FI L ED U.S. COURT OF A P P E A LS E LE V E N T H C IR C U IT DE CEM B ER 12, 2005 THOMAS K. KAH

N CL ERK [P UBL ISH] IN TH E U NITE D S TAT ES C OUR T OF AP PE ALS F OR TH E E LE V EN TH C IR C U IT

N o. 04- 1630 4 D. C. Docket N o. 04-20326 -CV -CMA DO N P EE BL ES , P la int if f- Appe llant, ve rs us MERRIL L L YN CH, PIE RCE , F EN NE R & SM ITH INCORPORATED, D efendant-Appellee.

Ap peal from the Un ited S tates D istrict C ourt for th e Sout hern Distr ict of F lorida (D ec em be r 12, 200 5) Before TJOF LAT and BA RKE TT, Cir cuit Jud ges, and FU LLER *, C hief Distr ict Judge.

____ __ ____ ____ ____ * Honora ble Mark E . Fuller , Chief United States District Judge f or the Middle District of Alabama , sitti ngby

desig nation.2

FU LLER , C hief D istrict Jud ge: Plaintiff-a

ppellant Don Peebles (“ Peebles”) sough t to vacate a z ero dollar ar bitratio n aw ar d by

f ili ng a P et iti on t o V ac at e A rb itr at ionA w ar d inthe Ci rc uit Co ur t o f th e Ele ve nt h J ud ic ia l Ci rcu it in an d fo r Mi am i-Da de Co un ty, Fl or id a. Contendin g that 28 U.S .C. § 1332 (a) provided a basis for f ederal subj ect m atter j ur isd ic tio n, D ef

en da nt- ap pe lle e Me rr ill L ync h, P ie rc e, F en ne r & S m ith Incorporated (“ Merr ill Ly nch”) re m oved the action to the United State s District Court for the Southern D istrict of Florida. Pee bles objected to the re m oval contendin g that the m inim um am ount in controversy

required for subject m atter j urisdictio n pursuant to 28 U.S .C. § 1332 wa s not m et. The district court entered a n o r d e r i n wh i c h i th e l dt h a ti th a ds ub je c tmat t e r

ju r i s d i c t i o n o v e r

t h e c a s e . B y a se pa rate or de r, the dis tr ic t c ourt de nie d P ee ble s’ pe tit ionto va cate the a rb itr at ion aw ar d. P ee ble s a

ppe al s th e dis tr ic t c ourt’ s j ur isd ic tio n r uli ng and the de nia l of

the petition to vacate the ar

bitration award. Bec ause we find that the dist rict court pr ope rl y de te rm ine d th at

it ha d su bj ec t m atte r j ur isd ic tio n ov er thi s c as e an d f

ind no e rr or in the dis tr ic t c ourt’ s de nia l of the pe tit ionto va cate the a rb itr at iona w ar d, we AF FIRM . I. BACKG ROUND Peebles is a r eal estate developer who w as a m em ber of sever al public-3

private partnerships that develop ed city -owned properties into hotels o r other uses an d wh o wo rk edon ot he r pr iv at e se ct orreal est at e d ev el op m en t o pp or tu ni ti es . Pe eb le s’ pr of

es sio n de m an de d th at

he ha ve f inanc ia l l iqu idi ty

to co m ply w ith gove rn m en t f

isc al m an da te s and those of c om m er ci al le nde rs . P ri or

to his re la tio nshi p w ithMe rr ill L ync h, P ee ble s ke pt h is f inanc es in lowr isk

pr oduc ts su ch as c ert ifi cat es of d ep os it or l ow- y ie ld m ut ua l fu nd s. InMay of 199 7, P ee ble s be ga n hi s r el at ion shi p w ithMe rr ill L ync h by openin g an account and engagin g the services of L ance Sla ught er ( “ Slaughter”),
w hom he m et thr oughaf

am ily m em be r. A t the ti m e the a cc ount w as ope ne d, Pe eb le s st at ed

a cc ount obj ec tiv es w er e tot al r et

ur n w ithar isk

tol er an ce of
m ode rate . P ee ble s a dvi se d S laught er that hi s pr of

es sio n r equir ed

him to ha ve re ad ily a va ila ble f unds a nd tha t he w as the re fo re r isk a ve rs e an d un w ill ing to inv es t i n hi ghl y

spe cu la tiv e se curi tie s. D ur ing the c our se of his r el at ion shi p w ith Sl au ght er a nd M er ri ll L ync h, P ee ble s w as inv olv ed in the m an ag em en t of

his in ve st m en ts an d e xe rci se d c on tro l o ve r hi s ac co un t. U nti l e ar ly

