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The Federal Arbitration Act (FAA) governs most arbitration proceedings in the United States. This past year, the Supreme Court issued three important decisions interpreting the FAA:
Coinbase v. Suski (May 23, 2024). The Court held that where there is a conflict between one or more contracts regarding the arbitrability of a dispute, a court alone (and not the arbitrator) must decide which contract governs.
The case involved a dispute between Coinbase, an operator of a cryptocurrency platform and an individual. Coinbase’s user agreement contained an arbitration clause. But when it ran a sweepstakes, the official rules of the sweepstakes contained a forum selection clause which gave sole jurisdiction over sweepstakes-related disputes to California courts, with no mention of arbitration. The Supreme Court held that courts, not arbitrators, must decide the threshold question of whether a subsequent agreement supersedes an arbitration provision.
Smith v. Spizzirri (May 16, 2024), the Supreme Court construed a provision of the FAA, 9 U.S.C. § 3, to mean that when a district court finds that a contract compels arbitration and a party has requested a stay of court proceedings pending arbitration, the court lacks jurisdiction to dismiss the suit. Instead, the lower court must stay the proceedings until the dispute is resolved in arbitration or the dispute is brought back before the court.
Bissonnette v. LePage Bakeries Park St. LLC (May 14, 2024) – The FAA, which mandates arbitration where agreed to by contract, contains an exemption specifying that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. §1. The Supreme Court previously limited this to transportation workers, not just any workers who work for a company engaged in interstate commerce. Circuit City Stores, Inc. v. Adams, 532 U. S. 105 (2001).
In Bissonette, the Court held that a transportation worker need not be employed in a transportation industry (e.g., trucking or railroads), but any worker who is actively engaged in transportation of goods in interstate or foreign commerce is exempt, even if the employer has a different business. Bissonette was a franchisee of Flower Foods, an industrial producer of baked goods distributed throughout the country.
The Court still left open whether Bissonette was indeed a “transportation worker,” which apparently depends on his primary responsibility. But the fact that his employer is a baked goods manufacturer, rather than a trucking company, makes no difference.
Coinbase v. Suski (May 23, 2024). The Court held that where there is a conflict between one or more contracts regarding the arbitrability of a dispute, a court alone (and not the arbitrator) must decide which contract governs.
The case involved a dispute between Coinbase, an operator of a cryptocurrency platform and an individual. Coinbase’s user agreement contained an arbitration clause. But when it ran a sweepstakes, the official rules of the sweepstakes contained a forum selection clause which gave sole jurisdiction over sweepstakes-related disputes to California courts, with no mention of arbitration. The Supreme Court held that courts, not arbitrators, must decide the threshold question of whether a subsequent agreement supersedes an arbitration provision.
Smith v. Spizzirri (May 16, 2024), the Supreme Court construed a provision of the FAA, 9 U.S.C. § 3, to mean that when a district court finds that a contract compels arbitration and a party has requested a stay of court proceedings pending arbitration, the court lacks jurisdiction to dismiss the suit. Instead, the lower court must stay the proceedings until the dispute is resolved in arbitration or the dispute is brought back before the court.
Bissonnette v. LePage Bakeries Park St. LLC (May 14, 2024) – The FAA, which mandates arbitration where agreed to by contract, contains an exemption specifying that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. §1. The Supreme Court previously limited this to transportation workers, not just any workers who work for a company engaged in interstate commerce. Circuit City Stores, Inc. v. Adams, 532 U. S. 105 (2001).
In Bissonette, the Court held that a transportation worker need not be employed in a transportation industry (e.g., trucking or railroads), but any worker who is actively engaged in transportation of goods in interstate or foreign commerce is exempt, even if the employer has a different business. Bissonette was a franchisee of Flower Foods, an industrial producer of baked goods distributed throughout the country.
The Court still left open whether Bissonette was indeed a “transportation worker,” which apparently depends on his primary responsibility. But the fact that his employer is a baked goods manufacturer, rather than a trucking company, makes no difference.