June 11, 2024
The Supreme Court of the United States has decided another case that affects enforcement of arbitration clauses. Coinbase v. Suski concerned users of a crypto exchange. When the users registered with the exchange, they executed a user agreement that contained an arbitration requirement with a delegation clause, meaning “an arbitrator must decide all disputes under the contract, including whether a given disagreement is arbitrable.” Coinbase later offered a sweepstakes in which the official rules for entries instead “contained a forum selection clause, providing that all disputes related to that contract must be decided in California courts.”
The conflict between the user agreement and the official rules became a problem when users filed a class-action complaint arising from the sweepstakes. Coinbase moved to compel arbitration based on the user agreement. The users resisted, relying on the sweepstakes official rules. The Supreme Court ruled that where a conflict exists, as it did here, then “a court, not an arbitrator, must decide whether the parties’ first agreement was superseded by their second.”
Coinbase answers an important question because it can be frustratingly common to have conflicting contracts between two parties. However, it also indirectly emphasizes the importance of contract drafting and review.
This article originally appeared on Wilson Elser.
About the Author:
Michael Lowry is a partner at Wilson Elser. michael.lowry@wilsonelser.com