A circuit split is in the making, and it could signal a shift with significant implications for federal arbitration law. Just eighteen months after the U.S. Supreme Court’s March 25, 2008 decision in the controversial case of Hall Street Associates v. Mattel, Inc., three circuits are already in ripe disagreement as to whether Hall Street abrogates the half-century old, judicially-created doctrine of “manifest disregard.”

Manifest disregard is a common-law exception to the limited grounds for vacatur of arbitral awards enumerated in the Federal Arbitration Act (FAA). This doctrine empowers courts to refuse to enforce awards that evince a “manifest disregard of the law,” understood to mean a willful defiance of clearly applicable law, not just garden-variety legal error. It has always been controversial for at least two reasons.

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