Seagate Technology, LLC v. Western Digital Corporation, Sining Mao, 854 N.W.2d 750

An arbitrator awarded Seagate over $500 million against Mao and Western Digital for misappropriation and related conduct; the award was partially vacated by the district court and reinstated by the court of appeals.
The arbitration clause in Mao’s Seagate employment agreement, incorporated AAA Employment Rules, authorized the arbitrator to grant injunctive relief and other remedies, with judgment enterable in court.
Seagate moved for sanctions in the arbitration, alleging fabrication of evidence related to Trade Secrets 4-6; it sought preclusion of defenses and entry of liability on those secrets.
The arbitrator sanctioned Western Digital and Mao, precluding evidence/defenses on Trade Secrets 4-6 and entered judgment of liability, with damages awarded to Seagate totaling about $525 million plus interest, jointly and severally against Western Digital and Mao.
The district court vacated the Trade Secrets 4-6 portion and ordered a rehearing; Seagate appealed; the Minnesota Court of Appeals reversed and reinstated the award in full, leading to Supreme Court review.
The Supreme Court holds that Western Digital and Mao did not waive their vacatur rights and that the arbitrator did not exceed authority or refuse to hear material evidence under Minn. Stat. § 572.19.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Waiver of vacatur rights under Minn. Stat. § 572.19	Seagate contends WD and Mao waived by seeking sanctions.	WD and Mao argue no waiver required for 1(3)-(4).	WD and Mao did not waive.
Arbitrator’s authority to impose punitive sanctions	Seagate asserts broad authority to sanction for misconduct within arbitration.	WD and Mao argue sanctions exceeded the scope or were misapplied.	Arbitrator did not clearly exceed authority.
Vacatur for refusal to hear evidence (1(4))	Seagate contends sanctions precluded evidence, amounting to refusal to hear material evidence.	WD and Mao argue the sanctions are improper or undermine hearing fairness.	Sanctions did not constitute a vacatur-triggering refusal to hear evidence under § 572.19(1)(4).
Public policy or rehearing implications	Seagate argues reversal of sanctions or rehearing is appropriate to correct errors.	WD and Mao argue no need to rehear if sanctions valid and evidence considered.	Court reinstates the full award and does not require rehearing.

State v. Miller, 600 N.W.2d 457 (Minn. 1999) (punitive sanctions as a remedy)
Twomey v. Durkee, 291 N.W.2d 696 (Minn. 1980) (arbitration waiver distinctions; arbitrability vs. other clause challenges)
Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (U.S. 1995) (choice-of-law vs. arbitration scope; permissibility of arbitration awards)
Minnesota Dept. of Public Safety v. Law Enforcement Labor Servs., Inc., 527 N.W.2d 824 (Minn. 1995) (arbitrator authority as contract interpretation; limits of inherent authority)