US Supreme Court agrees to take up Coinbase case involving arbitration jurisdiction

The U.S. Supreme Court announced on Friday that it would hear a case involving Coinbase and whether a dispute involving a Dogecoin sweepstakes can be settled through arbitration.

The move comes almost a year after Judge Sallie Kim, for the U.S. District Court for the Northern District of California, denied Coinbase's motion to take the dispute to arbitration, according to an opinion from December 2022. Arbitration can be favored by companies because it can cost less and be resolved more quickly. 

The case involves two different contracts, one that would lead to arbitration and the other that would be required to be figured out in a California court. 

David Suski, a Coinbase user among others, opted into Coinbase's Dogecoin Sweepstakes in June 2021 and agreed to a user agreement, which included an arbitration provision. Suski then later opted into a separate "officials rules" for the sweepstakes, which included a clause that California courts would have "exclusive jurisdiction over any controversies regarding the sweepstakes," according to Kim's opinion. 

Coinbase argued that the user agreement should have superseded the official rules, but the California judge ultimately disagreed.

Two for two

It is unusual to have a company end up having two cases teed up in front of the U.S. Supreme Court two terms in a row, said Jessica Lynn Ellsworth, outside counsel for Coinbase with law firm Hogan Lovells US, LLP. The U.S. Supreme Court came to a decision in June to pause litigation involving Abraham Bielski while the lower courts decide whether the case belongs in arbitration or in court. 

"They don't take a huge number of cases and they don't take a huge number of cases involving commercial business interests," Ellsworth said.

Next, the case will likely be argued in front of the U.S. Supreme Court some time in spring 2024.