199 9, S laught er

inv es te d P ee ble s’ m one y in non- te ch nol ogy equities that m et Pee bles’ stated goals. Initially , S laughter recom m ended that Pe eb le s purc ha se larg e- ca p va lue sto ck s su cha s E as tm anK odak, G en er al Mo tor s, Ph il li p M or ris , 3M , Exx on , Sears , Am eri can Exp res s, Ch ev ro n, an d B oe in g.4

Peebles w as not enthu siastic about th ese re com m endations and rej ected them ind ic at ing that he w as loo kin g f or hig he r re tur

ns tha n su chinv es tm en ts w oul d y ie ld. P ee ble s in dic at ed

that he m ad e be tte r re tur ns o n hi s r ea l e sta te inv es tm en ts an d di re ct ed

S laught er

to loc at e a se le ct ionof

r ea l e sta te inv es tm en t tru sts f or his rev ie w. In 1998 and 1999 , P eebles began investin g in technol ogy stocks. Im

pressed by significant pu blicly

reported gains in the technolo gy sector, Pee bles expressed anint er es t i n su chsto ck s to S laught er . S laught er a dvi se d P ee ble s of

the r isk s associated with these investm ents as well a s with his invest m ent philo soph y . In 1999 , P ee ble s tr an sf

er re d m or e m one y

to Sl au ght er , a nd S laught er be ga n to pur ch as e hig hly

spe cu la tiv e te ch nol ogy

sto ck s. Whe n P ee ble s in qui re d a bout the se tr an sa ct ion s, S laught er tol d hi m that M er ri ll L ync h’ s to p ana ly sts hig hly re co m m en de d th e tr an sa ct ion s and tha t the se opi nio ns w er e ba se d onMe rr ill L ync h’ s in te rn et

r es earc h gr oup’ s r ep orts. L at er , P ee ble s le ar ne d th at Me rr ill L ync h kn ow ing ly

pr om ote d purc ha se s of

c er ta in s toc ks b y

iss uin g f al se ly favor ab le r ep orts a

bout c om pa nie s w hil e at

the sa m e tim e Me rr ill L ync h’ s banki ng div isi on w as a ct ing a s th e inv es tm en t banke r fo r the se c om pa nie s. A s ar es ult

of his r el ianc e on the se f

av or ab le r ep orts and h is i nve stm en ts i n th es e co m pa nie s,Th e thr us t of Pe e ble s’ c la ims a g a ins t Me rr ill Ly nc h is that he wa s d e fr a

ud e d b y Me rr ill 1 Ly nch by virtue of its use of a

stock ratingsy stem which did not ref lect its rese arc h analy sts’ true opinions of cer

tain companies a

nd that Merr ill L y

nch fa iled to disclose that the firm’s r ating s of technolog y

secur ities were tainted by undisclosed conf

licts of interest. The principal c halleng ed secur ities sold to P eeble s were 24/7 Media and A t Home (or E x cite@Home ). Peeble s claims that Me rr ill Ly

nc h r e se arc h a

na ly sts we re re c omm e nd ing“ buy s” on the se se c ur iti e s w hil e at th e same tim e pr ivate ly

e xpre ssi ngthe vie w that th e y we re no t g oo d inve stm e nts . 5 Pe eb le s su ff

er ed ove r $1, 000, 000 in l oss es . 1 I n J u l y o f 2 0 0 1 , P e e b l e s f

i l e daS t a t e me n to f

C l a i m an ds ub mi t t e dh i s c l a i ms ag ai ns t M erri ll Ly

nc h t o a rb it rat io n p ur su an t t o a n a gr eem en t b et ween th e p art ie s. Pe eb le s pr es en te d th e fo llo w ing c la im s: ( 1) vio la tio n of S ec tio n 51 7. 301 of

