modified).

1. Milton’s challenge to the arbitrators’ allocation of fault mischaracterizes

the Securities and Exchange Commission’s (“SEC”) Consent Order. The

Summary of the Consent Order does not identify three independent bases for

liability but instead merely summarizes the SEC’s findings. And in the remainder

of the Consent Order, the SEC repeatedly emphasizes that Milton’s conduct was

the cause of Nikola’s violations. To the extent that Milton’s argument is less about

what the SEC articulated in the Consent Order and more about the share of

2 24-6210 damages caused by his actions, it asks us to reevaluate the arbitrators’

interpretation of facts, which would not be a basis for vacatur. Coutee v. Barington

Cap. Grp., L.P., 336 F.3d 1128, 1133-34 (9th Cir. 2003) (“Manifest disregard of

the facts is not an independent ground for vacatur in this circuit.” Where

“arbitrators considered [a] factual dispute and resolved it in favor of [a party],” the

court, on appeal, “ha[s] no authority to re-weigh the evidence.”).

2. Milton’s contention that the arbitrators manifestly disregarded the “burden

of proof” for causation, although framed as a challenge to the arbitrators’

interpretation of Delaware law, is actually an argument that the arbitrators’ factual

determinations about causation were erroneous. Again, courts cannot use

disagreement with the arbitrators’ factfinding as a basis for vacatur. Id.

3. Insofar as Milton contends that the arbitrators applied the wrong causation

standard, his argument also fails. Delaware law establishes loose causation

standards for assessing damages for breach of fiduciary duty. See, e.g., Thorpe by

Castleman v. CERBCO, Inc., 676 A.2d 436, 444-45 (Del. 1996); Metro Storage

Int’l LLC v. Harron, 275 A.3d 810, 859 (Del. Ch.), judgment entered sub nom. In

re Metro Storage Int’l LLC v. Harron, 2022 WL 2473354 (Del. Ch. 2022). And

the Delaware Supreme Court has made clear that courts have considerable power

to impose equitable and monetary relief in cases involving a breach of the duty of

loyalty. Gotham Partners, L.P. v. Hallwood Realty Partners, L.P., 817 A.2d 160,

3 24-6210 176 (Del. 2002). The arbitrators comported with those standards in determining

that Milton’s breach of his duties of loyalty and good faith caused the fees for legal

and professional representation incurred by Nikola, and in awarding damages.

4. Milton has failed to adequately present his challenge to the admission of

unredacted invoices during the arbitration proceedings. Appellants are required to

submit sufficient record evidence that would allow the court to assess the validity

of any claims that turn on evidence. See Fed. R. App. P. 10(b)(2); 9th Cir. R. 30-

1.2(a); 9th Cir. R. 30-1.4(b). Milton did not submit any invoices, redacted or

unredacted, so we have no basis to evaluate his claim of procedural error, or way to

determine whether any such error was harmless. See In re O’Brien, 312 F.3d

1135, 1137 (9th Cir. 2002) (order); Lowery v. United States, 258 F.2d 194, 196-97

(9th Cir. 1958).

AFFIRMED.1

1 Milton’s motion for judicial notice, Docket No. 60, is denied as irrelevant to the issues in this appeal.

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