Coinbase v. Suski

Supreme Court of the United States
Coinbase v. Suski, 602 U.S. 143 (2024)

Coinbase v. Suski

Opinion

(Slip Opinion)              OCTOBER TERM, 2023                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 
200 U. S. 321, 337
.


SUPREME COURT OF THE UNITED STATES

                                       Syllabus

                  COINBASE, INC. v. SUSKI ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                  THE NINTH CIRCUIT

      No. 23–3. Argued February 28, 2024—Decided May 23, 2024
The dispute here involves a conflict between two contracts executed by
  petitioner Coinbase, Inc., operator of a cryptocurrency exchange plat-
  form, and respondents, who use Coinbase. The first contract—the
  Coinbase User Agreement that respondents agreed to when they cre-
  ated their accounts—contains an arbitration provision with a delega-
  tion clause. Per this provision, an arbitrator must decide all disputes
  under the contract, including whether a given disagreement is arbitra-
  ble. The second contract—the Official Rules for a promotional sweep-
  stakes respondents entered—contains a forum selection clause provid-
  ing that California courts “shall have sole jurisdiction of any
  controversies regarding the [sweepstakes] promotion.” Respondents
  ultimately filed a class action in the U. S. District Court for the North-
  ern District of California, alleging that the sweepstakes violated vari-
  ous California laws. Coinbase moved to compel arbitration based on
  the User Agreement’s delegation clause. The District Court deter-
  mined that the Official Rules’ forum selection clause controlled the
  parties’ dispute and accordingly denied the motion. The Ninth Circuit
  affirmed.
Held: Where parties have agreed to two contracts—one sending arbitra-
 bility disputes to arbitration, and the other either explicitly or implic-
 itly sending arbitrability disputes to the courts—a court must decide
 which contract governs. Pp. 4–9.
    (a) The Federal Arbitration Act “reflects the fundamental principle
 that arbitration is a matter of contract.” Rent-A-Center, West, Inc. v.
 Jackson, 
561 U. S. 63, 67
. Given that arbitration agreements are
 simply contracts, the first question in any arbitration dispute must be:
 What have these parties agreed to? Parties can form multiple levels
 of agreements concerning arbitration, and thus can have different
2                       COINBASE, INC. v. SUSKI

                                  Syllabus

    kinds of disputes. At a basic level, parties can agree to send the merits
    of a dispute to an arbitrator. The merits of a dispute is a first-order
    disagreement. The parties may also have a second-order dispute—
    “whether they agreed to arbitrate the merits”—as well as a third-order
    dispute—“who should have the primary power to decide the second
    matter.” First Options of Chicago, Inc. v. Kaplan, 
514 U. S. 938, 942
.
    Pp. 4–5.
       (b) This case involves a fourth kind of dispute: What happens if par-
    ties have multiple agreements that evidence a conflict over the answer
    to the third-order question of who decides arbitrability? That question
    can be answered as to these parties only by determining which contract
    applies. Homing in on the conflict between the delegation clause in
    the first contract and the forum selection clause in the second, the
    question becomes whether the parties agreed to send the given dispute
    to arbitration. And that question must be answered by a court.
       Coinbase asks the Court to revisit the Ninth Circuit’s bottom-line
    conclusion below, but its arguments are unpersuasive. First, Coinbase
    argues that the Ninth Circuit should have applied the so-called sever-
    ability principle—under which “an arbitration [or delegation] provi-
    sion is severable from the remainder of the contract,” Buckeye Check
    Cashing, Inc. v. Cardegna, 
546 U. S. 440
, 445–446—and considered
    only arguments specific to the User Agreement’s delegation provision.
    But the severability rule does not require that a party challenge only
    the arbitration or delegation provision. Rather, where a challenge ap-
    plies “equally” to the whole contract and to an arbitration or delegation
    provision, a court must address that challenge. Rent-A-Center, 
561 U. S., at 71
.
       Coinbase next contends that, as a matter of California state law, the
    Ninth Circuit erroneously held that the Official Rules’ forum selection
    clause superseded the User Agreement’s delegation provision. That
    issue is outside the scope of the question presented, and the Court does
    not address it.
       Finally, the Court does not believe its ruling here will invite chaos
    by facilitating challenges to delegation clauses. Regardless, where the
    parties have agreed to two contracts, a court must decide which con-
    tract governs. To hold otherwise would be to impermissibly elevate a
    delegation provision over other forms of contract. See 
ibid.
 Pp. 5–8.

