This case raises questions regarding the scope of federal court review of a decision issued by an arbitral panel. We resolve the case through the application of the familiar principle that the scope of such review is highly constrained. This is especially true with regard to an arbitral panel’s assessment of whether the documentary and testimonial evidence presented to it is sufficient to satisfy a particular legal claim. Federal district judges are, of course, highly skilled in matters of weighing evidence. As illustrated by the result we reach here, however, district judges must put these skills aside when faced with the question of whether a decision issued by an arbitral panel should be confirmed.
PACTS
A. The Buttars’ Claim.
Daljit and Paramjit Buttar, who are husband and wife, are residents of Raleigh, North Carolina. Daljit Buttar (hereafter “Dr. Buttar”) is a physician specializing in neurology, and is currently in solo practice.
All controversies which may arise between us concerning any transaction, or the construction, performance or breach of this or any other agreement between us, whether entered into prior, on, or subsequent to the date hereof, shall be determined by arbitration in accordance with the Federal Arbitration Act to the fullest extent permitted by law. The arbitration shall be determined only before and in accordance with the rules then in effect of either the New York Stock Exchange, Inc., or the National Association of Securities Dealers, Inc. or any other exchange or self-regulatory organization of which [Montrose is] a member as I may elect. The award of the arbitrators, or of the majority of them, shall be final ....
We note that, immediately preceding the arbitration clause, the application sets forth the following “understanding” in bold lettering: “The arbitrator’s award is not required to include factual findings or legal reasoning and any party’s right to appeal or to seek modification of rulings by arbitrators is strictly limited.”
Soon after opening this initial account, Dr. Buttar also began to discuss his investments with Robert Winston. Winston’s actual responsibilities at Montrose are not entirely clear from the record, but Dr. Buttar testified that Winston “talked to me like he was the owner” of the firm. Verma himself testified that while he worked at Montrose he was under the impression that Winston ran the firm.
Verma and Winston successfully urged Dr. Buttar to make substantial investments in the securities of two firms: (1) Skynet Holdings, Inc. (“Skynet”) and (2) CNF Technologies (“CNF”). Dr. Buttar was also persuaded to provide a “bridge loan” to CNF in the amount of $150,000.00. Eventually, Dr. Buttar alleges, Montrose “had invested virtually all of [his] liquid assets in CNF and Skynet.” It is undisputed that Dr. Buttar suffered substantial losses as a result.
B. The Arbitration Proceeding.
On September 11, 2000, the Buttars instituted an arbitration proceeding by filing a statement of claim with the National Association of Securities Dealers, Inc. (“NASD”), which names Montrose and Winston as respondents. The statement of claim alleges that Winston and Verma made numerous false statements to Dr. Buttar regarding the wisdom of investing in Skynet and CNF. These included characterizing Skynet as “a long-term safe investment” when it was in fact “a thinly traded bulletin board stock,” falsely representing that Skynet’s immediate prospects were particularly favorable because it “was in the process of a buyout by Federal Express,” and assuring Dr. Buttar that the principal amount of his loan to CNF would be returned to him “plus ten percent within two months, ‘guaranteed.’ ” The But-tars sought compensatory damages in the amount of $1,375,000.00 and an unspecified amount of punitive damages.
The Buttars filed an amended statement of claim with the NASD on March 9, 2001,
Respondents Wallace, Jacaruso and Scotti are hable as control persons of Respondents Montrose, Winston and Verma. See 15 U.S.C. § 78t(a); 15 U.S.C. § [77o 1 ]; [North Carolina General Statute] § 78A-56(a)(2)(c) ....
* * * * * *
Respondents possessed the power to control and supervise the operations of Montrose, Winston and Verma and knew or should have known that Montrose, Winston and Verma were handling Claimants’ accounts in an unsuitable manner, maMng unauthorized trades [and] were making misrepresentations to Claimants. Respondents, as control persons, failed to properly superivse the activities of Montrose, Winston and Ver-ma, but benefited from the improper and illegal activities conducted by Mont-rose, Winston and Verma.
