The Supreme Court repeatedly has recognized that the Federal Arbitration Act, 9 U.S.C. § 1 et seq., embodies a strong federal policy requiring judicial enforcement of private-party agreements to resolve disputes through binding arbitration, which usually is speedier, more efficient, and less expensive than litigation. To facilitate these benefits, arbitration agreements often contain a “delegation clause” that assigns threshold questions of arbitrability to the arbitrator.
Case Background
In Coinbase v. Suski, No. 23-3, the Supreme Court will address whether courts must respect the parties’ decision to delegate questions of arbitrability to the arbitrator when a later contract does not address arbitration or delegation. The arbitration agreement at issue, including its delegation clause, was part of a subsequently modified User Agreement between the Coinbase crypto-currency exchange and Coinbase account holders. The account holders have filed a putative class action challenging the manner in which Coinbase conducted a sweepstakes. The Ninth Circuit affirmed a district court’s denial of Coinbase’s motion to compel arbitration.
ALF's Amicus Brief
ALF’s brief argues that by declining to enforce the arbitration agreement’s delegation clause, the Ninth Circuit has subjected the parties to the very type of litigation that they agreed to avoid. The brief explains that delegating disputes over arbitrability to the arbitrator is a common way of streamlining dispute resolution. But that objective is defeated, and the Federal Arbitration Act is violated, where as in Coinbase, questions about the validity and scope of an arbitration provision are delegated to the arbitrator but adjudicated by a court.