55 F. 4th 1227
, affirmed.

   JACKSON, J., delivered the opinion for a unanimous Court. GORSUCH,
J., filed a concurring opinion.
                        Cite as: 
602 U. S. ____
 (2024)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     United States Reports. Readers are requested to notify the Reporter of
     Decisions, Supreme Court of the United States, Washington, D. C. 20543,
     [email protected], of any typographical or other formal errors.


SUPREME COURT OF THE UNITED STATES
                                   _________________

                                     No. 23–3
                                   _________________


COINBASE, INC., PETITIONER v. DAVID SUSKI, ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
            APPEALS FOR THE NINTH CIRCUIT
                                 [May 23, 2024]

   JUSTICE JACKSON delivered the opinion of the Court.
   The parties in this case executed two contracts. The first
contained an arbitration provision with a delegation clause;
per that provision, an arbitrator must decide all disputes
under the contract, including whether a given disagree-
ment is arbitrable. The second contract contained a forum
selection clause, providing that all disputes related to that
contract must be decided in California courts. Coinbase in-
sists that the first contract’s delegation clause established
the terms by which all subsequent disputes were to be re-
solved, so the arbitrability of a contract-related dispute be-
tween these parties is a matter for the arbitrator to decide.
But respondents maintain—and the Ninth Circuit held—
that the second contract’s forum selection clause super-
seded that prior agreement. This case thus presents the
following question: When two such contracts exist, who de-
cides the arbitrability of a contract-related dispute between
the parties—an arbitrator or the court?
   Basic legal principles establish the answer. Arbitration
is a matter of contract and consent, and we have long held
that disputes are subject to arbitration if, and only if, the
parties actually agreed to arbitrate those disputes. Here,
2                 COINBASE, INC. v. SUSKI

                     Opinion of the Court

then, before either the delegation provision or the forum se-
lection clause can be enforced, a court needs to decide what
the parties have agreed to—i.e., which contract controls.
Accordingly, we affirm the judgment of the Ninth Circuit.
                              I
  Coinbase, Inc., operates a cryptocurrency exchange plat-
form. Respondents are users of Coinbase. To buy and sell
cryptocurrency on the platform, users create accounts.
  The first relevant contract is the Coinbase User Agree-
ment that respondents agreed to when they created their
accounts. The User Agreement contains a provision that
the contract calls the Arbitration Agreement. 
1 App. 218
.
The Arbitration Agreement includes a delegation clause:
    “This Arbitration Agreement includes, without limi-
    tation, disputes arising out of or related to the inter-
    pretation or application of the Arbitration Agree-
    ment, including the enforceability, revocability,
    scope, or validity of the Arbitration Agreement or
    any portion of the Arbitration Agreement. All such
    matters shall be decided by an arbitrator and not by
    a court or judge.” 
Ibid.
 (emphasis added).
  Respondents each agreed to the User Agreement, com-
plete with the above-quoted arbitration language. If that
were the only contract at issue, we would not be deciding
this case, since the Arbitration Agreement quite clearly
sends to arbitration disputes between Coinbase and its us-
ers, including disputes about arbitrability.
  These parties, though, agreed to a second contract. Coin-
base offered a sweepstakes that users could enter for a
chance to win a cryptocurrency called Dogecoin. Respond-
ents each submitted entries in June 2021, and in doing so,
agreed to the Official Rules of the sweepstakes. Unlike the
User Agreement, the Official Rules contained a forum se-
lection clause, which provided:
                 Cite as: 
602 U. S. ____
 (2024)              3

                     Opinion of the Court

    “The California courts (state and federal) shall have
    sole jurisdiction of any controversies regarding the
    [sweepstakes] promotion and the laws of the state of
    California shall govern the promotion. Each entrant
    waives any and all objections to jurisdiction and
    venue in those courts for any reason and hereby sub-
    mits to the jurisdiction of those courts.” Id., at 108
    (capitalization altered).
   Thus, after respondents entered the sweepstakes, the
parties had executed two contracts: the User Agreement,
which sent disputes about arbitrability to arbitration, and
the Official Rules, which appeared to send disputes to Cal-
ifornia courts.
   Once the sweepstakes concluded, the conflict between
these contracts came to a head. Respondents filed a class-
action complaint in the U. S. District Court for the North-
ern District of California, alleging that the sweepstakes vi-
olated California’s False Advertising Law, Unfair Competi-
tion Law, and Consumer Legal Remedies Act. Invoking the
User Agreement and its delegation clause, Coinbase moved
to compel arbitration.
   The District Court denied Coinbase’s motion. It reasoned
that deciding which contract governed was a question for
the court; that the User Agreement’s arbitration provision
conflicted with the forum selection clause in the Official
Rules; and that, under California contract law, the Official
Rules superseded the User Agreement. The District Court
therefore determined that the Official Rules’ forum selec-
tion clause controlled, so the parties’ sweepstakes-related
dispute was not subject to arbitration. The Ninth Circuit
affirmed. 
55 F. 4th 1227
 (2022).
   We granted certiorari to answer the question of who—a
judge or an arbitrator—should decide whether a subse-
quent contract supersedes an earlier arbitration agreement
that contains a delegation clause. 
601 U. S. ___
 (2023).
4                  COINBASE, INC. v. SUSKI

