# Coinbase, Inc. v. Bielski/Opinion of the Court

Notice: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 22–105
COINBASE, INC., PETITIONER v. ABRAHAM BIELSKI ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT [June 23, 2023]
Justice Kavanaugh delivered the opinion of the Court.
When a federal district court denies a motion to compel arbitration, the losing party has a statutory right to an interlocutory appeal. See 9 U. S. C. §16(a). The sole question here is whether the district court must stay its pre-trial and trial proceedings while the interlocutory appeal is ongoing. The answer is yes: The district court must stay its proceedings.
I
Coinbase operates an online platform on which users can buy and sell cryptocurrencies and government-issued currencies. When creating a Coinbase account, individuals agree to the terms in Coinbase’s User Agreement. As relevant here, the User Agreement contains an arbitration provision, which directs that disputes arising under the agreement be resolved through binding arbitration.
This case concerns a putative class action filed against Coinbase in the U. S. District Court for the Northern District of California. Abraham Bielski sued on behalf of Coinbase users who allege that Coinbase failed to replace funds fraudulently taken from the users’ accounts.
The District Court denied Coinbase’s motion to compel ​arbitration. Coinbase then filed an interlocutory appeal to the U. S. Court of Appeals for the Ninth Circuit under 9 U. S. C. §16(a). Section 16(a) authorizes an interlocutory appeal from the denial of a motion to compel arbitration.
Coinbase also moved to stay District Court proceedings pending resolution of the arbitrability issue on appeal. The District Court declined to stay its proceedings. After receiving Coinbase’s motion for a stay, the Ninth Circuit likewise declined to stay the District Court’s proceedings. The Ninth Circuit followed its precedent, under which an appeal from the denial of a motion to compel arbitration does not automatically stay district court proceedings. See Britton v. Co-op Banking Group, 916 F. 2d 1405, 1412 (1990). By contrast, however, most other Courts of Appeals to address the question have held that a district court must stay its proceedings while the interlocutory appeal on the question of arbitrability is ongoing. E.g., Bradford-Scott Data Corp. v. Physician Computer Network, Inc., 128 F. 3d 504, 506 (CA7 1997).
To resolve that disagreement among the Courts of Appeals, we granted certiorari. 598 U. S. ___ (2022).
II
The Federal Arbitration Act governs arbitration agreements. In 1988, Congress passed and President Reagan signed an amendment to the Act; the amendment is codified at 9 U. S. C. §16(a). Under §16(a), when a ​district court denies a party’s motion to compel arbitration, that party may take an interlocutory appeal. Section 16(a) creates a rare statutory exception to the usual rule that parties may not appeal before final judgment. See Mohawk Industries, Inc. v. Carpenter, 558 U. S. 100, 108–109 (2009). Notably, Congress provided for immediate interlocutory appeals of orders denying—but not of orders granting—motions to compel arbitration.
The sole question before this Court is whether a district court must stay its proceedings while the interlocutory appeal on arbitrability is ongoing. The answer is yes.
Section 16(a) does not say whether the district court proceedings must be stayed. But Congress enacted §16(a) against a clear background principle prescribed by this Court’s precedents: An appeal, including an interlocutory appeal, “divests the district court of its control over those aspects of the case involved in the appeal.” Griggs v. Provident Consumer Discount Co., 459 U. S. 56, 58 (1982). That Griggs principle reflects a longstanding tenet of American procedure. See Hovey v. McDonald, 109 U. S. 150, 157 (1883); see also Price v. Dunn, 587 U. S. ___, ___ (2019) (Thomas, J., joined by Alito and Gorsuch, JJ., concurring in denial of certiorari) (slip op., at 7) (describing Griggs principle as “well settled”); Marrese v. American Academy of Orthopaedic Surgeons, 470 U. S. 373, 379 (1985) (“In general, filing of a notice of appeal confers jurisdiction on the court of appeals and divests the district court of control over those aspects of the case involved in the appeal”).
The Griggs principle resolves this case. Because the question on appeal is whether the case belongs in arbitration or instead in the district court, the entire case is essentially “involved in the appeal.” 459 U. S., at 58. As Judge Easterbrook cogently explained, when a party appeals the denial of a motion to compel arbitration, whether “the litigation may go forward in the district court ​is precisely what the court of appeals must decide.” Bradford-Scott Data Corp. v. Physician Computer Network, Inc., 128 F. 3d 504, 506 (CA7 1997). Stated otherwise, the question of whether “the case should be litigated in the district court … is the mirror image of the question presented on appeal.” Id., at 505. Here, as elsewhere, it “makes no sense for trial to go forward while the court of appeals cogitates on whether there should be one.” Apostol v. Gallion, 870 F. 2d 1335, 1338 (CA7 1989). In short, Griggs dictates that the district court must stay its proceedings while the interlocutory appeal on arbitrability is ongoing.
