The case of the day is Coinbase, Inc. v. Suski (S. Ct. 2024). Cases about arbitration can get very abstract very quickly. I like the way Justice Jackson categorized arbitration disputes in her new opinion. The most straightforward cases are decisions on the merits of a dispute. At the next level of abstraction, the question is whether the parties agreed that an arbitrator should decide the merits of the dispute. At an even higher level of abstraction, the question is whether the parties agreed that an arbitrator should decide whether the parties agreed that an arbitrator should decide the merits of the dispute. And then we reach Coinbase, which raises an even more abstract question. When the parties have more than one contract and the contracts point in different direction, who should decide which contract governs the question whether the parties agreed that an arbitrator should decide whether the parties agreed that an arbitrator should decide the merits of the dispute? Phew!

Coinbase operates a cryptocurrency exchange. Its users had to enter into a contract when they opened their accounts. That contract contained an arbitration clause that delegated questions of arbitrability to the arbitrator. Coinbase ran a sweepstakes for a chance to win Dogecoin, and the official rules of the sweepstakes contained a choice of forum clause designating the California courts as the exclusive forum for disputes. You can see where this is going. Some Coinbase users who participated in the sweepstakes brought a class action, alleging that the sweepstakes violated California law. Coinbase moved to compel arbitration. The district court denied the motion, and the Ninth Circuit affirmed.

A good rule of thumb is that when an arbitration case gets to the Supreme Court, the “pro-arbitration” argument wins. But here the doctrine pretty clearly called for a judge to decide which contract governed. An agreement to arbitrate and an agreement to delegate questions of arbitrability to an arbitrator are just contracts, and as in any contract, the question is what the parties’ contract means. And it’s already well-established that when the validity of an agreement to arbitrate is at issue, the court must decide it before compelling arbitration.

The decision was 9-0. Justice Gorsuch concurred in order to offer a hypothetical that he thought would come out the other way. Suppose the parties had a “master contract” that says something like, “The parties delegate questions of arbitrability that arise under this agreement or any other agreements we may sign to an arbitrator.” I suppose that could work, and we probably will see that in “main” consumer contracts. But arbitrators are no doormats, and giving the arbitrator the power to decide which of the two contracts governs does not mean that the case will ultimately be arbitrated.