F lor ida St at ute s; ( 2) f ra ud and m isr ep re se nta tio n; ( 3) br ea chof f idu ci ar y duty ; ( 4) vio la tio n of

a rt ic le I II , S ec tio n 2 o f the N A SD ’ s R ule s of F ai r Pr ac tic e; ( 5) violatio n of NY SE Rule 405; (6) failure to supervise; (7) fa ilure to execute/breac h of c ontra ct ; and ( 8) una

uth or iz ed tr ad ing . T he c au se s of

a ct ionr el at e to the fo llo w ing a ct ivi tie s inP ee ble s’ a cc ount : ( 1) sa le of share s of sto ck of F rankl in Banc or p; ( 2) pur ch as e of

share s of num er ous sto ck s in cl udi ng – F ox Entertainm ent Gr oup, Inc. , R evlon, Inc. , S unbeam Corp., 24/7 Media, A t Hom e, Axt en t Tec h, Ay av a, Azu rix , BMC S of twar e, Eto y s, Gai le o In te rn at io na l, IXL E nte rt ai nm en t, N ove ll, L y co s, P eo ple S of t, Q ua lc om

m , a nd Y ah oo; a nd ( 3) pu rch as e o f Pat rio t Ho sp it al it y an d o th er u ns pe ci fie d re al est at e in ve st m en t t ru st s. In the Am ended Statem ent of Claim , P eebles requested com pensatory dam ages6

be tw ee n $1 , 000, 000 an d $2 , 000, 000, plu s in te re st, pun iti ve da m ag es , a tto rn ey s’ fees, the costs of the arbitration proceedings, includin g forum fee s and expert wit ne ss fees , and su ch ot he r rel ie f as is de em edfai r. Peebles’ claim s against Merrill L ynch wer e subm itted to a four-day ar bitratio n he ar ing be fo re a n N A SD pane l c om pose d of non -l awy er s inJul y

of 2003 . As part of his case in chief, Pee bles relied on evidence that Merrill L ynch had adm itted that it pu blish ed research re ports on two internet com panies that violated anti-fraud provisi ons of the federal sec urities laws and publish ed research re ports o n f

ive oth er int er ne t c om pa nie s th at

e xpr es se d vi ew s in co nsi ste nt w iththe an al y sts ’ pr iva te ly

e xpr es se d ne ga tiv e vie w s invio la tio n of N A SD a dve rt isi ng ru le s. Me rr ill L ync h ha d publi she d r es ea rc h r ep orts o n 24 /7 M ed iaI nc . a nd E xc ite @ H om e tha t vi ola te d N A SD ’ s a dve rt isi ng r ule s a s w el l a s N A SD ’ s r ule r equir ing
m em be rs to obse rv e hig h st an da rd s of c om m er ci al hon or

a nd j ust a nd e qui ta

ble pr inc ipa ls o f tr ad e. Me rr ill L ync h f ai le d to sup er

vis e its r es earc h ana ly sts in re la tio n to int er

ne t se curi tie s and i ts s y ste m s w er e ina de qua te to pr ev en t vi ola tio ns of the lawand NA SD rules. Merr ill Ly nch had vio lated specific f ederal sec urities law s and N A SD r

ule s by it s c ondu ct

inc lud ing it s f

ai lur e to s upe rv ise a nd m an ag e the c onf lic ts o f int er es t tha t i ts r es earc h ana ly sts ha d du e to undue inf lue nc e fr om the inv es tm en t banki ng s ide of the f irm . S laught er

ha d pr ovi de d P ee ble s w ith7

re se ar chr ep orts f

or the c om pa nie s inw hic h he ha d in ve ste d in cl udi ng 2 4/7 Me dia an dEx ci t e @ Ho m e. Pe eb l es cl ai m ed h e r el i ed o n t h e r ep o rt s an dSl au g h t er ’s recom m endations in deciding to purchase these stocks and h old th em , which cau se d h im

to lo se m on ey . Part of Me rr ill L ync h’ s de fe nse a t the a rb itr at ionhe ar ing w as ba se d ona de ci sio n and o rd er

e nte re d inac as e in the U nit ed S ta te s D istri ct

Co urt f or the Southern District of N ewYork a bout a w eek before the arbitration hearing called In re Me rr il l Ly nc h, In c. Rese ar ch Repo rt s Sec. Li ti g., 273 F. S upp. 2d 3 51 (S . D . N . Y . 200 3) . Me rr ill L ync h m en tio ne d th is d ec isi on i n bo th i ts o pe nin g sta te m en t and i ts c los ing a rg um en t. P ee ble s ha d an op portun ity to ex pr es s to the arbitration panel his vi ewthat the case did not sup ply the appropriate legal an al y si s fo r cl ai m s o f th e type h e h adbro ug ht . O n Ju ly 16, 200 3, the a rb itr at ionpane l i ssu ed az er o do llar ar