* * * * * *
.... Respondents Montrose, Wallace, Jacaruso and Scotti are responsible for the wrongdoing of its registered representatives due to the doctrine of respon-deat superior, for failing in all respects to supervise the account activity. Respondents Wallace, Jacaruso and Scotti are hable as control persons.. The conduct of respondents violated the federal securities laws, state statutory and common law, and the rules and regulations of the National Association of Securities Dealers, Inc. and the securities industry.
The Buttars’ claim was assigned to a three-person arbitration panel (“the Panel”). None of the Panel’s members is an attorney, but they are all seasoned business executives with substantial experience as arbitrators. On May 29, 2001 the Panel granted Winston’s motion, which was joined by Wallace, Jacaruso, and Scotti, to assert a third-party claim against Verma.
The Panel conducted a three-day hearing on the Buttars’ claim in November 2001. Although they were all represented by counsel at the hearing, Winston, Jaca-ruso, and Scotti chose not to appear in person and did not give any testimony. Wallace was also represented by counsel and testified very briefly by telephone.
A central issue on this appeal is whether the Panel could conclude that Wallace, Ja-caruso, and Scotti are liable to the Buttars as control persons of Montrose. During his opening statement to the Panel, counsel for Wallace, Jacaruso, and Scotti denied that the three men could be found liable as control persons and alerted the Panel to his intention to move for dismissal on this ground at the close of evidence. This motion was in fact made, but the Panel declined to rule on it “until all of the various written pleadings and memoranda have been reviewed.” The Buttars submitted a post-hearing memorandum to the Panel which sets forth the basic principles of control person liability under North Carolina and federal law. Counsel for Wallace, Jacaruso, and Scotti, however, submitted a post-hearing memorandum which is notable for its use of invective, but which is almost completely devoid of legal discussion of any type. It devotes slightly more than one-half of a page to the law of control person liability, and does not discuss North Carolina law at all. The But-tars and Wallace, Jacaruso, and Scotti also
The evidence before the Panel regarding the status of Wallace, Jacaruso, and Seotti as control persons was neither non-existent nor overwhelming. In the first place, documents filed by Montrose with the Securities and Exchange Commission tend to support a finding of control person status. On a “Form BD”' — a Uniform Application for Broker-Dealer Registration — filed by Montrose in May 1999, Wallace is identified as the firm’s president. On the same form, Jacaruso and Seotti are identified as directors who each owned a 50% share of Montrose, but only Wallace is actually identified as a “control person.” On an amended Form BD, however, dated November 11, 1999, Jacaruso and Seotti are listed as each owning a 25% to 50% interest in Montrose and each, along with Wallace, is listed as a “control person.” Two subsequent Form BD amendments, dated December 17, 1999 and December 21, 2000, repeat this listing.
The Panel also heard the testimony of Michael Kavanagh, a stockbroker who came to work at Montrose upon a promise that he would be given a 5% ownership interest in the firm. Kavanagh testified that upon his arrival at Montrose, Winston urged him to buy Skynet and CNF securities for the accounts of the clients he had brought with him to the firm. Upon meeting with representatives of both companies, however, Kavanagh decided that he “wasn’t too impressed with either one of them.”
