SCOTUS Resolves Coinbase Arbitration Dispute: Who Decides Which Contract Controls?
On May 23, 2024, the United States Supreme Court issued a unanimous opinion in the much-anticipated case of Coinbase, Inc. v. Suski, 602 U.S. 143 (2024), providing clear guidance on what happens when multiple contracts contain conflicting dispute resolution provisions. The Court concluded that courts—not arbitrators—must determine which contract governs when the parties have entered into more than one agreement with potentially competing arbitration terms.
While the ruling was carefully limited in scope, its impact is substantial, particularly in consumer-facing industries and other commercial contexts where layered contracts and evolving terms are the norm. The case provides clarity on how courts should approach the threshold question of which agreement controls when determining whether a dispute must be arbitrated.
Background: The Coinbase Sweepstakes and Conflicting Agreements
The dispute originated from Coinbase’s promotional Dogecoin sweepstakes. Coinbase, one of the world’s largest cryptocurrency exchanges, had long included arbitration provisions in its Terms of Service (TOS), requiring users to submit disputes to binding arbitration.
However, when Coinbase launched a limited-time Dogecoin sweepstakes, participants were required to agree to separate sweepstakes rules, which included a forum selection clause requiring disputes to be heard in California state court.
Following the promotion, a group of Coinbase users filed a class action lawsuit in California, alleging that the sweepstakes violated state consumer protection laws. In response, Coinbase moved to compel arbitration, arguing that the arbitration clause in its general TOS should override the California court provision in the sweepstakes agreement.
The Central Question: Who Decides Which Agreement Governs?
The key issue presented to the Court was not whether arbitration was generally enforceable under the Federal Arbitration Act (FAA), nor whether the arbitration provision itself was valid. Instead, the dispute focused on which agreement—the TOS or the sweepstakes rules—should govern the resolution of the conflict, given that both were entered into by the same parties at different times and contained contradictory dispute resolution provisions.
Coinbase argued that the matter should be decided by an arbitrator, citing the delegation clause in the arbitration agreement found in its TOS. That clause provided that arbitrability issues should be resolved by the arbitrator rather than a court.
The plaintiffs, on the other hand, argued that the delegation clause could not apply unless and until it was determined which contract governed—the TOS with the delegation clause or the sweepstakes rules, which required litigation in California courts.
The Supreme Court’s Holding: This Question Is for the Court
In a unanimous opinion delivered by Justice Sotomayor, the Supreme Court ruled that courts must decide which of multiple conflicting contracts governs. The presence of a delegation clause in the arbitration provision of one agreement does not transfer authority to the arbitrator to resolve contract precedence questions when the very applicability of that clause is at issue.
The Court emphasized that the decision was narrowly tailored, addressing only the specific scenario where:
The same parties entered into two or more separate contracts,
Those contracts contain conflicting dispute resolution provisions, and
The question is which contract applies to the present dispute.
Justice Sotomayor wrote:
“Where parties have agreed to two contracts—one sending disputes to arbitration, and the other to court—a court must decide which contract governs.”
Importance of Temporal and Contextual Clarity
One of the factual underpinnings of the decision was that the sweepstakes rules were later in time than the Coinbase general TOS. By agreeing to the sweepstakes-specific rules after already having accepted the general arbitration terms, users effectively superseded the earlier agreement with the more recent one—at least as to the scope of the sweepstakes dispute.
The Court did not opine on how conflicting clauses within a single contract should be handled, nor did it diminish the enforceability of delegation clauses in most contexts. Rather, the decision focused squarely on the threshold issue of contract formation and interpretation, which lies squarely within the court’s jurisdiction.
Practical Takeaways for Contract Drafters and Litigators
This decision is a reminder of several important drafting and litigation considerations:
Avoid Conflicting Dispute Provisions: Multiple agreements should be carefully harmonized to prevent confusion about where disputes should be resolved.
Be Explicit About Hierarchies: Include express statements about which agreement supersedes others when multiple contracts are contemplated.
Recognize the Limits of Delegation Clauses: While delegation clauses are enforceable, they cannot decide their own applicability when the very existence or scope of the arbitration agreement is in dispute due to multiple contracts.
Expect Judicial Review in Layered Agreements: In scenarios where contracts have evolved over time or contain product-specific terms, courts—not arbitrators—will resolve which terms control.
Timeline and Context Matter: Later-signed agreements often control, especially when entered into in connection with a distinct transaction or event, as was the case with the sweepstakes promotion.
Broader Implications for Arbitration Law
While the Coinbase ruling is specific to a narrow issue, it further reinforces a growing theme in Supreme Court arbitration jurisprudence: courts must serve as gatekeepers in determining whether and how arbitration applies. Parties cannot rely solely on delegation language to avoid judicial scrutiny when there is a real dispute about which contract controls.
This ruling is particularly relevant in sectors such as:
Consumer services, where online terms may be updated frequently
Employment, where multiple agreements are signed over time (e.g., offer letters, handbooks, NDAs)
Technology platforms, where user agreements evolve with product offerings
In each case, clarity and consistency in arbitration-related provisions are essential.
Nationwide ADR: Clarity and Confidence in Arbitration
Conflicts over multiple agreements, forum selection, and arbitrability are increasingly common in modern litigation. At Nationwide ADR, arbitration and mediation services are built on a foundation of clarity, fairness, and contractual integrity.
Whether resolving business disputes, consumer matters, tort claims, or employment disagreements, Nationwide ADR helps parties cut through ambiguity and focus on efficient, neutral resolution.
Unlocking Solutions for Demanding Cases
Trusted. Balanced. Resolution Driven.
To learn more about arbitration and mediation services designed to navigate complex procedural issues, visit NationwideADR.com.