MEMORANDUM

BARTLE, Chief Judge.

Before the court is the motion of plaintiff Kevin Fluke to vacate and/or modify an arbitration award made under the Federal Arbitration Act ("FAA").1

Plaintiff Kevin Fluke filed a putative class action lawsuit against defendant CashCall, Inc. ("CashCall") in the Court of Common Pleas of Philadelphia County. Fluke sought to recover statutory damages available under Pennsylvania law for usurious interest rates CashCall allegedly charged Pennsylvania borrowers on loans of $35,000 or less. CashCall timely removed the action based on this court's diversity jurisdiction. We have jurisdiction over this matter because Fluke, a member of the putative class, is of diverse citizenship from CashCall and the case met the requirements of 28 U.S.C. § 1332(d)(2), including the amount of more than $5 million in controversy.2 On CashCall's motion, the court compelled Fluke to comply with a provision in his borrowing agreement requiring him to arbitrate his claims individually and not as part of a class. In the subsequent arbitration, the arbitrator found in favor of CashCall and against Fluke.

I.

In June 2007, Fluke, a resident of Pennsylvania, borrowed $2,600 from the First Bank of Delaware ("First Bank"). This unsecured loan was marketed to Fluke over the internet by CashCall, Inc. ("CashCall"). Under the terms of the promissory note, Fluke could repay this debt over three and a half years, that is, 42 months.3 Of the amount borrowed, $75 was treated as a pre-paid origination fee. Thus, Fluke received $2,525 of the $2,600 he borrowed.

As required by federal law, the promissory note Fluke signed carried a Truth in Lending Act disclosure statement. See 15 U.S.C. §§ 1601-16. According to the disclosure, Fluke was to borrow $2,525.00 at an annual interest rate of 99.16% and pay a total "finance charge" (i.e., interest) of $6,596.77 over 42 months. In borrowing $2,525, Fluke would repay CashCall a total of $9,121.77. The note also contains a provision requiring Fluke to arbitrate any disputes that arise with the holder of the note individually and not as part of a class. See Fluke v. Cashcall, Inc., Case No. 08-5776, slip op. at 13-14, 2009 WL 1437593 (E.D.Pa. May 21, 2009).

After First Bank loaned the money to Fluke, First Bank assigned the promissory note to CashCall.4 The parties agree that CashCall "serviced" the note, which appears to mean that CashCall collected Fluke's payments. Fluke paid CashCall $2,840.00 over 13 months and then ceased making payments. Of the amount Fluke paid, CashCall applied $2,659.12 to interest and $183.76 to principal. When Fluke stopped making payments, CashCall threatened a collection action.

Soon thereafter, Fluke filed this lawsuit. Fluke alleged that the interest rate that CashCall charged him and other similarly-situated borrowers violates the Pennsylvania Loan Interest and Protection Law and the Pennsylvania Consumer Discount Company Act.5 7 P.S. § 6203.A; 41 P.S. §§ 201, 502.

In arbitration, CashCall argued it was not liable under Pennsylvania's usury laws because federal law as set forth in 12 U.S.C. § 1831d authorized First Bank to charge an out-of-state borrower such as Fluke any interest rate that it could validly charge a Delaware borrower.6 See generally Greenwood Trust Co. v. Massachusetts, 971 F.2d 818, 826-28 (1st Cir.1992). The parties agreed that Delaware statutes authorize Delaware-chartered banks such as First Bank to charge a borrower any agreed-upon interest rate. See 5 DEL. CODE ANN. §§ 963, 965. Fluke countered that a 99.16% interest rate is unconscionable and therefore outside the scope of § 1831d.

The arbitrator found the 99.16% interest rate was not unconscionable under Delaware law and denied Fluke any recovery. In his motion to vacate and/or modify that award, Fluke argues that the arbitrator's decision is not supported by substantial evidence and that the arbitrator manifestly disregarded the law in performing his analysis.

II.

The promissory note requires any dispute between Fluke and CashCall to be arbitrated pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1 et seq. The FAA specifies four grounds for setting aside an arbitrator's award. 9 U.S.C. § 10(a). These four grounds are:

Id. The statute also provides three circumstances in which a court may modify or correct an arbitrator's award:

Id. at § 11. The Supreme Court has held that § 10 and § 11 of the FAA are the exclusive grounds for vacating and modifying an arbitrator's award. Hall St. Assocs. LLC v. Mattel, Inc., 552 U.S. 576, 579-80, 583-84, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008).

Fluke argues that the arbitrator's award is unsupported by substantial evidence. The promissory note Fluke signed states that the arbitrator's award "will be supported by substantial evidence and must be consistent with this Agreement and applicable law or may be set aside by a court upon judicial review." Section 10(a) of the FAA does not permit a court to vacate an arbitration award on the ground that it is unsupported by substantial evidence. The Supreme Court has specifically held that contracts between litigants cannot authorize federal courts to vacate arbitration awards on this basis. Id. Thus, Fluke's argument lacks merit.