Most courts of appeals to address the question in the §16(a) context have reached that same conclusion. E.g., Blinco v. Green Tree Servicing, LLC, 366 F. 3d 1249, 1253 (CA11 2004) (“[I]t makes little sense for the litigation to continue in the district court while the appeal is pending”). Leading treatises agree that a district court should stay its proceedings while the interlocutory appeal on arbitrability is ongoing. For example, Moore’s treatise states that a “stay in these circumstances” is “the sounder approach” and “is consistent with the general [Griggs] principle that a district court should not exercise jurisdiction over those aspects of the case that are involved in the appeal.” 19 J. Moore, D. ​Coquillette, G. Joseph, G. Vairo, & C. Varner, Moore’s Federal Practice §203.12[a] (3d ed. 2022). Similarly, the Wright and Miller treatise endorses the automatic stay requirement in arbitration cases. The treatise explains that a “complete stay of district-court proceedings pending appeal from a refusal to order arbitration is desirable” because “[c]ontinued trial-court proceedings pending appeal could lead to an entirely wasted trial if arbitration is ordered on appeal.” 15B C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure §3914.17, p. 7 (2d ed., Supp. 2022). In the Circuits that have considered the issue in the analogous contexts of qualified immunity and double jeopardy, moreover, district courts likewise must automatically stay their proceedings while the interlocutory appeal is ongoing. Similarly, as Bielski acknowledges, courts have held that the Griggs principle applies to those aspects of the case involved in a certified interlocutory appeal under 28 U. S. C. §1292(b).
The common practice in §16(a) cases, therefore, is for a district court to stay its proceedings while the interlocutory appeal on arbitrability is ongoing. That common practice reflects common sense. Absent an automatic stay of district court proceedings, Congress’s decision in §16(a) to afford a right to an interlocutory appeal would be largely nullified. ​If the district court could move forward with pre-trial and trial proceedings while the appeal on arbitrability was ongoing, then many of the asserted benefits of arbitration (efficiency, less expense, less intrusive discovery, and the like) would be irretrievably lost—even if the court of appeals later concluded that the case actually had belonged in arbitration all along. Absent a stay, parties also could be forced to settle to avoid the district court proceedings (including discovery and trial) that they contracted to avoid through arbitration. That potential for coercion is especially pronounced in class actions, where the possibility of colossal liability can lead to what Judge Friendly called “blackmail settlements.” H. Friendly, Federal Jurisdiction: A General View 120 (1973).
As Judge Easterbrook stated, continuation of proceedings in the district court “largely defeats the point of the appeal.” Bradford-Scott, 128 F. 3d, at 505. A right to interlocutory appeal of the arbitrability issue without an automatic stay of the district court proceedings is therefore like a lock without a key, a bat without a ball, a computer without a keyboard—in other words, not especially sensible.
From the Judiciary’s institutional perspective, moreover, allowing a case to proceed simultaneously in the district court and the court of appeals creates the possibility that the district court will waste scarce judicial resources—which could be devoted to other pressing criminal or civil matters—on a dispute that will ultimately head to arbitration in any event. That scenario represents the “worst possible outcome” for parties and the courts: litigating a dispute in the district court only for the court of appeals to “reverse and order the dispute arbitrated.” Id., at 506. The Griggs rule avoids that detrimental result.
Importantly, Congress’s longstanding practice both reflects and reinforces the Griggs rule. When Congress wants to authorize an interlocutory appeal and to automatically stay the district court proceedings during ​that appeal, Congress need not say anything about a stay. At least absent contrary indications, the background Griggs principle already requires an automatic stay of district court proceedings that relate to any aspect of the case involved in the appeal. By contrast, when Congress wants to authorize an interlocutory appeal, but not to automatically stay district court proceedings pending that appeal, Congress typically says so. Since the creation of the modern courts of appeals system in 1891, Congress has enacted multiple statutory “non-stay” provisions. Indeed, Congress enacted a “non-stay” provision the day before enacting §16(a) in 1988. See 102 Stat. 4120 (“Neither the application for, nor the granting of, an appeal … shall stay proceedings in the Court of Veterans Appeals”).
