Printed from the Illinois State Bar Association’s Federal Civil Practice Section Newsletter, June 2024 Issue.
In 23-3 Coinbase, Inc. v. Suski (05/23/2024) (supremecourt.gov) (May 23, 2024), the U.S. Supreme Court once again delved into the frequently litigated arena of arbitration agreements. Specifically, the Court considered whether the Federal Arbitration Act (“FAA”) empowers courts or arbitrators to decide which contract controls when (1) parties have executed multiple contracts, and (2) at least one contract contains an arbitration agreement delegating the threshold issue of arbitrability to an arbitrator while another sends arbitrability disputes to the courts. Guided by “basic principles of contract” law, the Court unanimously held that courts—not arbitrators—must decide which contract governs the parties’ dispute.
The case involved a dispute between Coinbase, the operator of a cryptocurrency exchange platform, and users of the platform. The parties had executed two contracts potentially governing their dispute. The first, a broad user agreement, contained an arbitration provision with a delegation clause requiring an arbitrator to decide all disputes arising from their contract, including whether a given dispute was arbitrable. The second, an agreement regarding official rules governing a sweepstakes offered by Coinbase and entered into by users, contained a forum selection clause requiring all disputes related to the contract to be decided in California courts.
After the sweepstakes, sweepstake entrants filed a class action complaint in federal court, alleging the sweepstakes violated California consumer protection and false advertising laws. The parties disagreed regarding whether the forum selection clause in the “official rules” superseded the arbitration provision in the user agreement.
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