Fluke also asserts that the award at issue must be set aside due to the arbitrator's "manifest disregard of the law." Both the Supreme Court and our Court of Appeals have specifically declined to resolve whether manifest disregard of the law remains a valid basis for vacatur after the Supreme Court's Hall Street decision. Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., ___ U.S. ___, 130 S.Ct. 1758, 1768 n. 3, 176 L.Ed.2d 605 (2010); Paul Green, 389 Fed.Appx. at 176 n. 5. The Courts of Appeals for the Second and Ninth Circuits have held that an arbitrator engaging in manifest disregard of the law exceeds his or her powers within the meaning of § 10(a)(4) of the FAA. Paul Green, 389 Fed.Appx. at 177 n. 6; see Comedy Club Inc. v. Improv W. Assocs., 553 F.3d 1277, 1290 (9th Cir.2009); Stolt-Nielsen SA v. AnimalFeeds Int'l Corp., 548 F.3d 85, 93-95 (2d Cir.2008), overruled on other grounds, ___ U.S. ___, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010). On the other hand, the Courts of Appeals for the Fifth and Eleventh Circuits have taken the opposite view, that is that "manifest disregard of the law" does not survive Hall Street as a grounds for vacating an arbitrator's award. Frazier v. CitiFinancial Corp., LLC, 604 F.3d 1313, 1324 (11th Cir.2010); Citigroup Global Mkts., Inc. v. Bacon, 562 F.3d 349, 357 (5th Cir.2009).

Prior to Hall Street, our Court of Appeals accepted manifest disregard of the law as a basis for setting aside an arbitration award although it has not had occasion to opine on the subject since that time. See Paul Green, 389 Fed.Appx. at 176. Even if manifest disregard of the law survives under § 10(a)(4) of the FAA, it is available only in those "exceedingly narrow" circumstances in which an "arbitrator (1) knew of the relevant legal principle, (2) appreciated that this principle controlled the outcome of the disputed issue, and (3) nonetheless willfully flouted the governing law by refusing to apply it." Paul Green, 389 Fed.Appx. at 176; Metromedia Energy, Inc. v. Enserch Energy Servs., Inc., 409 F.3d 574, 578 (3d Cir.2005). An arbitrator's manifest disregard for the law is distinct from a merely erroneous application of the law. Even an arbitrator's incorrect legal conclusion is entitled to deference. Local 863 Int'l Bhd. v. Jersey Coast Egg Producers, 773 F.2d 530, 533 (3d Cir. 1985); see Commc'n Consultant, Inc. v. Nextel Commc'n of Mid-A., Inc., 146 Fed. Appx. 550, 553 (3d Cir.2005). Our Court of Appeals has stated "that there must be absolutely no support at all in the record justifying the arbitrator's determinations for a court to deny enforcement of an award." News Am. Publ'ns, Inc. Daily Racing Form Div. v. Newark Typographical Union, Local 103, 918 F.2d 21, 24 (3d Cir.1990) (internal citations omitted).

Fluke's pre-arbitration memorandum explained Delaware's law of unconscionability and urged the arbitrator to find that a 99.16% interest rate is unconscionable. Citing a leading Delaware Supreme Court decision, Fluke urges that a contract is unconscionable if a party uses its superior bargaining power to obtain terms that are "so one-sided as to be oppressive." See Graham v. State Farm Mut. Auto. Ins. Co., 565 A.2d 908, 912-13 (Del.1989).

We are constrained to find, however, that the arbitrator did not manifestly disregard the law in concluding the interest rate at issue was not unconscionable. Delaware statutes specifically authorize lenders to charge borrowers such as Fluke any agreed-upon interest rate, and Fluke cited no cases in which a Delaware court found a particular interest rate unconscionable. See 5 DEL.CODE ANN. § 965. The arbitrator did not "willfully flout" any law he was obliged to apply. Paul Green, 389 Fed.Appx. at 176-77.

We are not unsympathetic to Fluke's argument that an interest rate of 99.16% is unconscionable. Yet, we may not substitute our judgment for that of the arbitrator. See News Am. Publ'ns, 918 F.2d at 24. Assuming that a manifest disregard of the law remains a valid grounds for vacating an arbitration award, the arbitrator here did not manifestly disregard the law in denying Fluke relief. Accordingly, we cannot grant the relief Fluke seeks.

ORDER

AND NOW, this 26th day of May, 2011, for the reasons set forth in the accompanying Memorandum, it is hereby ORDERED that the motion of plaintiff to vacate and/or modify award of arbitrators (Doc. No. 48) is DENIED.