In short, the Griggs rule requires that a district court stay its proceedings while the interlocutory appeal on the question of arbitrability is ongoing.
III
To overcome the Griggs principle, Bielski advances five main arguments. None is persuasive.
First, Bielski contends that an automatic stay would encourage frivolous appeals that would improperly delay district court proceedings. To begin with, Bielski has not established that frivolous appeals frequently occur in the Circuits that have long applied the Griggs principle in ​arbitration cases. Cf. Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U. S. ___, ___ (2019) (slip op., at 8). Nor does Bielski argue that Coinbase’s appeal in this case is frivolous. Importantly, moreover, the courts of appeals possess robust tools to prevent unwarranted delay and deter frivolous interlocutory appeals. For example, a party can ask the court of appeals to summarily affirm, to expedite an interlocutory appeal, or to dismiss the interlocutory appeal as frivolous. In addition, nearly every circuit has developed a process by which a district court itself may certify that an interlocutory appeal is frivolous. Brief for Petitioner 51; see also Arthur Andersen LLP v. Carlisle, 556 U. S. 624, 629 (2009) (“Appellate courts can streamline the disposition of meritless claims and even authorize the district court’s retention of” a case “when an appeal is certified as frivolous”). Finally, a court of appeals may impose sanctions where appropriate; the possibility of sanctions also helps deter frivolous appeals. See Fed. Rule App. Proc. 38; Arthur Andersen, 556 U. S., at 629.
Second, Bielski contrasts §16(a) with two other statutory provisions that contain an explicit stay requirement—§3 of the Federal Arbitration Act and §1292(d)(4) of Title 28. Bielski suggests that Congress would not have included those explicit stay requirements in §3 and §1292(d)(4) unless Congress thought that an interlocutory appeal did not ordinarily stay district court proceedings. Bielski is wrong.
Section 3 of the Act provides for a stay of court proceedings pending arbitration, not pending an appeal. That situation does not fall within the Griggs rule. No background principle requires automatic stays of district court proceedings pending arbitration. In order to automatically stay court proceedings pending arbitration in those cases, Congress therefore affirmatively codified a stay requirement.
As to §1292(d)(4): When Congress added §1292(d)(4)’s ​stay requirement in 1988, the relevant subsection already contained a provision, §1292(d)(3), that expressly made stays of proceedings in certain courts discretionary rather than mandatory. To avoid any misinterpretation of §1292(d)(4) because of that preexisting language in §1292(d)(3), Congress specified the right to an automatic stay pending appeal in §1292(d)(4). That unusual circumstance does not diminish the operation of the Griggs rule in the context of arbitrability appeals.
Third, Bielski contends that requiring an automatic stay would create a special, arbitration-preferring procedural rule. That is incorrect. In fact, Bielski’s proposed approach would disfavor arbitration. Applying the Griggs rule here simply subjects arbitrability appeals to the same stay principles that courts apply in other analogous contexts where an interlocutory appeal is authorized, including qualified immunity and double jeopardy. Bielski further points to forum selection clauses as an analogy. But unlike §16(a) arbitrability appeals, Congress has not created a right to an interlocutory appeal for cases involving forum selection clauses. So a stay in the forum selection context could be required only in those cases where there is a certified §1292(b) interlocutory appeal of the forum selection issue.
Fourth, Bielski suggests that there is no need for an automatic stay because the ordinary discretionary stay factors would adequately protect parties’ rights to an interlocutory appellate determination of arbitrability. To begin with, experience shows that Bielski is incorrect. District courts and courts of appeals applying the usual four-factor standard for a discretionary stay often deny stays in §16(a) appeals because courts applying that test often do not consider litigation-related burdens (here, from the continued District Court proceedings) to constitute irreparable harm. See Nken v. Holder, 556 U. S. 418, 434–435 (2009); FTC v. Standard Oil Co. of Cal., 449 U. S. 232, ​244 (1980) (“Mere litigation expense, even substantial and unrecoupable cost, does not constitute irreparable injury” (internal quotation marks omitted)); App. to Pet. for Cert. 43a (District Court in Bielski stating that “[m]ere litigation expenses do not generally constitute irreparable injury” for purposes of stay pending appeal). In any event, the background Griggs rule applies regardless of how often courts might otherwise grant stays under the ordinary discretionary stay factors.