                      Opinion of the Court

                                II
    The Federal Arbitration Act (FAA) “reflects the funda-
mental principle that arbitration is a matter of contract.”
Rent-A-Center, West, Inc. v. Jackson, 
561 U. S. 63, 67
(2010). As a result, arbitration agreements are “valid, ir-
revocable, and enforceable, save upon such grounds as exist
at law or in equity for the revocation of any contract.” 
9 U. S. C. §2
. If a court is “satisfied that the making of the
agreement for arbitration . . . is not in issue,” it must send
the dispute to an arbitrator. §4. “The FAA thereby places
arbitration agreements on an equal footing with other con-
tracts.” Rent-A-Center, 
561 U. S., at 67
.
    Given that arbitration agreements are simply contracts,
“ ‘[t]he first principle that underscores all of our arbitration
decisions’ is that ‘[a]rbitration is strictly a matter of con-
sent.’ ” Lamps Plus, Inc. v. Varela, 
587 U. S. 176, 184
 (2019)
(quoting Granite Rock Co. v. Teamsters, 
561 U. S. 287
, 299
(2010); some alterations in original). Arbitration is “a way
to resolve those disputes—but only those disputes—that
the parties have agreed to submit to arbitration.” First Op-
tions of Chicago, Inc. v. Kaplan, 
514 U. S. 938, 943
 (1995).
Consequently, the first question in any arbitration dispute
must be: What have these parties agreed to?
    As relevant here, parties can form multiple levels of
agreements concerning arbitration. At a basic level, parties
can agree to send the merits of a dispute to an arbitrator.
They can also “agree by contract that an arbitrator, rather
than a court, will resolve threshold arbitrability questions
as well as underlying merits disputes.” Henry Schein, Inc.
v. Archer & White Sales, Inc., 
586 U. S. 63, 65
 (2019). An
agreement to allow an arbitrator to decide whether a dis-
pute is subject to arbitration—i.e., its arbitrability—“is
simply an additional, antecedent agreement . . . , and the
FAA operates on this additional arbitration agreement just
as it does on any other.” Rent-A-Center, 
561 U. S., at 70
.
    From these different kinds of agreements, it follows that
                 Cite as: 
602 U. S. ____
 (2024)            5

                     Opinion of the Court

parties can also have different kinds of disputes. A contest
over “the merits of the dispute” is a first-order disagree-
ment, First Options, 
514 U. S., at 942
 (emphasis deleted),
the resolution of which depends on the applicable law and
relevant facts. The parties may also have a second-order
dispute—“whether they agreed to arbitrate the merits”—as
well as a third-order dispute—“who should have the pri-
mary power to decide the second matter.” 
Ibid.
 (emphasis
deleted). Under contract principles, these second- and
third-order questions are also matters of consent. “Just as
the arbitrability of the merits of a dispute depends upon
whether the parties agreed to arbitrate that dispute, so the
question ‘who has the primary power to decide arbitrability’
turns upon what the parties agreed about that matter.” 
Id., at 943
 (citations omitted).
   We ask who has the power to decide arbitrability because
“a party who has not agreed to arbitrate will normally have
a right to the court’s decision about the merits of its dis-
pute.” 
Id., at 942
. Thus, we have explained that “[c]ourts
should not assume that the parties agreed to arbitrate ar-
bitrability unless there is ‘clea[r] and unmistakabl[e]’ evi-
dence that they did so.” 
Id.,
 at 944 (quoting AT&T Technol-
ogies, Inc. v. Communications Workers, 
475 U. S. 643, 649
(1986); some alterations in original). “[B]efore referring a
dispute to an arbitrator,” therefore, “the court determines
whether a valid arbitration agreement exists.” Henry
Schein, 
586 U. S., at 69
.
                             III
   In prior cases, we have addressed three layers of arbitra-
tion disputes: (1) merits, (2) arbitrability, and (3) who de-
cides arbitrability. This case involves a fourth: What hap-
pens if parties have multiple agreements that conflict as to
the third-order question of who decides arbitrability? As
always, traditional contract principles apply.
   Coinbase says the User Agreement’s delegation clause
6                  COINBASE, INC. v. SUSKI