As time went on, Kavanagh became increasingly concerned that other brokers at Montrose “were being forced [by Winston] to buy ... securities] that they didn’t want to buy for their customers.” Kav-anagh testified that he eventually brought his complaints about Winston’s conduct to Jacaruso, whom he identified as “the Chairman” of Montrose. Kavanagh recalled that Jacaruso “made an agreement with me that he was going to deal with this Robert Winston issue” and that Jacaruso told him “[j'just don’t pay any attention to Robert’s antics, and I’ll take care of it.” Kavanagh also averred that Winston’s misconduct was “the topic of numerous conversations on my part in the partners’ meetings,” and that such meetings “were really never held without all the partners there.” Nowhere in his testimony does Kavanagh state that his complaints about Winston were ever acted upon. Kavanagh eventually left the firm, testifying that he did so because “Montrose is a criminal activity. It’s a pump and dump operation. It’s a fraud. It’s a scam .... ”
Dr. Buttar himself testified that, prior to filing the arbitration claim, he had never heard of Wallace, Jacaruso, or Seotti. The Buttars also offered the testimony of William Collison as an expert witness in securities investing. With respect to the responsibility of Jacaruso and Seotti for the losses suffered by the Buttars, Collison testified that “they are directors of the firm. They are on the Form BD [as] the owners of the firm and ... responsibility for what goes on in that firm ultimately rests with them.” Collison further declared that Jacaruso and Seotti “as owners of the firm acquiesced, approved, sanctioned, use whatever term pleases you, the activities of Mr. Winston .... ” Collison also testified, however, that he had no basis for concluding that Jacaruso and Seotti had- actual knowledge of the trades being made in the Buttars’ particular accounts.
As already noted, Jacaruso and Seotti did not testify before the Panel. Wallace, however, testified that he “was in control of everyone performing their functions” at Montrose. Wallace also acknowledged
C. The Panel’s Award.
The NASD served all parties with a copy of the Panel’s determination of the Buttars’ claim (“the Award”) on March 8, 2002. On December 7, 2001 the U.S. District Court for the Southern District of New York had issued a stay of all legal proceedings against Montrose pursuant to § 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a). Accordingly, the Award states that the Panel “made no determination with respect to the claims asserted against” Montrose, but that the stay “does not apply to Respondents Winston, Wallace, Scotti and Jacaruso.”
The Award contains no factual findings beyond briefly outlining the terms of the parties’ claims and defenses. The determination of liability is set forth in relevant part as follows:
1. The Panel finds Respondent Winston liable for misrepresentation; unauthorized, unsuitable and over-concentrated trading in Skynet and CNF Technologies; and fraud. The Panel finds Respondents Wallace, Scotti and Jacaruso liable for fraud and also as “Control Persons”. See 15 U.S.C. 78t(a); 15 U.S.C. [77o 2 ]; [North Carolina General Statute] 78A-56(a)(2)(c).
2. Respondents Winston, Wallace, Scotti and Jacaruso are jointly and severally liable and shall pay to Claimants compensatory damages in the amount of $1,064,543.00, plus pre-judgment interest from June 1, 2000 through January 30, 2001 in the amount of $127,629.00. Post-judgment interest shall accrue in accordance with Rule 10330(h) of the [NASD Code of Arbitration Procedure].
3.Respondents Winston, Wallace, Scotti and Jacaruso are jointly and severally liable and shall pay to Claimants punitive damages in the amount of $604,805.00. The Panel finds Respondent Winston liable for punitive damages based upon the Panel’s finding of fraud. The Panel finds the control persons, Respondents Wallace, Scotti and Jacaruso, liable for punitive damages based upon the Panel’s finding of fraud. See Hunt v. Miller,908 F.2d 1210 , 1216 n. 15 (4th Cir.1990). “An employer is liable for an agent’s fraud when committed within the scope of the agent’s apparent authority, even when the principal did not know or authorize the commission of the fraudulent acts.” Also, “a master is liable for punitive damages awarded when the servant or agent causing the injury was acting in the course and scope of the master’s business.” See also Black’s Law Dictionary, 6th Ed.1991, 455ff. Post-judgment interest shall accrue in accordance with Rule 10330(h) of the [NASD Code of Arbitration Procedure.]
D. The District Court’s Decision.
The Buttars filed an action on June 3, 2002 in the U.S. District Court for the Eastern District of North Carolina seeking confirmation of the Award. Four days later, Wallace, Jacaruso, and Scotti filed actions to vacate the Award in the U.S.
The district court granted the motions to vacate the Award, and consequently denied the cross-motion to confirm the Award.
