The U.S. Supreme Court has ruled that Coinbase must face a lawsuit over its 2021 Dogecoin giveaway.
Conflicting Rules
The giveaway’s rules stated that disputes would be resolved in California courts, while Coinbase’s user agreement required arbitration. This led to a class action lawsuit alleging that the giveaway violated the law.
Court’s Decision
The Supreme Court ruled that a court must determine which agreement applies. Justice Ketanji Brown Jackson explained that “arbitration is a matter of contract and consent” and that disputes are subject to arbitration only if both parties agree.
Coinbase’s Response
Coinbase had sought to resolve the dispute through arbitration, but a district court and the Ninth Circuit appellate court denied the motion. The Supreme Court declined to comment on the lower courts’ reasoning but agreed that a court must decide on the applicable agreement.
Implications
This ruling could have implications for other companies that use conflicting terms of service and arbitration clauses. It emphasizes the importance of clear and consistent contract language to avoid legal disputes.
