Coinbase, Inc. v. Bielski, 599 U.S. ___ (2023)
Bielski filed a putative class action, alleging that Coinbase, an online currency platform, failed to replace funds fraudulently taken from its users’ accounts. Coinbase’s User Agreement provides for binding arbitration. The district court denied Coinbase’s motion to compel arbitration. Coinbase then filed an interlocutory appeal under the Federal Arbitration Act, 9 U.S.C. 16(a), and moved the district court to stay its proceedings. The district court and Ninth Circuit denied stay motions.
The Supreme Court reversed. A district court must stay its proceedings while an interlocutory appeal on the question of arbitrability is ongoing. Section 16(a) does not say whether district court proceedings must be stayed pending resolution of an interlocutory appeal but an appeal, including an interlocutory appeal, “divests the district court of its control over those aspects of the case involved in the appeal.” Because the question on appeal is whether the case belongs in arbitration or in court, the entire case is essentially “involved in the appeal,” and precedent requires that the court stay its proceedings while the interlocutory appeal on arbitrability is ongoing. If the court could move forward with proceedings while the appeal was ongoing, many of the asserted benefits of arbitration (efficiency, less expense, less intrusive discovery) would be irretrievably lost. Absent a stay, parties could be forced to settle to avoid discovery and trial that they contracted to avoid through arbitration. When Congress wants to authorize an interlocutory appeal, but not to automatically stay district court proceedings pending that appeal, Congress typically says so.
Supreme Court holds that a district court must stay its proceedings while an interlocutory appeal on the question of arbitrability is ongoing.
SUPREME COURT OF THE UNITED STATES
Syllabus
COINBASE, INC. v. BIELSKI
certiorari to the united states court of appeals for the ninth circuit
No. 22–105. Argued March 21, 2023—Decided June 23, 2023
Abraham Bielski filed a putative class action on behalf of Coinbase users alleging that Coinbase, an online currency platform, failed to replace funds fraudulently taken from the users’ accounts. Because Coinbase’s User Agreement provides for dispute resolution through binding arbitration, Coinbase filed a motion to compel arbitration. The District Court denied the motion. Coinbase then filed an interlocutory appeal to the Ninth Circuit under the Federal Arbitration Act, 9 U. S. C. §16(a), which authorizes an interlocutory appeal from the denial of a motion to compel arbitration. Coinbase also moved the District Court to stay its proceedings pending resolution of the interlocutory appeal. The District Court denied Coinbase’s stay motion, and the Ninth Circuit likewise declined to stay the District Court’s proceedings pending appeal.
Held: A district court must stay its proceedings while an interlocutory appeal on the question of arbitrability is ongoing. Pp. 2–10.
(a) Section 16(a) does not say whether district court proceedings must be stayed pending resolution of an interlocutory appeal. But Congress enacted the provision against a clear background principle prescribed by this Court’s precedents: An appeal, including an interlocutory appeal, “divests the district court of its control over those aspects of the case involved in the appeal.” Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58. The Griggs principle resolves this case. Because the question on appeal is whether the case belongs in arbitration or instead in the district court, the entire case is essentially “involved in the appeal,” id., at 58, and Griggs dictates that the district court stay its proceedings while the interlocutory appeal on arbitrability is ongoing. Most courts of appeals to address this question, as well as leading treatises, agree with that conclusion.
The common practice of staying district court proceedings during the pendency of an interlocutory appeal taken under §16(a) reflects common sense. If the district court could move forward with pre-trial and trial proceedings while the appeal on arbitrability was ongoing, then many of the asserted benefits of arbitration (efficiency, less expense, less intrusive discovery, and the like) would be irretrievably lost—even if the court of appeals later concluded that the case actually had belonged in arbitration all along. Absent a stay, parties also could be forced to settle to avoid the district court proceedings (including discovery and trial) that they contracted to avoid through arbitration. The Griggs rule avoids these detrimental results.