See Wallace v. Buttar,
The district court held that, in addition to the grounds for vacating an arbitration award set forth in the Federal Arbitration Act (“FAA”),
see
9 U.S.C. § 10, “the Second Circuit[] recognize[s] two additional bases for vacating arbitration awards: manifest disregard of the law and manifest disregard of the facts.”
Wallace,
The totality of the evidence ... overwhelmingly indicates that Wallace never dealt with the Buttars, lacked awareness of all wrongdoing in respondents’ account, [and] had no duty nor reason to educate himself of the activity in the Buttars’ accounts .... There was no evidence of any action taken by Jacaruso and Scotti in connection with the transactions in which Winston defrauded the Buttars.
Clearly the arbitrators could not have found that Wallace, Jacaruso and Scotti possessed the requisite intention to defraud the Buttars without manifestly disregarding this evidence, or lack of evidence.
Id. at 394-95.
Finally, the district court held that the Panel manifestly disregarded the law and the evidence by holding Wallace, Jacaruso, and Scotti liable as control persons because “[t]he Buttars rely solely on Wallace’s status as President and Jacaruso and Scotti’s designation as a control person of Montrose.”
Id.
at 396. The district court observed, however, that status alone does not suffice to make one liable as a control person. Rather, “the control person must additionally possess the necessary mental culpability by either knowing, or failing to know due to their [sic] own recklessness or negligence, of the alleged wrongdoing.”
Id.
at 395. Upon its review of the evidentiary record, the district court found “[n]o evidence [had been] adduced that the Petitioners were involved in the allegedly unsuitable and unauthorized transactions in the Buttars’ accounts.”
Id.
DISCUSSION
‘When a party challenges the district court’s review of an arbitral award under the manifest disregard standard, we review the district court’s application of the standard
de novo.'” The GMS Group, LLC v. Benderson,
A. The Scope of Federal Court Review of an Arbitration Award.
A motion to vacate filed in a federal court is not an occasion for
de novo
review of an arbitral award. “It is well established that courts must grant an arbitration panel’s decision great deference. A party petitioning a federal court to vacate an arbitral award bears the heavy burden of showing that the award falls within a very narrow set of circumstances delineated by statute and case law.”
Duferco Int’l Steel Trading v. T. Klaveness Shipping A/S,
1. Manifest Disregard of the Law.
Our circuit has long held that “[a]n arbitration award may be vacated if it exhibits ‘a manifest disregard of the law.’ ”
Goldman v. Architectural Iron Co.,
An arbitral award may be vacated for manifest disregard of the law “only if ‘a reviewing court ... find[s] both that (1) the arbitrators knew of a governing legal principle yet refused to apply it or ignored it altogether, and (2) the law ignored by the arbitrators was well defined, explicit, and clearly applicable to the case.’ ”
Banco de Seguros del Estado v. Mutual Marine Office, Inc.,
In sum, a court reviewing an arbitral award cannot presume that the arbitrator is capable of understanding and applying legal principles with the sophistication of a highly skilled attorney. Indeed, this is so far from being the case that an arbitrator “under the test of manifest disregard is ordinarily assumed to be a blank slate unless educated in the law by the parties.”
Goldman,
Our eases demonstrate that we have used the manifest disregard of law doctrine to vacate arbitral awards only in the most egregious instances of misapplication of legal principles. In
New York Telephone Co. v. Communications Workers of America Local 1100,
In
Hardy v. Walsh Manning Securities, L.L.C.,
Finally, we note that raw numbers demonstrate the rarity with which we have vacated an arbitral award pursuant to the manifest disregard of law doctrine. In
Duferco,
decided in 2003, it was calculated that “since 1960 [this Court has] vacated some part or all of an arbitral award for manifest disregard in ... four out of at least 48 cases where we applied the standard.”
2. Manifest Disregard of the Evidence.
Citing
Halligan v. Piper Jaffray, Inc.,
In
Halligan,
we reviewed a district court’s confirmation of an arbitration award which rejected an employment discrimination claim. We reversed, finding that the award had been made in the face of “overwhelming evidence” that discriminatory conduct had occurred.
