Arbitration

In December, this blog noted that the Supreme Court, in Coinbase, Inc. v. Bielski,  would consider whether federal law requires courts to automatically stay litigation during an arbitration appeal.  The Supreme Court heard oral argument on the issue yesterday and several justices expressed a willingness to potentially end the automatic stay during an arbitration appeal.  Such a decision would likely increase the cost of defending class-action lawsuits in most jurisdictions.

Arbitration generally provides a less costly and more efficient procedure for resolving disputes than litigation.  Arbitration clauses, a staple of business contracts, compel would-be litigants to resolve […]

In 2021, two plaintiffs filed separate class-action lawsuits against Coinbase, one of the largest cryptocurrency exchanges in the U.S.  Coinbase moved to compel arbitration in each case because both plaintiffs signed Coinbase’s User Agreement directing any dispute to arbitration.  The United States District Court for Northern California denied arbitration in both cases.  Coinbase appealed the denial of arbitration and moved to stay the underlying class actions.  The District Court again denied Coinbase’s motion and allowed both the arbitration appeal and the class action litigation to proceed concurrently.

The Ninth Circuit affirmed the District Court in both cases.  […]