Coinbase operates an online platform on which users can buy and sell cryptocurrencies and government-issued currencies. When creating a Coinbase account, individuals agree to the terms in Coinbase’s User Agreement that contains an arbitration provision, which directs that disputes arising under the agreement be resolved through binding arbitration.

Abraham Bielski filed a putative class action on behalf of Coinbase users in the U. S. District Court for the Northern District of California. alleging that Coinbase 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 to stay District Court proceedings pending resolution of the arbitrability issue on appeal. The District Court declined to stay its proceedings. After receiving Coinbase’s motion for a stay, the Ninth Circuit likewise declined to stay the District Court’s proceedings.

The Ninth Circuit followed its precedent, under which an appeal from the denial of a motion to compel arbitration does not automatically stay district court proceedings. See Britton v. Co-op Banking Group, 916 F. 2d 1405, 1412 (1990).

By contrast, however, most other Courts of Appeals to address the question have held that a district court must stay its proceedings while the interlocutory appeal on the question of arbitrability is ongoing. E.g., Bradford-Scott Data Corp. v. Physician Computer Network, Inc., 128 F. 3d 504, 506 (CA7 1997).

To resolve that disagreement among the Courts of Appeals, the Supreme Court of the United States granted certiorari. 598 U. S. ___ (2022), and ruled in favor of Coinbase when it held that a district court must stay its proceedings while an interlocutory appeal on the question of arbitrability is ongoing in the case of Coinbase Inc., v Bielski – 22-105_5536 (June 2023).

Section 16(a) does not say whether district court proceedings must be stayed pending resolution of an interlocutory appeal.

But the Opinion noted that “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.”

“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 ‘nonstay’ provisions.