Congress’s longstanding practice reflects the Griggs rule. Given Griggs, when Congress wants to authorize an interlocutory appeal and to automatically stay the district court proceedings during that appeal, Congress ordinarily need not say anything about a stay. By contrast, when Congress wants to authorize an interlocutory appeal, but not to automatically stay district court proceedings pending that appeal, Congress typically says so. Since the creation of the modern courts of appeals system in 1891, Congress has enacted multiple statutory “non-stay” provisions. Pp. 2–7.
(b) Bielski’s arguments to overcome the Griggs principle are unpersuasive. First, the courts of appeals possess robust tools to prevent unwarranted delay and deter frivolous interlocutory appeals that an automatic stay might otherwise encourage. Second, Congress included explicit stay requirements in two other statutory provisions for reasons particular to those statutes, not because Congress thought that an interlocutory appeal did not ordinarily stay district court proceedings. Third, the result here does not create a special, arbitration-preferring procedural rule, but simply subjects arbitrability appeals to the same stay principles that courts apply in other analogous contexts where an interlocutory appeal is authorized. Fourth, experience shows that ordinary discretionary stay factors would not adequately protect parties’ rights to an interlocutory appellate determination of arbitrability. In any event, the background Griggs rule applies regardless of how often courts might otherwise grant stays under the ordinary discretionary stay factors. Fifth, while the Court has recognized that questions of arbitrability are severable from merits questions, the sole issue here is whether the district court’s authority to consider a case is “involved in the appeal” when an appellate court considers the threshold question of arbitrability, Griggs, 459 U. S., at 58. The answer is yes. Pp. 7–10.
Reversed and remanded.
Kavanaugh, J., delivered the opinion of the Court, in which Roberts, C. J., and Alito, Gorsuch, and Barrett, JJ., joined. Jackson, J., filed a dissenting opinion, in which Sotomayor and Kagan, JJ., joined in full, and in which Thomas, J., joined as to Parts II, III and IV.
Judgment issued. |
Judgment REVERSED and case REMANDED as to respondent Abraham Bielski; the writ of certiorari as to respondents David Suski, et al. is DIMSISSED as improvidently granted. Kavanaugh, J., delivered the opinion of the Court, in which Roberts, C. J., and Alito Gorsuch, and Barrett, JJ., joined. Jackson, J., filed a dissenting opinion, in which Sotomayor and Kagan, JJ., joined in full, and in which Thomas, J., joined as to Parts II, III and IV. |
Argued. For petitioner: Neal K. Katyal, Washington, D. C. For respondents: Hassan A. Zavareei, Washington, D. C. |
Response to suggestion of mootness from respondents Suski et al. filed. (Distributed) |
Respondent Abraham Bielski's Notice of Withdrawal of Suggestion of Mootness in Coinbase, Inc. v. Suski of Abraham Bielski submitted. |
Notice of withdrawal of his suggestion of mootness as to Coinbase, Inc. v. Suski, et al, filed by respondent Abraham Bielski. (Distributed) |
Reply of petitioner Coinbase, Inc. filed. (Distributed) |
Response to Suggestion of Mootness of Coinbase, Inc. submitted. |
Response to suggestion of mootness as to Coinbase, Inc. v. Suski, et al., filed by petitioner Coinbase, Inc.. (Distributed) |
Motion for divided argument filed by respondents DENIED. |
Respondent Abraham Bielski’s Suggestion of Mootness in Coinbase, Inc. v. Suski of Abraham Bielski submitted. |
Suggestion of mootness filed by respondent Abraham Bielski. (Distributed) |
Suggestion of mootness as to Coinbase, Inc. v. Suski, et al., filed by respondent Abraham Bielski. (Distributed) |
Amicus brief of Public Justice submitted. |
Amicus brief of Constitutional Accountability Center submitted. |
Amicus brief of American Association for Justice submitted. |
Brief amicus curiae of Public Justice filed. (Distributed) |
Brief amicus curiae of American Association for Justice filed. (Distributed) |