bitratio n aw ard. Specif

ically , the arbitration awar d dism issed all of Peebles’ claim s, denied al l r eque sts f

or a tto rn ey s’ f

ee s f ro m P ee ble s and M er

ri ll L ync h, de nie d P ee ble s’
r e qu e s t s f o r r e l i e f p u r s u a n tt o F l o r i d aS t a tu t e s c h ap t e r 5 1 7 , a n dd e n i e da l l c l a i ms for re lief including Pee bles’ claim s for punitiv e dam ages. The arbitration panel di d n ot st at e a b as is forit s awa rd . On O ctober 10, 2003, Pee bles filed a Petition to Vacate A rbitration Aw ard8

in the Ci rc uit

Co urt of the E le ve nthJud ic ia l C ir cu it in and f or Mi am i- D ad e Co unty , F lor ida . I n th e Pe tit ionto V ac at e A rb itr at ionA w ar d, P ee ble s arg ue d: ( 1) tha t the a rb itr at ionpane l m an if es tly dis re ga rd ed

appl ic ab le law ; ( 2) that the decision of the panel was ar bitrary and capricious; and (3) that the award wa s pr oc ur ed by und ue m eans. P ee ble s sp ec if ic al ly r eque ste d th at

the a rb itr at ion aw ard be vaca ted, the m atter r em anded to the NAS D f or a newhearing before a ne w arb it rat io n p an el , and su ch ot he r rel ie f as th e co ur t d eem edap pr op ria te . Purs ua nt t o 28 U . S. C. §§ 1 332 an d 14 41, Me rr ill L ync h r em ove d th e ca se to the United States D istrict Court for the Southern D istrict of Florida. Pee bles obj ec te d to the r em ova l c ont en din g th at the m ini m

um a m ount in co ntr ove rs y req ui redforsu bjec t m at te r juri sd ic ti on pu rs ua nt to 28 U.S.C. § 1 33 2 was no t m et . A ft er takin g arg um en t f

ro m the part ie s onthe iss ue , the dis tr ic t c ourt he ld tha t the
m ini m um a m ount in co ntr ove rs y

f or div er sity j ur isd ic tio n w as m et

be ca use Pe eb le s no t on ly

sou ght to va cate the z er o do llar ar bitratio n aw ar d, but

a lso requested a newhearing wher e a diff erent panel w ould be urged to award Pee bles up to $2 ,00 0,0 00 in co m

pe ns at or y da m ag es . O n N ove m

be r 1, 200 4, the dis tr ic t c ourt de nie d P ee ble s’ pe tit ionto va cate the arbitration award. Noting that the judicial reviewof arbitra tion awards w as ex tr em el y narr ow , the dis tr ic t c ourt r ej ec te d e ac h of the thr ee gr ound s a dvanc ed in9

the petition . The sole statutory ground for the petitio n was that the aw ard w as procured by

undu e m eans; essentially Pee bles argued that Merrill L ynch m isled the panel about th e lawand that constituted und ue m eans. The district court ex pla ine d th at

und ue m eans m eant b ri be ry , c or ru pti on, or phy sic al thr eat and rej ected Pe ebles’ contention that there had been undue m eans. The district court he ld tha t be fo re it

c oul d turnto the non -s ta tut or y gr ound s pr opos ed

by P ee ble s, it
m ust be sa tis fi ed

that P ee ble s ha d de m onstrate d th at the re w as no p ro pe r ba sis f or the a w ar d, w hic h is hard

to do w he n, a s he re , the a rb itr at ionpane l di d no t pr ovi de a ra tionale for the aw ard. When there is no rationale set forth, the district court ex pla ine d th at

the onu s is on the party

r eque sti ng v ac at

ur to re fu te e ve ry

pos sib le rational basis on which the ar bitrator could have granted relief. T he district court found th at Pee bles’ argum ents wer e m ere repetitions of the argum ents m ade before the arbitration panel and did not satisfy the standard required for the district court to a ddr es s any

of P ee ble s’ non -s ta tut or

y gr ound s f

or va catin g th e ar

bitratio n aw ard. Specif

ically , the district court found that Peebles fa iled to dem onstrate that the re w as no r at ion al ba sis upo n w hic h th e aw ar d c oul d have be enba se d. T he district court nevertheless presented an alternative holdin g by review ing Peebles non- sta tut or

y gr ound s ( aw ar d w as ba se d onm an if es t di sr eg ar d f

or the lawor award was a rb it rary andcap ric io us ) an d d en ie d v acat urba se d o n t he m as we ll .10

Pe eb le s f ile d ati m el y

not ic e of appe al on N ove m

be r 30, 200 4. O n a

ppe al , Peebles asserts that: (1) the district court lacked subject m atter j urisdictio n over the case; and (2) the district court er red w hen it held th at the arbitration aw ard ne edno t b e v acat edon th e b as is of a m an ife st di sr eg ardof t he law.

