IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 19-10720

Summary Calendar

DYNACOLOR, INCORPORATED,

 Plaintiff - Appellee

v.

RAZBERI TECHNOLOGIES, INCORPORATED, 

 Defendant - Appellant

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 3:18-CV-2590

Before WIENER, HAYNES, and COSTA, Circuit Judges.

PER CURIAM:*

Razberi Technologies, Inc. challenges an arbitration award in favor of 

DynaColor, Inc. Razberi contends that the arbitrator “manifestly disregarded” 

Texas unjust enrichment law. The district court noted uncertainty about 

whether manifest disregard remains a ground for vacating arbitration awards, 

but it did not decide that legal question. Instead, the district court concluded 

 

* Under 5TH CIR. R. 47.5, the court has determined that this opinion should not be 

published and is not precedent except under the limited circumstances set forth in 5TH CIR. 

R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

January 9, 2020

Lyle W. Cayce

Clerk

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that Razberi could not meet the demanding standard even assuming it still 

applies. We agree and affirm the district court’s confirmation order. 

I.

DynaColor is a Taiwanese company that designs, manufactures, and 

distributes network video recorders, which are computer systems that capture 

and store video surveillance on various digital formats.1 DynaColor formed 

Razberi as a Delaware subsidiary to sell its recorders. In practice, Razberi 

would buy parts from DynaColor, assemble them, and sell Razberi-branded 

products. 

With DynaColor’s support, Razberi negotiated a purchase agreement 

with Avigilon Corporation—a former DynaColor customer—in March 2014. 

Under the agreement, “Avigilon had the right, but not the obligation, to 

purchase [recorders] from Razberi.” DynaColor guaranteed Razberi’s 

contractual obligations.

But shortly after signing the agreement, “Avigilon became concerned 

about” Razberi’s ability to “meet anticipated demand” and supply satisfactory 

recorders. As a result, Avigilon, on its own initiative, reached out to other 

suppliers, including DynaColor, in June 2014. Three months later, Avigilon 

and DynaColor entered into a purchase agreement.

Thinking it still had a reliable buyer in Avigilon, Razberi signed a 

contract with DynaColor for parts in November 2014. Razberi also signed a 

promissory note agreeing to pay DynaColor $595,706 over two years. Early 

the next year, however, Avigilon stopped buying Razberi’s recorders.

 

1 These facts come from the parties’ pleadings and the final award in the underlying 

arbitration proceeding. See Timegate Studios, Inc. v. Southpeak Interactive, L.L.C., 713 F.3d 

797, 803 (5th Cir. 2013) (“[W]e are bound by the arbitrator’s factual findings regarding [the 

parties’] conduct . . . .”). 

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After this fallout, Razberi asked DynaColor whether Avigilon had 

approached it about recorder sales. DynaColor denied that it was doing 

business with Avigilon.

DynaColor then filed an arbitration demand based on Razberi’s alleged

breaches of the November 2014 contract and the promissory note. Razberi 

counterclaimed, alleging that DynaColor tortiously interfered with—and 

“usurp[ed] the fruits of”—its March 2014 agreement with Avigilon. Razberi 

sought “lost profits and any unjust enrichment obtained by DynaColor.”

The arbitrator concluded that Razberi breached the November 2014 

contract and the promissory note and awarded DynaColor $1.362 million in 

damages and attorney’s fees. And even though the arbitrator found that 

DynaColor deceived Razberi about its relationship with Avigilon, he 

determined that “no action or inaction of DynaColor, Inc. caused Razberi to 

lose the Avigilon business.” Reasoning that unjust enrichment “requires 

causation,” the arbitrator denied Razberi’s claim.

DynaColor moved for confirmation of the award in federal district court. 

Razberi sought to vacate the order, arguing that the arbitrator “manifestly 

disregarded” Texas law in requiring causation for an unjust enrichment 

recovery. According to Razberi, in seeking that equitable remedy, it had to 

show only that DynaColor usurped a corporate opportunity in entering into a 

purchase agreement with Avigilon—not tort-like causation and damages. 

The district court confirmed the award. Observing that it is unclear 

whether “manifest disregard” is still a basis for vacating an arbitration award, 

the district court held that Razberi failed to show manifest disregard even if it 

remains a ground for vacatur. The district court concluded that there was no 

evidence that the arbitrator knew unjust enrichment does not require 

causation yet ignored that law. It also found that “nothing in the record 

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suggests [the arbitrator] would have decided the . . . claim differently” had he 

“not imposed [the] causation requirement.”

II.

Appellate “review of an arbitration award is extraordinarily narrow.” 

YPF S.A. v. Apache Overseas, Inc., 924 F.3d 815, 819 (5th Cir. 2019) (quoting 

Antwine v. Prudential Bache Sec., Inc., 899 F.2d 410, 413 (5th Cir. 1990)). So 

although we review the district court’s confirmation order de novo, “our review 

of the arbitrator’s award itself . . . is very deferential.” Id. (alteration in 

original) (quoting Timegate, 713 F.3d at 802). The party seeking vacatur bears 

the burden of proof. See 21st Century Fin. Servs., L.L.C. v. Manchester Fin. 

Bank, 747 F.3d 331, 336 (5th Cir. 2014).

III.

Razberi’s challenge relies on the “manifest disregard” standard, a ground

for vacatur that some circuits no longer recognize. Compare Med. Shoppe Int’l, 

Inc. v. Turner Invs., Inc., 614 F.3d 485, 489 (8th Cir. 2010), and Frazier v. 