Our later cases, however, have cautioned against an over-broad reading of
Halligan.
In
GMS Group,
we noted that
Halligan
confronted “the unique concerns at issue with employment discrimination claims.”
Further, in
Westerbeke
we explicitly characterized
Halligan’s
suggestion that arbitral awards may be vacated on the ground of manifest disregard of evidence as dicta.
Halligan presented the special circumstance in which the arbitration tribunal did not issue a written explanation of its factual findings. The reviewing court was therefore placed in the situation of attempting to discern what possible findings the arbitrators could have made that would justify their disposition of the case. Unable to come up with any findings that would not “strain credulity,” the court concluded that the tribunal must have “manifestly disregarded the law or the evidence or both.” [Halligan,148 F.3d at 204 .] Halligan does not stand for the proposition that factual findings put on the record by the arbitrator are subject to an independent judicial review, however.
Id. (first emphasis in original; second emphasis added).
Moreover, if a federal court is convinced that an arbitral panel has reached a merely incorrect legal result — that is based upon an irrational application of a controlling legal principle — the court should not conduct an independent review of the factual record presented to the arbitral panel in order to achieve the “correct” result. In
Hardy,
as set forth above, an arbitral panel, which had provid
The district court correctly found that a court must “confirm [an arbitrator’s] award if [it is] able to discern any color-able justification for the arbitrator’s judgment, even if that reasoning would be based on an error of fact or law.” Westerbeke,304 F.3d at 212, n. 8 . There may indeed be more than enough evidence in the record to find that Skelly should have been found primarily liable. But that is not what “the arbitrator’s judgment” is in the instant case. The arbitrator’s judgment is that Skelly was liable “upon the principles of respondeat superior,” and no one points us to any evidence in the record that provides a colorable justification for this conclusion.
Id. at 131.
In sum, “the Second Circuit does not recognize manifest disregard of the evidence as proper ground for vacating an arbitrator’s award.”
Success Sys., Inc. v. Maddy Petroleum, Equip., Inc.,
B. Is the Award Supported by a Color-able Justification?
1. Control Person Liability.
The Buttars alleged before the Panel that Wallace, Jacaruso, and Scotti were liable as control persons under both federal and North Carolina law. The district court acknowledged this,
Section 20 of the federal Securities and Exchange Act of 1934 provides for control person liability as follows:
Every person who, directly or indirectly, controls any person liable under any provision of this chapter or of any rule or regulation thereunder shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable, unless the controlled person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action.
15 U.S.C. § 78t(a).
North Carolina securities regulation statutes contain an analogous provision:
Every person who directly or indirectly controls a person liable under subsection (a), (b) or (bl) of this section, every partner, officer, or director of the person, every person occupying a similar status or performing similar functions, and every dealer or salesman who materially aids in the sale is also liable jointly and severally with and to the same extent as the person, unless able to sustain the burden of proof that the person did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist.
N.C.G.S.A. § 78A-56(e)(l).
In their post-arbitration brief to the Panel, the Buttars, citing our opinion in
SEC v. First Jersey Securities, Inc.,
In their post-arbitration memorandum to the Panel, as already noted, Wallace, Jacaruso and Scotti take notice of the requirements of control person liability under federal law, but they make no statement whatsoever regarding control person liability under North Carolina law. That
If a party fails to identify governing law to an arbitrator, “we will infer knowledge and intentionality on the part of the arbitrator only if we find an error that is so obvious that it would be instantly perceived as such by the average person qualified to serve as an arbitrator.”
Duferco,
“We do not sit in judgment over the wisdom of [an] arbitrator’s holdings.”
Westerbeke,
Considered as a whole, this evidence is sufficient to provide a colorable basis for control person liability under North Carolina law as that law was explained to the Panel by the parties. We therefore reject the contention of Wallace, Jacaruso, and Scotti that the Award was based on “the Panel’s own brand of frontier justice without regard to the law or facts.” Instead, we believe the Award is at least colorably based upon the facts and the law as presented to the Panel.
