Coinbase v. Suski

The Supreme Court unanimously ruled that when two contracts conflict on whether a case should go to arbitration, a judge must decide which contract wins. In this case, Coinbase users first signed an agreement to arbitrate disputes, but later entered a sweepstakes with rules saying disputes belonged in California courts. The Court held that because the two agreements disagreed on who should decide the rules, a court—not an arbitrator—must resolve that conflict.

This decision protects consumers by ensuring they can have their day in court when a newer contract replaces an old arbitration requirement. It prevents companies from automatically forcing every dispute into private arbitration if a later agreement suggests otherwise. For example, millions of tech users who sign updated terms of service may now have more legal leverage if those new terms change how legal fights are handled.

For years, the Supreme Court has generally favored arbitration (a private way to settle disputes outside of court) under the Federal Arbitration Act. However, this case clarifies that arbitration is strictly a matter of what the parties agreed to in their contracts. If there is a legitimate question about which contract is currently in effect, the judicial system remains the default authority to solve that puzzle.

The Court ruled 9-0 to affirm the lower court's decision, with Justice Jackson writing the majority opinion for a unified bench.

“Where parties have agreed to two contracts—one sending arbitrability disputes to arbitration, and the other either explicitly or implicitly sending arbitrability disputes to the courts—a court must decide which contract governs.”

A judge, not an arbitrator, must decide which contract applies when a newer agreement conflicts with an older arbitration clause.

The case returns to the lower courts to apply this rule to the specific dispute between Coinbase and the sweepstakes participants. Companies will likely start writing more specific 'merger clauses' to clarify that new sweepstakes or promotion rules do not cancel out their original arbitration agreements. Legal experts will watch if this leads to more consumers successfully challenging arbitration requirements in court.

Users claimed a sweepstakes agreement replaced an older arbitration clause. Coinbase argued that an arbitrator should decide if that was true.

It ensures that judges can step in when companies provide conflicting instructions on where to settle legal fights. This keeps the courtroom door open for consumers.

The Court ruled that judges must resolve 'fourth-order' disputes. This means deciding which contract governs when two agreements disagree on who decides the rules.

The case will move forward in the lower courts. Judges will now determine if the sweepstakes rules actually narrowed the original Coinbase user agreement.

While the Court often supports arbitration, this ruling emphasizes that consent is key. Arbitration only happens if the current, valid contract actually requires it.