                      Opinion of the Court

controls. Respondents counter that the Official Rules’ fo-
rum selection clause superseded that agreement. If Coin-
base is right that the User Agreement’s delegation clause
was meant to govern all agreements moving forward, then
the parties agreed to arbitrate all subsequent arbitrability
disputes. If respondents are correct that the Official Rules’
forum selection clause superseded the User Agreement’s
delegation clause, then the parties meant to send sweep-
stakes disputes—including those over arbitrability—to Cal-
ifornia courts.
   Thus, the question whether these parties agreed to arbi-
trate arbitrability can be answered only by determining
which contract applies. In other words, “the substance of
the parties’ supersession dispute is ‘whether there is an
agreement to arbitrate.’ ” Field Intelligence Inc. v. Xylem
Dewatering Solutions Inc., 
49 F. 4th 351, 356
 (CA3 2022).
When we home in on the conflict between the delegation
clause in the first contract and forum selection clause in the
second, the question is whether the parties agreed to send
the given dispute to arbitration—and, per usual, that ques-
tion must be answered by a court.
   Coinbase seems to concede this point. See Reply Brief 12
(“Coinbase agrees that the Court can and should assess
whether the official rules displaced the parties’ consent to
have an arbitrator decide arbitrability”). Nevertheless, it
offers a slew of reasons why we should revisit the Ninth
Circuit’s bottom-line conclusion. None of these reasons per-
suades us to do so.
   First, Coinbase invokes the so-called severability princi-
ple. Under the severability principle, “an arbitration [or
delegation] provision is severable from the remainder of the
contract,” and “unless the challenge is to the arbitration [or
delegation] clause itself, the issue of the contract’s validity
is considered by the arbitrator in the first instance.” Buck-
eye Check Cashing, Inc. v. Cardegna, 
546 U. S. 440
, 445–
                       Cite as: 
602 U. S. ____
 (2024)                        7

                            Opinion of the Court

446 (2006). Coinbase argues that, pursuant to this princi-
ple, the Ninth Circuit should have isolated the User Agree-
ment’s delegation provision and considered only arguments
specific to that provision.
   Assuming without deciding that the severability princi-
ple is implicated here, it is nonetheless satisfied. The sev-
erability principle establishes that a party seeking to avoid
arbitration must directly challenge the arbitration or dele-
gation clause, not just the contract as a whole. But this rule
does not require that a party challenge only the arbitration
or delegation provision. Rather, where a challenge applies
“equally” to the whole contract and to an arbitration or del-
egation provision, a court must address that challenge.
Rent-A-Center, 
561 U. S., at 71
. Again, basic principles of
contract and consent require that result. Arbitration and
delegation agreements are simply contracts, and, normally,
if a party says that a contract is invalid, the court must ad-
dress that argument before deciding the merits of the con-
tract dispute. So too here. “If a party challenges the valid-
ity . . . of the precise agreement to arbitrate at issue, the
federal court must consider the challenge before ordering
compliance with that [arbitration] agreement.” 
Ibid.
 (em-
phasis added).*
   Next, Coinbase contends that, as a matter of California
——————
   *Coinbase’s argument that respondents failed to challenge the delega-
tion provision in the District Court is itself forfeited. Coinbase did not
raise that argument before the Ninth Circuit, and the Ninth Circuit did
not address it. That argument is also meritless: When opposing Coin-
base’s motion to compel arbitration in the District Court, respondents
pointed out that “courts can refer the question of arbitrability to an arbi-
trator only ‘if a valid [arbitration] agreement exists,’ ” and, “since Official
Rules ¶10 ‘superseded’ the parties’ prior arbitration agreements, any
prior agreement to arbitrate Sweepstakes-related disputes no longer ex-
ists.” 
2 App. 451
 (alteration in original). Respondents’ District Court
challenge was “directed specifically to” the delegation provision. Rent-A-
Center, 
561 U. S., at 71
. Thus, this case is not like Rent-A-Center, where
the plaintiff “did [not] even mention the delegation provision.” 
Id., at 72
.
8                 COINBASE, INC. v. SUSKI

