Coinbase v. Suski

Background

Coinbase is a cryptocurrency exchange, and the respondents are users who created accounts and entered a Dogecoin sweepstakes. When users signed up they agreed to a User Agreement that contained an Arbitration Agreement with a delegation clause saying an arbitrator should decide arbitrability. When they entered the sweepstakes they agreed to Official Rules that included a forum selection clause saying California courts “shall have sole jurisdiction.” Respondents then sued in federal court in California, alleging violations of California’s False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act. Coinbase asked the court to compel arbitration under the User Agreement.

Reasoning

The District Court denied Coinbase’s motion, finding the Official Rules governed; the Ninth Circuit affirmed. The Supreme Court agreed that when parties have two contracts that appear to conflict over who decides arbitrability, a court must first determine which contract applies. The Court stressed that arbitration is based on what parties actually agreed to and that the Federal Arbitration Act treats arbitration agreements like other contracts. The Court explained the severability principle does not prevent a court from resolving challenges that apply equally to the whole contract and to a delegation clause. The Court refused to decide separate state-law questions about which contract actually superseded the other.

Real world impact

The ruling means judges, not arbitrators, will decide which of multiple agreements governs when those agreements conflict about who decides arbitrability. It preserves ordinary contract analysis and limits automatic elevation of delegation clauses over later agreements.

Dissents or concurrances

Justice Gorsuch concurred, emphasizing that the outcome depends on what the parties agreed and that courts must respect clear contractual allocations of decision authority.