Wachovia Securities, LLC v. Brand, 2012 U.S. App. LEXIS 3047 (4th Cir. Feb. 16, 2012):

We find that the Supreme Court's more recent decision in Stolt-Nielsen sheds further light on the operation of "manifest disregard" post-Hall Street.

Footnote 7 Our sister circuits have split into three camps about the meaning of the word "exclusive" in Hall Street. The Fifth and Eleventh Circuits have read Hall Street as holding that the common law standards are no longer valid grounds for vacatur because the FAA's grounds are exclusive. Citigroup Global Mkts., Inc. v. Bacon, 562 F.3d 349, 358 (5th Cir. 2009); Frazier v. CitiFinancial Corp., 604 F.3d 1313, 1323-24 (11th Cir. 2010). Similarly, the First Circuit has noted in dicta that Hall Street held that manifest disregard was not a valid ground for vacating or modifying an arbitral award in cases brought under the FAA. Ramos-Santiago v. UPS, 524 F.3d 120, 124 n.3 (1st Cir. 2008). The Second and Ninth Circuits have held that since Hall Street, manifest disregard exists as a shorthand or judicial gloss for §§ 10(a)(3) and (4). See Stolt-Nielsen SA v. AnimalFeeds Int'l Corp., 548 F.3d 85, 93-94 (2d Cir. 2008), rev'd on other grounds by Stolt-Nielsen S. A. v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758 (2010); Comedy Club, Inc. v. Improv W. Assocs., 553 F.3d 1277, 1290 (9th Cir. 2009). The Sixth Circuit, in an unpublished opinion, has read Hall Street narrowly and found that it only prohibited private parties from contracting for greater judicial review Coffee Beanery, Ltd. v. WW, L.L.C., 300 F. App'x 415, 419 (6th Cir. 2008). It reasoned that "[i]n light of the Supreme Court's hesitation to reject the "manifest disregard" doctrine in all circumstances, we believe it would be imprudent to cease employing such a universally recognized principle," then applied the manifest disregard standard. Id. at 419.

***The Supreme Court's reasoning in Stolt-Nielsen closely tracked the majority of circuits' approach to manifest disregard before Hall Street: it noted that there was law clearly on point, that the panel did not apply the applicable law, and that the panel acknowledged that it was departing from the appli-cable law. Nonetheless, the Court said,

We do not decide whether "manifest disregard" survives our decision in Hall Street Associates, as an independent ground for review or as a judicial gloss on the enumerated grounds for vacatur set forth at 9 U.S.C. § 10. AnimalFeeds characterizes that standard as requiring a showing that the arbitrators knew of the relevant [legal] principle, appreciated that this principle controlled the outcome of the disputed issue, and nonetheless willfully flouted the governing law by refusing to apply it. Assuming, arguendo, that such a standard applies, we find it satisfied.

Id. at 1768, n.3 (citations and quotation marks omitted). We read this footnote to mean that manifest disregard continues to exist either "as an independent ground for review or as a judicial gloss on the enumerated grounds for vacatur set forth at 9 U.S.C. § 10." Therefore, we decline to adopt the position of the Fifth and Eleventh Circuits that manifest disregard no longer exists. ***

Although we find that manifest disregard continues to exist as either an independent ground for review or as a judicial gloss, we need not decide which of the two it is because Wachovia's claim fails under both.