Current Month (January 2026)
Supreme Court Declines to Grant Certiorari on Whether Manifest Disregard Standard Is Proper Standard for Vacatur under Federal Arbitration Act
By Leslie A. Berkoff, Partner and Chair of Dispute Resolution Practice Group, Moritt Hock & Hamroff LLP
The Supreme Court has once again declined to grant certiorari on a case that would have addressed whether “manifest disregard” exists as a standard for vacatur under Section 10 of the Federal Arbitration Act (“FAA”). Zeidman v. Lindell Management LLC, 145 F.4th 820 (8th Cir. 2025). It is well recognized that the ability to challenge an arbitration award is very limited and Section 10 of the FAA sets forth four “exclusive” grounds for vacatur: (1) if the award was “procured by corruption, fraud, or undue means”; (2) if the arbitrator(s) displayed “evident partiality or corruption”; (3) if “the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy” or any other misbehavior that prejudices the rights of any party; and (4) “where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.” None of the forementioned articulated bases include an error under the law; however, caselaw has evolved to recognize a standard known as “manifest disregard” of the law as a basis to vacate arbitration awards.
However, courts are divided on this “standard,” how it is to be applied, and what it actually means (is it separate from the above four grounds or an overarching application of the same?). In the Ninth Circuit, a party challenging an award must show that the arbitrator understood and correctly stated the law but proceeded to disregard it, whereas in the Second Circuit, a party must show that the arbitrators knew both the relevant and well-settled long-standing legal principle and that it controlled the outcome of the disputed issue but nonetheless willfully disregarded and refused to apply it. In further contrast, the Fifth Circuit does not even recognize manifest disregard as a separate basis to vacate an award.
Before this current denial, the Supreme Court already passed on two prior opportunities to clarify the law. See Hall Street Associates, LLC v. Mattel, Inc., 552 U.S. 576, 585 (2008) and Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 559 U.S. 662, 672 n.3 (2010).
What does this mean going forward? Consideration must be given when drafting arbitration clauses when choosing the “seat” of the arbitration, which is what law will apply to determining various issues in the matter. If you wish to avail yourself as a party to apply the manifest disregard standard in addition to those explicitly set forth in the FAA, then you need to select a circuit that recognizes the same.