II. ST AN DA RD S OF RE VIEW The E leventh Circuit Court of Appeals re views rulings on th e subjec t-m atter j ur isd ic tio n of

af ed er al c ourt de nov o. Se e, e . g. , M ac G inn iti e v. H

obbs G roup , LLC, 420 F. 3d 1 234, 123 9 ( 11th C ir . 200 5) ; W illiams v. B est Buy Co., Inc. , 269 F.3 d 1 31 6, 1 31 8 (1 1t h C ir. 2 00 1) . T he E le ve nthCi rc uit

Co urt of Appe al s r ev ie w s or de rs c onf irm ing ar bitratio n aw ar ds f

or c le ar e rr or w ithr es pe ct

to fa ct ua l f ind ing s and de nov o w ith res pe ctto th e d is tri ctco ur t’s l eg al co nc lu si on s. See, e. g., Gianelli Money Pur ch as e Pla n & Tru st

v. ADM Inve st or

Se rvs., In c., 146 F. 3d 1 309, 131 1 ( 11th Ci r. 199 8) ; Mon te s v. S

he ar so n L eh man Bro s., In c., 128 F. 3d 1 456, 145 9 n. 3 ( 11th Ci r. 19 97 ). III. D ISCU SSION A . S ub je ctM at te r Ju ri sd ic ti on The F ederal A rbitration Act does not confer subje ct m atter j urisdictio n over petition s to vacate ar

bitration awards, nor does it create independent federa lPeebles is a c itiz en of F lorida. F or purpose s of the dete rmining dive rsity jurisdiction, 2 Me rr ill Ly

nc h is a c iti zen of De lawa re , whe re it i s in c or

po ra te d, and Ne w Y or k, wh e re it h a s it s pr inc ipa l pl a c e of

bu sin e ss. 11 qu es ti on juri sd ic ti on . Se e Bal ti n v . Ala ro n T ra di ng Co rp ., 128 F. 3d 1 466, 146 9 (1 1t h C ir. 1 99 7) , cer t. d

en ie d, 525 U . S. 841 ( 1998 ). I nde pe nde nt g ro unds f or su bjec t m at te r juri sd ic ti on m us t b e d em on st rat ed . Id
. When Merrill L ynch rem oved thi s action to the United States D istrict Court for the Southern D istrict of Florida, it argued that the court had subject m atter juri sd ic ti on ov er t hi s ac ti on pu rs ua nt to 28 U.S.C. § 1 33 2. Pu rs ua nt to 28 U.S.C. § 1332 , dis tr ic t c ourts h av e or igi na l su bj ec t m atte r j ur isd ic tio n ov er c ivi l a ct ion s w he re the a m ount

in co ntr ove rs y

e xc ee ds the sum

or va lue of $75 , 000 an d th e act io n i s b et ween cit iz en s o f di ffer en t s ta te s. See 28 U . S. C. § 13 32( a) (1 ). I n th is ca se the re is no d isp ute c onc er nin g w he the r the a ct ionis be tw ee n c iti ze ns o f differe nt states. T he sole issue relating to s ubjec t m atter j urisdictio n is whether 2 th e am ou nt in co nt ro ve rs y ex ceed s $ 75 ,00 0. A t i ssu e is whe the r the a m ount in co ntr ove rs y

is co ntr oll ed

by the a m ount cl ai m edby Peebl es in hi s o rig in al act io n o r th e am ou nt of t he arb it rat io n a ward . Peebles contends that he seeks no m onetary relief by this action and th at the rea l re lie f he se ek s is ane wa rb itr at ion . P ee ble s arg ue s th at in al l m atte rs inv olv ing pe tit ion s to va cate a rb itr at iona w ar ds, the a m ount in co ntr ove rs y