                      Opinion of the Court

law, the Ninth Circuit was wrong to hold that the Official
Rules’ forum selection clause superseded the User Agree-
ment’s delegation provision. That issue is outside the scope
of the question presented, and we do not address it. We
took this case to decide whether, under the FAA, a court or
an arbitrator decides which of the two contractual provi-
sions controls. We decline to consider auxiliary questions
about whether the Ninth Circuit properly applied state law.
   Finally, Coinbase contends that our approach will invite
chaos by facilitating challenges to delegation clauses. We
do not believe that such chaos will follow. In cases where
parties have agreed to only one contract, and that contract
contains an arbitration clause with a delegation provision,
then, absent a successful challenge to the delegation provi-
sion, courts must send all arbitrability disputes to arbitra-
tion. But, where, as here, parties have agreed to two con-
tracts—one sending arbitrability disputes to arbitration,
and the other either explicitly or implicitly sending arbitra-
bility disputes to the courts—a court must decide which
contract governs. To hold otherwise would be to impermis-
sibly “ ‘elevate [a delegation provision] over other forms of
contract.’ ” 
Ibid.
 (quoting Prima Paint Corp. v. Flood &
Conklin Mfg. Co., 
388 U. S. 395, 404, n. 12
 (1967)).
                       *    *     *
  We conclude that a court, not an arbitrator, must decide
whether the parties’ first agreement was superseded by
their second. The Ninth Circuit’s judgment is affirmed.

                                             It is so ordered.
                  Cite as: 
602 U. S. ____
 (2024)            1

                    GORSUCH, J., concurring

SUPREME COURT OF THE UNITED STATES
                          _________________

                            No. 23–3
                          _________________


COINBASE, INC., PETITIONER v. DAVID SUSKI, ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
            APPEALS FOR THE NINTH CIRCUIT
                         [May 23, 2024]

   JUSTICE GORSUCH, concurring.
   Often, parties choose to send disputes arising from their
contracts to an arbitrator instead of a court. Ante, at 4; see
9 U. S. C. §2
. Just as often, it seems, parties later wind up
disagreeing about whether a particular dispute is subject to
that arbitration agreement. Sometimes a court can resolve
their disagreement about the “arbitrability” of a particular
dispute. But sometimes not. For parties can agree to send
arbitrability questions to an arbitrator too, through what
this Court calls a delegation clause. Ante, at 4–5; Henry
Schein, Inc. v. Archer & White Sales, Inc., 
586 U. S. 63, 65
(2019).
   What happens when (as in this case) the parties have two
contracts, one with a delegation clause, a second without,
and a dispute later arises? Like everything else in this
area, it depends on what the parties have agreed. Ante, at
4. Sometimes, a court may conclude that the parties’ agree-
ments are best read as leaving for the court the task of re-
solving the arbitrability of the dispute at hand. But some-
times, the parties’ agreements may be best read as vesting
that power in an arbitrator. Just imagine a master contract
providing that “all disputes arising out of or related to this
or future agreements between the parties, including ques-
tions concerning whether a dispute should be routed to ar-
bitration, shall be decided by an arbitrator.” Absent some
2                 COINBASE, INC. v. SUSKI

                    GORSUCH, J., concurring

later amendment, a provision like that would seem to re-
quire a court to step aside. See ante, at 8.
   It is not clear to me whether the Ninth Circuit appreci-
ated this point. But nor does that matter. Our decision
today recognizes—and stresses—that “[a]rbitration is a
matter of contract,” ante, at 1, and parties can “ ‘agree by
contract that an arbitrator, rather than a court, will resolve
threshold arbitrability questions as well as underlying mer-
its disputes,’ ” ante, at 4 (quoting Henry Schein, 
586 U. S., at 65
). Notably, too, the Court does not endorse the reason-
ing in the Ninth Circuit’s opinion, let alone its state con-
tract law analysis of the parties’ agreements. See ante, at
7–8. Instead, the Court simply reaffirms well-established
principles about the primacy of the parties’ agreements
when it comes to arbitration, ante, at 4, and the Ninth Cir-
cuit’s “bottom-line conclusion” that a court had to decide
whether and to what extent the parties here reached “an
agreement” to have an arbitrator resolve the question of ar-
bitrability, ante, at 1–2, 6. With that understanding, I am
pleased to concur.


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