20 MARCH 2023. Tycko & Zavareei LLP Partner Hassan Zavareei will represent consumer Abraham Bielski and other customers of cryptocurrency exchange Coinbase, Inc. in oral argument before the United States Supreme Court on Tuesday, March 21, 2023. The question before the court is: “Does an interlocutory appeal of a denial of a motion to compel arbitration under Section 16(a) of the Federal Arbitration Act require an automatic stay of all district court proceedings pending appeal?” That is, when a party files a motion to compel arbitration and the district court rules that arbitration is not required (such as if the arbitration agreement is held to be unlawful), does the whole case have to be stayed while the appeal is ongoing, or can the case continue forward in the trial court?
Respondent Abraham Bielski was a customer of Coinbase’s online currency and cryptocurrency exchange platform. In 2021, Mr. Bielski was defrauded of more than $30,000 on Coinbase’s platform. He alleges he filed a lawsuit only after he contacted Coinbase for assistance but received no response. Coinbase tried to force Mr. Bielski to resolve his suit in arbitration, but a federal district court ruled that the one-sided arbitration provisions in Coinbase’s user agreement were unconscionable and unenforceable under California Law. The cryptocurrency exchange then appealed that decision to the U.S. Court of Appeals for the Ninth Circuit and petitioned the U.S. Supreme court for a writ of certiorari for review of the case.
In February, the Ninth Circuit heard oral argument on the appeal. Glenn E. Chappell, chair of TZ’s Appellate Practice Group, urged the Ninth Circuit panel to uphold the district court’s ruling. The Ninth Circuit will announce its decision after the Supreme Court rules on the stay issue.
“We are grateful for the opportunity to advocate for Mr. Bielski and consumers like him in the Supreme Court,” said Mr. Chappell. “Our goal in the Supreme Court, the Ninth Circuit, and the trial court is the same: to move the litigation forward as quickly as possible so that consumers who lost their money to scammers on Coinbase’s platform can obtain relief as quickly as possible.”
The cases are Coinbase, Inc. v. Bielski, No. 22-105 (Supreme Court) and Bielski v. Coinbase, Inc., No. 22-15566 (9th Circuit).