Access to Justice

Coinbase, Inc. v. Bielski & Coinbase, Inc. v. Suski

In two cases, the Supreme Court considered whether an appeal of a district court’s denial of a motion to compel arbitration prevents the court from proceeding with all litigation while the appeal is pending.

Case Summary

Abraham Bielski, a user of the cryptocurrency exchange platform Coinbase, was defrauded by another user who stole $31,000 from his account. When Coinbase informed Bielski that the company could not help him recoup his losses, he filed a lawsuit arguing that the Electronic Funds Transfer Act required Coinbase to recover the stolen money.

Meanwhile, David Suski and three other Coinbase users filed a different suit concerning a sweepstakes that the company held in June 2021. Suski alleged that in marketing the sweepstakes Coinbase intentionally led users to believe that they had to buy or sell at least $100 in cryptocurrency to enter, even though no such monetary transaction was required.

In response to both lawsuits, Coinbase moved to compel arbitration proceedings, invoking an arbitration clause in the User Agreement that the plaintiffs electronically agreed to when opening their Coinbase accounts. In each case, the district court denied the motion. The company appealed to the Ninth Circuit Court of Appeals and then asked the Ninth Circuit to stay both cases while the appeals were pending.

After the Ninth Circuit denied both motions to stay, Coinbase asked the Supreme Court to hear the cases. It argued that the court below was wrong to deny the motions because the district courts lacked authority to proceed with litigation while the appeals were pending. On December 9, 2022, the Court agreed to hear both cases together.

On February 28, 2023, CAC filed an amicus curiae brief in support of Bielski and Suski. Our brief made two main points.

First, despite Coinbase’s suggestions to the contrary, district courts clearly retain jurisdiction when arbitrability appeals are filed. Coinbase argued that Section 16(a) of the Federal Arbitration Act (FAA) strips a district court of authority over a case after an appeal has been noticed pursuant to that provision, but Section 16(a) is not a jurisdictional provision. Recognizing the significance of attaching a jurisdictional label to a statutory provision, the Supreme Court has repeatedly admonished that statutes should not be labeled jurisdictional unless Congress “clearly states” its intention to imbue a particular rule with those severe consequences. Section 16(a), which simply provides that “[a]n appeal may be taken from” various specified orders, includes no statement—let alone a clear one—indicating that Congress intended the authorization of these appeals to be jurisdictional.

Second, the brief explained that Section 16(a) does not deprive courts of the discretion to determine whether a stay is appropriate. The Supreme Court has repeatedly refused to “displace courts’ traditional equitable authority” absent the “clearest command” from Congress. Coinbase argued that the Court should nonetheless infer a congressional intent to strip courts of the discretion to determine whether a stay is appropriate because of case law that existed when Section 16(a) was passed. But nothing about the case law that Coinbase cited suggests that Congress, in passing Section 16(a), intended to strip district courts of their authority to decide when a stay is or is not appropriate.

On June 23, 2023, the Supreme Court issued its decision in Coinbase v. Bielski and dismissed the writ of certiorari in Coinbase v. Suski as improvidently granted. The Court ruled in favor of Coinbase, agreeing that, in cases where a company unsuccessfully seeks to force consumers to arbitrate, a district court must pause the litigation while the court of appeals reviews the denial of the effort to force arbitration. In her dissent, Justice Jackson advanced a textualist argument that echoed CAC’s brief, explaining that the Court’s requirement of a mandatory pause “comes out of nowhere” and is “untethered” from the text of federal arbitration statutes.

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