Supreme Court on Friday agreed to hear the major’s appeal electronic money exchange Coinbaselooking to have two customer lawsuits against the company is resolved by private arbitration, not by federal court.
“We are very satisfied Supreme Court agreed to hear our appeal and we expect the court to resolve this matter,” one Coinbase spokesman said.
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The issue that the high court will deal with in the Coinbase case concerns the highly technical question of whether a party to the lawsuit can be compelled to continue defending the case in the proceedings at federal district court, even if they ask the court of appeals to submit the dispute to arbitration.
But the case may be the first to be heard by the Supreme Court involving a electronic money company.
Glenn Chappell, attorney for Abraham Bielski, one of Coinbase’s customers is suing the company.
“It’s most likely the first one,” he said.
People view the logo of Coinbase Global Inc, the largest US cryptocurrency exchange, displayed on the Nasdaq MarketSite jumbotron at Times Square in New York, April 14, 2021.
Shannon Stapleton | Reuters
He and other Bielski attorneys objected to Coinbase’s request for the Supreme Court to hear the case.
“We don’t think companies like Coinbase should be entitled to automatically adjourn litigation after a district court has determined their arbitration to be illegal,” Chappell said.
However, he added, “We certainly still welcome the ability to advocate on behalf of consumers in this regard.”
Bielski sued Coinbase after he was scammed of more than $31,000 from his account at the company by someone not connected to Coinbase. His class-action lawsuit alleges that the Cryptocurrency Transfer Act requires Coinbase to credit customers’ accounts for stolen crypto.
Coinbase sought to force arbitration. But a California federal district court judge ruled that the arbitration agreement Bielski had with the company was invalid under that state’s law, allowing his case to proceed in district court.
In another lawsuit brought by the high court on Friday, Coinbase customers sued the company in California district court, claiming that Coinbase’s promotion of the June 2021 Dogecoin sweepstakes was illegal violate state law.
As in the Bielski case, a district judge denied Coinbase’s request to submit the sweepstakes case to arbitration.
The U.S. Court of Appeals for the Ninth Circuit in both cases denied Coinbase’s request to halt district court cases as the company pursued appeals seeking to overturn the denial rulings. arbitration.
Neal Katyal, attorney representing Coinbase in the Supreme Court, in his recommendation asked the judges hearing the company’s appeal that there are deep divisions among lower federal appellate courts on the question the court will decide.
Six federal appeals circuits have held that the appeal that denied the request for “automatic” arbitration continue to proceed in district court, Katyal wrote.
But, “Three rounds … did the opposite,” he added. “The circuits will remain divided unless this Court intervenes.”
Katyal wrote: “Coinbase must now devote considerable time, energy and resources to heavy class action lawsuits in two District Courts although the Ninth Court is likely to conclude that neither case belongs to the court. federal court from the outset”.
