Coinbase v. Suski
Headline: Court affirms that when two contracts conflict about who decides arbitration, a judge — not an arbitrator — must decide which contract controls, affecting users and companies in consumer agreements.
Holding: When parties have signed two contracts that conflict over who decides whether a dispute goes to arbitration, a court must decide which contract governs rather than leaving that question to an arbitrator.
- Makes courts decide which contract controls whether disputes go to arbitration.
- Limits companies’ ability to force arbitration when later rules pick courts instead.
- Affects consumer promotions, online platforms, and contract drafting practices.
Summary
Background
Coinbase runs a cryptocurrency exchange and users who signed up agreed to a User Agreement that sends disputes, including questions about arbitrability, to an arbitrator. Separately, users entered a Coinbase sweepstakes and accepted Official Rules that say California courts have sole jurisdiction over sweepstakes disputes. After entrants sued in federal court in California alleging state-law violations, Coinbase asked to compel arbitration and the District Court denied the request; the Ninth Circuit affirmed.
Reasoning
The Court explained that arbitration depends on what the parties actually agreed to. When two separate agreements appear to conflict about who decides arbitrability, a court must first determine which contract governs. The decision noted that general rules about severing arbitration clauses do not prevent a court from addressing challenges that apply to the whole contract. The Court declined to resolve separate state-law questions about which contract superseded the other and affirmed the Ninth Circuit’s bottom-line conclusion that a court must decide which agreement controls.
Real world impact
This ruling means judges, not arbitrators, will decide in cases where separate agreements point different places for resolving disputes. It matters for online platforms, sweepstakes, and other consumer settings where people sign multiple agreements. The Court left open related state-law issues for lower courts to resolve, so businesses and users should expect further litigation about how those rules apply.
Dissents or concurrances
Justice Gorsuch wrote a short concurrence emphasizing that the outcome turns on what the parties agreed to, and noting the Court did not adopt the Ninth Circuit’s state-law analysis.
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