is al w ay s th e12

am ount of the a rb itr at iona w ar d and n ot the a m ount sou ght in the und er ly ing ac tio n. I n su

ppor t of his a rg um en t, P ee ble s r el ie s on B alt in v
. A lar on T radi ng Co rp ., 12 8 F .3d 14 66 (11 th Cir . 19 97 ). O n th e oth er

hand, Me rr ill L ync h c ont en ds tha t be ca use P ee ble s se ek s to vacate the z ero dollar ar

bitration award and have the case re m anded for a new arbitration before a

differ ent panel who would consider his request for dam ages be tw ee n $1 , 000, 000 an d $2 , 000, 000, the a m ount in co ntr ove rs y

r equir em en t i s sa tis fi ed by the sum sou ght in his state m en t of

c la im . P ut anothe r w ay , Me rr ill Ly nch contends that in cases, such as this one, in w hich a party is seeking a new oppo rt uni ty to pur sue ac la im

f or a n a m ount

in ex ce ss o f $75, 000, that am ount a nd no t t he arb it rat io n a wardis th e am ou nt in co nt ro ve rs y . Thi s i ss ue is a m at te r of

fir st im pr es si on for

th is co ur t. B alt in doe s no t spe ak to the iss ue r ai se d he re be ca use “ the m ax im

um r em edy sou ght ” by

the investo rs w as the vacatur of the arbitration awar d against them that did no t exceed the m ini m

um r equir ed to sa tis fy 28 U . S. C. § 13 32. 128 F . 3d a t 14 72. H er e the
m axim um rem edy Pee bles sou ght was vacatur of a zer o doll ar arbitration awar d and a newarbitration hearing at w hich he could u rge his argum ent that he was entitled to u p to $2 ,000,000 in dam ages. W e hold that a federa l court has subject
m atte r j ur isd ic tio n w he re aparty se ek ing to va cate a n arb itr at iona w ar d is a lso13

se ek ing ane wa rb itr at ionhe ar ing a t w hic h he w ill de m an d asum w hic h e xc ee ds the a m ount

in co ntr ove rs y

f or div er sity j ur isd ic tio n purp ose s. T his appr oa chis co nsi ste nt w iththe appr oa chtake n by oth er c ir cu its that have ha d oc ca sio n to ad dr es s t hi s q ue st io n. Se e, e.g ., The is Rese ar ch , Inc . v. Bro wn & Bai n, 400 F. 3d 659 (9 th C ir . 200 5) ; Bull H N Info. Sys. , I

nc. v . H uts on , 229 F. 3d 32 1 (1st Cir. 20 00 ). W e co nc lud e tha t i n th e pr es en t c as e the m one tary thr es hol d of

$75 , 000 fo r div er sity j ur isd ic tio n un de r 28 U . S. C. § 13 32( a) ha s be enm et . T he re is no d isp ute as to the diversityof the parties. T he district court, there fore, had subject m atter juri sd ic ti on pu rs ua nt to 28 U.S.C. § 1 33 2. B. Re view of th e R efusal to V acate th e A rbitr ation Awa rd Pe eb l es al s o ap p ea l s t h e d i s t ri ct co u rt ’s re fu s al t o v ac at e t h e a rb i t ra t o r’s aw ar d, a rg uin g th at

the a w ar d e vid en ce d am an if es t di sr eg ar d of

the law . P ee ble s, how ev er , be ar s anot

ins ign if ic an t burd enof

a sse rt ing suf

fi ci en t gr ound s to va cate the award. “ The F ederal A rbitration Act ( “ FA A” ) provides that a federa l district co urt c anva cate a n arb itr at iona w ar d, but onl y in ex tr em el y

narr ow circum stances.” Gia ne ll i Mo ne y Pur ch as e Pla n & Tru st , 146 F. 3d a t 13 11 ( ci tin g 9 U.S.C. § 10 ). Ind eed , gre atde fere nc e is affo rd edto arb it rat io n a ward s. A c ourt r ev ie w ing ape tit ionto va cate a n arb itr at iona w ar d m ay be a ske d toPursuant to the Fe dera l Arbitration Act, a court may

vacate an a

rbitration awa

rd in the 3 fo llo wi ngfo ur

c ir c ums tanc e s: (1) Where the awa

rd wa s procur ed by

corr uption, fraud, or

undue means. (2) Where there was e vident partiality or cor ruption of the arbitrators, or either

