DAVID SUSKI, ET AL V. COINBASE, INC., ET AL, No. 22-15209 (9th Cir. 2022)
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Coinbase, Inc., an online cryptocurrency exchange, appeals the district court’s order denying its motion to compel arbitration in a diversity suit brought by Plaintiff and three other Coinbase users (collectively “Plaintiffs”) who opted into Coinbase’s Dogecoin Sweepstakes in June 2021.
The Ninth Circuit affirmed the district court’s order denying Coinbase, Inc.’s motion to compel arbitration in a diversity suit. The panel held that the “scope” of an arbitration clause concerns how widely it applies, not whether it has been superseded by a subsequent agreement. The district court therefore correctly ruled that the issue of whether the forum selection clause in the Sweepstakes’ Official Rules superseded the arbitration clause in the User Agreement was not delegated to the arbitrator, but rather was for the court to decide.
Further, the court wrote that the district court correctly ruled that because the User Agreement and the Official Rules conflict on the question whether the parties’ dispute must be resolved by an arbitrator or by a California court, the Official Rules’ forum selection clause supersedes the User Agreement’s arbitration clause.
Court Description: Arbitration. The panel affirmed the district court’s order denying Coinbase, Inc.’s motion to compel arbitration in a diversity suit brought by four Coinbase users who opted into Coinbase’s Dogecoin Sweepstakes in June 2021. When plaintiffs created their Coinbase accounts, they agreed to the “Coinbase User Agreement,” which contained an arbitration provision. They later opted into the Sweepstakes’ “Official Rules,” which included a forum selection clause providing that California was the exclusive * The Honorable William K. Sessions III, United States District Judge for the District of Vermont, sitting by designation. SUSKI V. COINBASE, INC. 3 jurisdiction for controversies regarding the sweepstakes. First, Coinbase challenged the district court’s ruling that the Coinbase User Agreement did not delegate to an arbitrator the question of whether the forum selection clause in the Sweepstakes’ Official Rules superseded the arbitration clause in the User Agreement. Coinbase argued that the issue of any superseding effect of the Sweepstakes’ Official Rules concerned the scope of the arbitration clause and therefore fell within the User Agreement delegation clause. The panel held that the “scope” of an arbitration clause concerns how widely it applies, not whether it has been superseded by a subsequent agreement. The district court therefore correctly ruled that the issue of whether the forum selection clause in the Sweepstakes’ Official Rules superseded the arbitration clause in the User Agreement was not delegated to the arbitrator, but rather was for the court to decide. Second, Coinbase challenged the district court’s ruling that the forum selection clause in the Sweepstakes’ Official Rules superseded the User Agreement’s arbitration clause. Coinbase argued that the User Agreement contained an integration clause, and procedures for amendment of the User Agreement, and the User Agreement therefore could not have been superseded by the Official Rules. The panel held that the district court correctly ruled that because the User Agreement and the Official Rules conflict on the question whether the parties’ dispute must be resolved by an arbitrator or by a California court, the Official Rules’ forum selection clause supersedes the User Agreement’s arbitration clause. 4 SUSKI V. COINBASE, INC.
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