A split US Supreme Court decision allowing Coinbase Global Inc. to pause a lawsuit while it appealed a dispute over sending claims to arbitration will affect a broad array of cases and potentially weaken plaintiffs’ leverage in settlement talks, attorneys said.
The justices’ 5-4 ruling last week came in litigation demanding that the cryptocurrency exchange platform compensate a user who said he lost $31,000 after a scammer gained remote access to his account. Resolving a circuit split, the majority found that underlying litigation can be stayed while an appeal goes forward challenging the denial of a motion to compel arbitration. …
The Supreme Court’s decision adds to decades of precedent bolstering arbitration protections that favor companies. But it leaves some unanswered questions, too, like how rigidly courts will interpret the automatic stay that takes affect once a motion to compel denial is appealed. …
A case could lose crucial evidence if discovery is delayed while a witness is on her deathbed, for example, as Justice Ketanji Brown Jackson wrote in the dissent.
While Jackson’s discovery hypothetical is plausible, any potential issues left open by the ruling will be addressed by courts down the road, said Stuart Gerson, a defense-side litigation attorney at Epstein Becker & Green PC. He previously served as acting attorney general under the Clinton administration.
“Maybe in the future, some question of modifying the stay to account for extraneous circumstances might be on the table,” he said.