of them. (3 ) Wh e re the arb itr ator s w e re g uil ty of mis c on du c t in

re fu sin gto postpone the hea

ring , upon sufficie nt cause shown, or in re fusing to hear evidenc e per

tinent and mater ial to the controve rsy ; or of any other misbehavior

by which the r ights of a

ny party have be en prejudice d. (4 ) Wh e re the arb itr ator s e xce e de d th e ir po we rs , o r s o im

pe rf e c tly executed them that a mutual, f inal and def

inite awar d upon the subject matter submitted wa s not made. 9 U.S.C. § 10(a). When the case was pe nding be fore the district court, Pee bles also ar g ued that the 4 arbitration awar d was a

rbitrar y and ca pricious. The district c ourt reje cted this contention. Peebles did not cha lleng e this aspec t of the district court’ s ruling in his openingbrief a nd has waived this g round for

appea l. 14 ex am ine the f

our statut or y gr ound s f

or va catin g arb itr at iona w ar ds s et f orth i n 9 U . S. C. § 10 (a ). Whil e Pe eb le s ur ge d on e of the f our statut or y gr ound s be low , he 3 ha s no t c ha lle nge d th e portio n of the dis tr ic t c ourt’ s de ci sio n r ej ec tin g hi s argum ent for vaca tur pursuant to that ground . In addition to the four statutory ground s, the E leventh Circuit Court of Appeals has re cognized three non-statuto ry ba se s f or va catur of a n arb itr at iona w ar d. T he a w ar d m ay be va cate d ( 1) if

it is ar bitrary a nd c ap ri ci ous, ( 2) if

it s e nf or ce m en t i s c ontrary

to publ ic pol ic y , or

( 3) if it ev in ces a m an ife st di sr eg ardof t he law. M ont es , 128 F . 3d a t 14 58- 59, 146 1- 62. Pe eb le s’ sol e non- sta tut or y a rg um en t onappe al is tha t the a rb itr at ion 415

pa ne l’ s de ci sio n e vin ce s m an if es t di sr eg ar d f

or the law . Whil e the lawof the ci rc uit doe s r ec ogni ze that an arb itr at ionde ci sio n c anbe va cate d if the a rb itr at or s, in m ak ing the ir

de ci sio n, a ct ed

in m an if es t di sr eg ar d of

the law , ali tig an t arg uin g that an arbitrator ac ted in m anifest disregard of the lawm ust sh ow som ething m ore than am isi nte rp re ta tio n, m iss ta te m en t, or m isa ppl ic at ionof

the law . Am an if

es t dis re ga rd f or the lawinv olv es ac onsc iou s and d el ibe rate de ci sio n to ign or e the applicable law. “ Consequent ly , ‘ there m ust be som e showing in the record, other than th e re sul t ob ta ine d, that the a rb itr at or s kn ewthe lawa nd e xpr es sly disregarded it.’ ” U

niv er sit y Co m m ons- U

rban a, L td. , v . U

niv er sal Co nstruc tor

s In c., 304 F. 3d 1 331, 133 7 ( 11th C ir . 200 2) ( quot ing O. R. Sec. , I nc. v . Prof’l Pla nn in g As so cs ., Inc ., 857 F.2d 742 , 747 (11th Cir. 1988)). W e fi nd n o e rr or

in the dis tr ic t c ourt’ s de te rm ina tio n th at the re w as no ev id en ce t o s ug ge st th atth e arb it rat io n p an el de li be rat el y ig no redrel ev an t l aw. At
m ost , the a rb itr at ionpane l m ay ha ve m isunde rs too d th e ef fe ct a nd w ei ght

to be giv ento ca se s c ite d by

the part ie s. O n th e re co rd be fo re us, w e cannot

f ind pr oof th atth e arb it rat or s re co gn iz eda cl ear rul e o f la w and ch os e to ig no re i t. T he re fo re , w e cannot

f ind that the a rb itr at or s a ct ed in m an if es t di sr eg ar d f

or the la w.16 IV. C ONC LUS ION T he dis tr ic t c ourt pr ope rl y de te rm ine d th at

28 U . S. C. § 13 32( a) pr ovi de s a basis for feder al subjec t m atter j urisdictio n over this action. Moreover, the district co ur t p ro pe rly fou nd th atth e arb it rat io n a wardsh ou ld no t b e v acat ed . Ac cordingly , w e AFFIRM.