Fifth, Bielski relies on this Court’s statement that questions of arbitrability are “severable from the merits of the underlying disputes.” Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 21 (1983). But the sole issue here is whether the district court’s authority to consider a case is “involved in the appeal” when an appellate court considers the threshold question of arbitrability. Griggs, 459 U. S., at 58. The answer is yes, and Moses H. Cone says nothing to the contrary. *** We conclude that, after Coinbase appealed from the denial of its motion to compel arbitration, the District Court was required to stay its proceedings. On remand, we anticipate that the Ninth Circuit here, as we anticipate in §16(a) appeals more generally, will proceed with appropriate expedition when considering Coinbase’s interlocutory appeal from the denial of the motion to compel arbitration. We reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.
It is so ordered.
* ↑ As relevant, the text of §16(a) provides: “An appeal may be taken from … an order … “(A) refusing a stay of any action under section 3 of this title, “(B) denying a petition under section 4 of this title to order arbitration to proceed, “(C) denying an application under section 206 of this title to compel arbitration, “(D) confirming or denying confirmation of an award or partial award, or “(E) modifying, correcting, or vacating an award.”
* ↑ Coinbase concedes that the district court may still proceed with matters that are not involved in the appeal, such as the awarding of costs and attorney’s fees. Brief for Petitioner 21; see also 16A C. Wright, A. Miller, E. Cooper, & C. Struve, Federal Practice and Procedure §3949.1, pp. 68–69 (5th ed. 2019).
* ↑ See also Levin v. Alms & Assoc., Inc., 634 F. 3d 260, 266 (CA4 2011); Ehleiter v. Grapetree Shores, Inc., 482 F. 3d 207, 215, n. 6 (CA3 2007); McCauley v. Halliburton Energy Servs., Inc., 413 F. 3d 1158, 1162–1163 (CA10 2005); Bombardier Corp. v. National R. Passenger Corporation, 333 F. 3d 250, 252 (CADC 2003); Bradford-Scott Data Corp. v. Physician Computer Network, Inc., 128 F. 3d 504, 505–507 (CA7 1997); but see, e.g., Weingarten Realty Investors v. Miller, 661 F. 3d 904, 907–910 (CA5 2011).
* ↑ E.g., United States v. Montgomery, 262 F. 3d 233, 239–240 (CA4 2001) (double jeopardy); United States v. LaMere, 951 F. 2d 1106, 1108 (CA9 1991) (same); United States v. Grabinski, 674 F. 2d 677, 679 (CA8 1982) (same); United States v. Dunbar, 611 F. 2d 985, 988–989 (CA5 1980) (en banc) (same); Chuman v. Wright, 960 F. 2d 104, 105 (CA9 1992) (qualified immunity); Yates v. Cleveland, 941 F. 2d 444, 448–449 (CA6 1991) (same); Apostol v. Gallion, 870 F. 2d 1335, 1338 (CA7 1989) (same); Stewart v. Donges, 915 F. 2d 572, 575–576 (CA10 1990) (both).
* ↑ See Tr. of Oral Arg. 60–61; see also Green Leaf Nursery v. E. I. DuPont De Nemours and Co., 341 F. 3d 1292, 1309 (CA11 2003); Los Angeles v. Santa Monica Baykeeper, 254 F. 3d 882, 885–886 (CA9 2001); Dayton Independent School Dist. v. U. S. Mineral Prods. Co., 906 F. 2d 1059, 1063–1064 (CA5 1990).
* ↑ Act of Apr. 3, 1926, ch. 102, 44 Stat. 233–234; Act of Feb. 28, 1927, ch. 228, id., at 1261; Act of Sept. 2, 1958, Pub. L. 85–919, 72 Stat. 1770; Federal Courts Improvement Act of 1982, §125, 96 Stat. 37, 28 U. S. C. §1292(d)(3); Tax Reform Act of 1986, §1558, 100 Stat. 2757–2758, 26 U. S. C. §7482(a)(2)(A); Veterans’ Judicial Review Act, 102 Stat. 4120, as amended, 38 U. S. C. §7292(b)(1); Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, 119 Stat. 203, 28 U. S. C. §158(d)(2)(D); Puerto Rico Oversight, Management, and Economic Stability Act, §306, 130 Stat. 582, 48 U. S. C. §2166(e)(6); see also Judiciary Act of 1891, §7, 26 Stat. 828; Act of June 6, 1900, ch. 803, 31 Stat. 660–661; Fed. Rule Civ. Proc. 23(f).
* ↑ The Court’s judgment today pertains to respondent Abraham Bielski. The writ of certiorari as to respondents David Suski et al. is dismissed as improvidently granted.