2. Liability for Punitive Damages.
The Award imposes joint and several liability against Winston, Wallace, Jacaruso, and Scotti for punitive damages in the amount of $604,805.00. The district court held that the Panel’s imposition of punitive damages against Wallace, Jacaruso, and Scotti was based upon the doctrine of respondeat superior. This, the district court concluded, amounts to a manifest disregard of law because “the doctrine of respondeat superior imposes liability on the employer of those committing fraud in their employment. The entity that could have been held liable for Winston’s fraud under the doctrine of respondeat superior was Montrose, Winston’s employer.”
First, we note that the Award does not explicitly mention the doctrine of respon-deat superior as the basis of the Panel’s imposition of punitive damages as to Wallace, Jacaruso, and Scotti:
3. The Panel finds Respondent Winston liable for punitive damages based upon the Panel’s finding of fraud. The Panel finds the control persons, Respondents Wallace, Scotti and Jacaruso, liable for punitive damages based upon the Panel’s finding of fraud. See Hunt v. Miller,908 F.2d 1210 , 1216 n. 15 (4th Cir.1990). “An employer is liable for an agent’s fraud when committed within the scope of the agent’s apparent authority, even when the principal did not know or authorize the commission of the fraudulent acts.” Also, “a master is liable for punitive damages awarded when the servant or agent causing the injury was acting in the course and scope of the master’s business.” See also Black’s Law Dictionary, 6th Ed.1991, 455ff.
As with the issue of control person liability, there is a considerable difference in the efforts made by the Buttars, on the one hand, and Wallace, Jacaruso, and Scot-ti, on the other, to educate the Panel as to the law of punitive damages. The Buttars provided the Panel with a copy of the
Hunt
opinion, in which the Fourth Circuit stated that “[p]unitive damages are not available under ... federal and North Carolina securities claims.”
Under North Carolina law, a finding of fraud is sufficient to support an award of punitive damages, and an employer is liable for an agent’s fraud when committed within the scope of the agent’s apparent authority, “even when the principal did not know or authorize the commission of the fraudulent acts.” Hunt v. Miller,908 F.2d 1210 , 1216 n. 15 (4th Cir.1990) (citing Newton v. Standard Fire Ins. Co.,291 N.C. 105 , 113-14,229 S.E.2d 297 , 302 (1976) and Norburn v. Mackie,262 N.C. 16 , 23,136 S.E.2d 279 , 284-85 (1964)).... In addition, a master is liable for punitive damages awarded when the servant or agent causing the injury was acting in the course and scope of the master’s business.” Hunt v. Miller, 908 F.2d 1210 , 1216 (4th Cir.1990) (quoting Mazza v. Medical Mut. Ins. Co.,311 N.C. 621 , 627,319 S.E.2d 217 , 221 (1984)).
The North Carolina cases cited in Hunt leave no doubt about this Panel’s authority to award punitive damages, or the liability of all Respondents for punitive damages. Winston is personally liable for punitive damages for his own fraud on the Buttars. Respondents Montrose, Jacaruso, Scotti, and Wallace are liable for punitive damages based upon the actions of their agents, Winston, Verma, and [Montrose broker John] Ferraro.
In contrast, Wallace, Jacaruso, and Scot-ti do not appear to have addressed the issue of punitive damages at all in their submissions to the Panel, and their argument as to the doctrine of respondeat superior is limited to the assertion in their reply memorandum that “the doctrine has been rendered irrelevant: by virtue of the District Court’s December 7, 2001 order staying all further proceedings against Montrose, Montrose can not be held liable for the acts of its employees even if those acts are found to be injurious.”
