AUTHOR*
Hon. Michelle R. Rosenblatt (Ret.)
Coinbase, Inc. v. Suski, 144 S. Ct. 1186 (2024)
Coinbase operates a cryptocurrency exchange platform. Its users must sign an agreement when creating their accounts that contains an arbitration agreement with a delegation clause: the arbitrator must decide all disputes under the contract, including whether a given dispute is arbitrable. Users who participated in a Coinbase sweepstake sued Coinbase in a class action. The sweepstake contract contained a forum selection clause stating that California courts "shall have sole jurisdiction of any controversies regarding the [sweepstakes] promotion." Coinbase contended that the arbitrator decides arbitrability. The users contended that the courts decide arbitrability.
This case tackled the issue of who decides arbitrability where there are multiple seemingly conflicting contracts. The U.S. Supreme Court noted: "Courts shall not assume parties have agreed to arbitrate 'arbitrability' unless there is clear and unmistakable evidence that they did so."1
It then held that where the parties have agreed to two contracts—one delegating arbitrability to the arbitrator and the other, either explicitly or implicitly, sending arbitrability disputes to the courts—the court, rather than the arbitrator, must decide which contract governs.
Soltero v. Precise Distribution, Inc., 322 Cal. Rptr. 3d 133 (2024)
Nelida Soltero signed an employment contract with a temporary staffing agency, Real Time Staffing Services, LLC. The contract contained an arbitration clause that defined "the company" to include multiple entities, but not its clients. Real Time placed Soltero as a temporary worker with one of its clients, Precise Distribution, Inc. Soltero had no arbitration agreement with Precise. She worked at Precise from October 2017 through January 2021.
Subsequently, Soltero filed a wage and hour class action against Precise; Real Time was not named as a defendant. Precise filed a motion to compel arbitration. Although Precise was not a signatory, it argued it was entitled to compel arbitration based on theories of equitable estoppel, third party beneficiary, and agency.
The appellate court explained and dispensed with each of the issues raised in the case, as summarized here.
Equitable estoppel: To rely on this doctrine, the claims plaintiff asserts against the non-signatory must depend upon or be inextricably intertwined with the underlying contractual obligations contained in the arbitration clause. In her complaint, Soltero does not mention or rely on her employment agreement.
Third party beneficiary: For the court to find that the non-signatory is a third party beneficiary to the arbitration agreement, Precise would have to show that the arbitration clause was made expressly for its benefit. To the contrary, the arbitration clause in this case expressly excludes clients, and Precise was a client.
Agency: The court of appeal noted that a principal-agent relationship does not arise as a matter of law whenever a staffing agency provides a client with a temporary worker. To find such a relationship, there must be evidence that the staffing agency and the client exercised control over one another. Agency was not alleged in the complaint and no evidence of control was offered.
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Ramirez v. Charter Communications, Inc., 16 Cal. 5th 478 (2024)
This case centered on several provisions in an arbitration agreement. It required the employee losing a motion to compel arbitration to pay the employer's attorney's fees, required the employee to pay the employer's attorney's fees without a finding that employee's claim was frivolous or groundless, and shortened the time limits for filing claims.
The trial court concluded the agreement's provisions were unconscionable, and...
