In a victory for parties seeking to compel arbitration, the U.S. Supreme Court held that a district court must stay the proceedings when a party seeks interlocutory appeal of an order denying a motion to compel arbitration.
Abraham Bielski filed a putative class action against online currency platform Coinbase, Inc. after a scammer emptied his account of more than $31,000.
Coinbase responded with a motion to compel arbitration pursuant to the agreement users sign for its online platform, which contains an arbitration provision.
A California federal court denied the motion. Coinbase filed an interlocutory appeal to the Ninth Circuit Court of Appeals and also moved to stay the district court proceedings pending resolution of the arbitrability issue on appeal.
The district court declined to stay its proceedings. The Ninth Circuit also declined to stay the district court proceedings, following its precedent under which an appeal from the denial of a motion to compel arbitration does not automatically stay district court proceedings – in contrast to the majority of the federal appellate courts.
Coinbase filed a petition for certiorari with the Supreme Court, which the justices granted to resolve the disagreement among the circuits.
Justice Brett Kavanaugh authored the majority opinion, which reversed the Ninth Circuit to hold that a district court must stay its pretrial and trial proceedings while the interlocutory appeal on arbitrability is ongoing.
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