The shortcoming here is that Wallace, Jacaruso, and Scotti cite no evidence in the record which establishes that Winston’s employer was Montrose alone, or that Winston could not be found to have acted as an agent of Wallace, Jacaruso, and Scot-ti. As already noted, Winston’s status and responsibilities at Montrose are not entirely clear from the record. But the Panel had no argument before it to the effect that punitive damages could not be awarded against Wallace, Jacaruso, and Scotti because they did not have an employer-employee relationship with Winston, or because Winston could not be found to have acted as their agent.
Again, we do not sit in judgment of the wisdom of the Panel’s imposition of punitive damages upon Wallace, Jacaruso, and Scotti. But we find no basis for holding that this portion of the Award was based on a manifest disregard of the law because, given the manner in which the law of punitive damages was presented to the Panel, we cannot find that they committed “an error so obvious that it would be instantly perceived as such by the average person qualified to serve as an arbitrator.”
Duferco,
3. Liability for Fraud.
The district court found that, to the extent that the Award makes Wallace, Ja-caruso, and Scotti primarily liable for securities fraud as co-conspirators with Winston, it manifestly disregards the law.
C. Confirmation of the Award as to Winston.
Finally, the Buttars argue that the district court erred in declining to confirm the Award’s finding of liability against Robert Winston. As already noted, Winston brought no action to vacate the Award and his time to do so has elapsed. See 9 U.S.C. § 12 (party must move to vacate, modify, or correct award within three months of the award’s issuance). He has also filed no opposition to the Buttars’ cross-motion to confirm the Award.
We have made clear that “a party may not raise a motion to vacate, modify or correct an arbitration award after the three month period has run, even when
Winston was not a petitioner below, and he is not an appellee here. Indeed, it is unclear from the record whether the But-tars served Winston when they sought- to have the Award confirmed. In its opinion, the district court made no statement as to whether the Award against Winston should be confirmed. Nevertheless, the Buttars’ cross-motion below sought confirmation of the Award in full. In addition to granting appellees’ motions to vacate, the district court denied the Buttars’ cross-motion to confirm. Thus, the district court, at least implicitly, denied the cross-motion to confirm not merely as to appel-lees, but also as to Winston. To the extent that this is so, the district court erred. On remand, the district court should explicitly address the issue of the Award as it relates to Winston, and either confirm the Award as to him or explain why it is unnecessary or inappropriate to do so.
CONCLUSION
The decision of the district court is reversed. We remand the case for the entry of an order confirming the Award as to Wallace, Jacaruso, and Scotti and for consideration of the Award as to Winston.
Notes
. The actual citation here is to § 771, which we presume to be a mistake because that section has nothing to do with control person liability.
. The Award actually cites § 771, thereby repeating the mistake made by the Buttars in their amended statement of claim. See supra, at 5, n. 1.
. One commentator has argued that "there are powerful reasons why the manifest disregard standard should be replaced by a broader standard .... Because the manifest disregard standard protects an arbitral award from vacatur if the arbitrators did not know the law, it encourages arbitrators not to find out what the law is ....” Norman S. Poser, Judicial Review of Arbitration Awards: Manifest Disregard of the Law, 64 Brook. L.Rev. 471, 515 (1998). We disagree with this contention because it seems to imply that arbitrators will not approach their task in a professional manner. It may be true that '‘[arbitrators should not be potted palms. As decision-makers, they have an obligation to ascertain what the law is and to apply it correctly.” Id. (footnote omitted). But until the FAA is amended to require that arbitrators be attorneys, or that they possess a certain standard of legal knowledge, we see no basis upon which we can impose a duty upon arbitrators to ascertain the legal principles that govern a particular claim through the conduct of independent legal research. That is, we expect arbitrators to ascertain the law through the arguments put before them by the parties to an arbitration proceeding. We recognize the possibility that a case may arise that presents concerns about the relative capacities of the parties to put the law before an arbitral panel; that is, a case where "the dispute is not between roughly equal commercial entities but between parties that are unequal in wealth and sophistication.” Id. This is clearly not such a case, however.
. The district court also relied upon two cases from the Ninth Circuit in order to support its conclusion.
See