CitiFinancial Corp., 604 F.3d 1313, 1324 (11th Cir. 2010) (rejecting “manifest 

disregard” as a basis for vacating an arbitration award), with Wachovia Sec., 

LLC v. Brand, 671 F.3d 472, 480 (4th Cir. 2012), and Schwartz v. Merrill Lynch 

& Co., 665 F.3d 444, 452 (2d Cir. 2011), and Comedy Club, Inc. v. Improv W. 

Assocs., 553 F.3d 1277, 1290 (9th Cir. 2009) (continuing to recognize “manifest 

disregard” as a basis for vacating arbitration awards). The circuits that have 

jettisoned the “manifest disregard” standard emphasize a recent Supreme 

Court opinion stating that the grounds enumerated in the Federal Arbitration 

Act are the exclusive means for vacating an arbitration award.2 See, e.g., Med. 

 

2 Section 10(a) provides for vacatur: 

(1) where the award was procured by corruption, fraud, or undue means;

(2) where there was evident partiality or corruption in the arbitrators, or 

either of them;

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Shoppe, 614 F.3d at 488–89 (citing Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 

U.S. 576, 584 (2008)). Circuits retaining the “manifest disregard” standard 

reason that the Supreme Court has left open whether it survives Hall Street

“as an independent ground for review or as a judicial gloss on the [statutory] 

grounds for vacatur.” See, e.g., Brand, 671 F.3d at 482–83 (quoting StoltNielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 672 n.3 (2010)).

We have previously declined to take a side on this split and need not do 

so here because Razberi fails to show that the arbitrator manifestly 

disregarded controlling law. See McKool Smith, P.C. v. Curtis Int’l, Ltd., 650 

F. App’x 208, 212 (5th Cir. 2016) (per curiam). This is unsurprising given that 

the standard is deferential to the arbitrator and, by design, is “difficult to 

satisfy.” Bacon, 562 F.3d at 354. “Manifest disregard ‘means more than error 

or misunderstanding with respect to the law.’” Brabham v. A.G. Edwards & 

Sons, Inc., 376 F.3d 377, 381–82 (5th Cir. 2004) (quoting Prestige Ford v. Ford 

Dealer Comput. Servs., Inc., 324 F.3d 391, 395 (5th Cir. 2003)). Razberi must 

therefore show that the arbitrator “appreciated the existence of a clearly 

governing principle but decided to ignore or pay no attention to it.” Id.

(quotation omitted). And even if the arbitrator understood—and ignored—

Texas law, “the award should be upheld unless it would result in significant 

injustice, taking into account all the circumstances of the case.” Williams v. 

Cigna Fin. Advisors Inc., 197 F.3d 752, 762 (5th Cir. 1999) (quotation omitted). 

 

(3) where 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 of any other misbehavior by 

which the rights of any party have been prejudiced; or

(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.

9 U.S.C. § 10(a).

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Razberi contends that vacatur is warranted because Texas courts have 

not required proof of causation for unjust enrichment, and the arbitrator 

denied its claim for failing to prove just that. But, as the district court 

observed, Razberi did not “present[] this law to the arbitrator or [show] that 

[he] was in some other way made aware of this law.” As a result, Razberi 

cannot demonstrate that the arbitrator knew the elements of an unjust 

enrichment claim, much less that he “decided to pay no attention to [them].” 

Brabham, 376 F.3d at 381–82. We thus agree with the district court that, in 

imposing a causation requirement, the arbitrator at most erred. “It is not 

enough,” however, for Razberi “to show that the [arbitrator] committed an 

error—or even a serious error.” Stolt-Nielsen, 559 U.S. at 671.

Nor has Razberi established that the award works a significant injustice. 

The arbitrator acknowledged that while unjust enrichment is an equity-based 

remedy, it is not a proper remedy “merely because it might appear expedient 

or generally fair that some recompense be afforded to an unfortunate loss to 

the claimant or because the benefits to the person sought to be charged amount 

to a windfall.” Austin v. Duval, 735 S.W.2d 647, 649 (Tex. App.—Austin 1987, 

writ denied). This shows the arbitrator—after a six-day hearing—weighed the 

equities and determined that the circumstances of this case did not warrant 

the relief Razberi sought. See Executone Info. Sys., Inc. v. Davis, 26 F.3d 1314, 

1321 (5th Cir. 1994) (“[A]rbitrators enjoy a broad grant of authority to fashion 

remedies . . . .” (quoting Totem Marine Tug & Barge, Inc. v. N. Am. Towing, 

Inc., 607 F.2d 649, 651 (5th Cir. 1979)). For example, he noted “there is no 

evidence in the record that during the time of Avigilon’s reassessment of 

Razberi, that DynaColor, Inc. prompted . . . or otherwise made any efforts to 

steer Avigilon away from Razberi. Avigilon made its decision to leave Razberi, 

and Razberi lost the Avigilon sales, due to Avigilon’s unilateral decisions . . . .” 

Given that the arbitrator did not appear inclined to award the equitable 

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remedy of unjust enrichment even apart from his causation ruling, no 

significant injustice will result from enforcing the award. 

In conclusion, even if manifest disregard remains a basis for vacating an 

arbitration award, Razberi has not shown such conduct by the arbitrator. The 

district court correctly confirmed the award.

AFFIRMED. 

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