Brief amicus curiae of Constitutional Accountability Center filed. (Distributed) |
Motion for divided argument filed by respondents. |
Motion of Abraham Bielski for divided argument submitted. |
Motion for divided argument filed by respondents Abraham Bielski. |
Brief of Abraham Bielski submitted. |
Brief of David Suski, et al. submitted. |
Brief of respondents David Suski, et al. filed. (Distributed) |
Brief of respondent Abraham Bielski filed. (Distributed) |
Letter of petitioner notifying the Court of the Ninth Circuit's deferral of appeal in No. 22-15566, pending this Court's decision in Coinbase, Inc. v. Bielski, filed. (Distributed) |
Letter re: Bielski Ninth Circuit Proceedings of Coinbase, Inc. submitted. |
CIRCULATED |
All records from the USCA-9th Circuit and USDC-ND California are available on PACER. |
Record requested from the U.S.C.A. for the Ninth Circuit. |
SET FOR ARGUMENT on Tuesday, March 21, 2023. |
Brief amicus curiae of Atlantic Legal Foundation filed. |
Brief amicus curiae of Civil Justice Association of California filed. |
Brief amicus curiae of National Retail Federation filed. |
Brief amicus curiae of Washington Legal Foundation filed. |
Brief amicus curiae of Retail Litigation Center, Inc. filed. |
Brief amicus curiae of DRI Center for Law and Public Policy filed. (February 22, 2023 - corrected brief and PDF). (Distributed) |
Brief amicus curiae of DRI Center for Law and Public Policy filed.(Feb. 16, 2023) (Distributed) |
Brief amici curiae of Chamber of Commerce of the United States of America and the National Federation of Independent Business Small Business Legal Center filed. |
Amicus brief of DRI Center for Law and Public Policy submitted. |
Letter of respondent Abraham Bielski regarding proceedings in the CA-9 Circuit filed. (Distributed) |
Letter of petitioner Coinbase, Inc. regarding proceedings in the CA-9 Circuit filed. (Distributed) |
Brief of petitioner Coinbase, Inc. filed. |
Joint appendix Volume I & II filed. (Statement of costs filed) |
Petition GRANTED. |
DISTRIBUTED for Conference of 12/9/2022. |
Letter from petitioner received. |
Supplemental brief of respondents David Suski, et al. filed. (Distributed) |
Supplemental brief of respondent Abraham Bielski filed. (Distributed) |
Supplemental brief of petitioner Coinbase, Inc. filed. (Distributed) |
DISTRIBUTED for Conference of 12/2/2022. |
Reply of petitioner Coinbase, Inc. filed. (Distributed) |
Brief of respondents David Suski, et al. in support filed. |
Response Requested. (Due October 31, 2022) |
DISTRIBUTED for Conference of 10/7/2022. |
Reply of Coinbase, Inc. not accepted for filing. (Corrected version to be submitted) (September 20, 2022) |
Reply of petitioner Coinbase, Inc. filed. (Distributed) |
Brief of respondent Abraham Bielski in opposition filed. |
Waiver of right of respondents David Suski, et al. to respond filed. |
Motion to expedite consideration filed by petitioner DENIED. |
Application (22A91) referred to the Court. |
Application (22A92) referred to the Court. |
Application (22A91) denied by the Court. |
Application (22A92) denied by the Court. |
Reply of applicant Coinbase, Inc. filed. |
Response to motion to expedite from respondent Abraham Bielski filed. |
Response to application (22A91) from respondent Abraham Bielski filed. |
Letter in response to application (22A92) received from respondents David Suski, et al. |
Letter in response to motion to expedite received from respondents David Suski, et al. |
Response to application (22A91) requested by Justice Kagan, due by 5 p.m. (ET) on Monday, August 8, 2022. |
Response to application (22A92) requested by Justice Kagan, due by 5 p.m. (ET) on Monday, August 8, 2022. |
Respondents are directed to respond to the motion to expedite consideration by 5 p.m. (ET) on Monday, August 8, 2022. |
Application (22A91) for a stay, submitted to Justice Kagan. |
Motion to expedite consideration of the petition for a writ of certiorari filed by petitioner. |
Application (22A92) for a stay, submitted to Justice Kagan. |
Petition for a writ of certiorari filed. (Response due September 2, 2022) |