US Supreme Court agrees to hear Coinbase arbitration dispute
The USA high Court has agreed to hear cryptocurrency exchange Coinbase Global Inc’s effort to stop lawsuits the company says belong in private arbitration, including one by a user suing after a scammer stole from his account.
The judges agreed to consider whether two proposed class actions by customers suing Coinbase could move forward while the company appeals judges’ rulings refusing to force its users to arbitrate their claims.
“We are pleased that the Supreme Court has agreed to hear our appeal, and we look forward to its resolution of this matter,” Neal Katyala lawyer for Coinbase, said in a statement.
A US law called the Federal Arbitration Act requires that agreements customers sign to pursue legal claims against companies in private arbitration be enforced according to their contractual terms.
Business groups call arbitration a faster and more efficient alternative to suing in court. Plaintiffs’ lawyers say arbitration benefits companies and that consumers can have more power and obtain broader relief by filing class actions on behalf of larger groups of people in court.
The lawsuits before the Supreme Court include one in California by customer Abraham Bielskiwho said he was tricked into giving access to his Coinbase account to a scammer who then stole more than $31,000 from him.
Bielski sued Coinbase, arguing that the Electronic Funds Transfer Act requires the company to recredit customers’ stolen cryptocurrency.
In another case from California, former Coinbase users sued, alleging that they were duped by the company into paying $100 or more to participate in a sweepstakes that offered participants the chance to win prizes of up to $1.2 million. to win the cryptocurrency Dogecoin.
In both cases, judges refused to compel Coinbase’s customers to pursue their cases in arbitration, as the company claimed their user agreements required.
Coinbase asked the 9th US Circuit Court of Appeals in San Francisco to stay the litigation at the trial court level while it pursued appeals, but the court rejected its requests.
After Coinbase asked the Supreme Court to hear the case, a trial judge halted proceedings in the whipping lawsuit while the company’s appeal continued, although Coinbase argued that the decision should not stop its Supreme Court Appeal.
Hassan Zavareia lawyer for Bielski, said in a statement that the case presents a chance for the Supreme Court to correct lower courts “that have invented new rules to favor arbitration over litigation.”
“When companies like Coinbase try to force consumers into arbitration and district courts reject the effort, those companies should not be allowed to delay litigation through special automatic stays found nowhere in the Federal Arbitration Act,” he said.
David Harrisan attorney for the Coinbase users in the sweepstakes case, said they look forward to addressing the question in the case and “hopefully achieving a positive result for plaintiffs in many types of civil cases across the country.”