Plaintiff moved to vacate an arbitration award issued in favor of defendant Stroehmann Bakers on the grounds that, among other things, the arbitrator’s decision was in “manifest disregard of the law.” The U.S. District Court for the District of New Jersey, relying upon Third Circuit case law, noted that plaintiff was required to establish that the arbitrator’s award had absolutely no support from the record in order to prevail on this basis. The court found that plaintiff had failed to meet the standard for manifest disregard of the law, and thus denied plaintiff’s motion to vacate.
Interestingly, the District Court did not discuss whether manifest disregard of the law remains a valid basis to vacate or modify arbitration awards, an issue that has been the subject of debate among federal courts since the U.S. Supreme Court’s decision in Hall Street Associates v. Mattel. Recently, the Supreme Court addressed the manifest disregard standard in a footnote in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., but did not say whether it remains viable. Click here and here to review some of our prior blog posts on this evolving area of the law.
A copy of the district court’s decision, captioned International Brotherhood of Teamsters, Local 701, v. Stroehmann Bakeries, No. 09-6205 (D.N.J. 2010), can be found here.