In a significant ruling, the US Supreme Court denied Coinbase's motion to compel arbitration in a dispute related to its Dogecoin (DOGE) sweepstakes, affirming earlier decisions by the US Court of Appeals for the Ninth Circuit and the Northern District of California. The judge ruled that "a court, not an arbitrator," must decide whether one of Coinbase's agreements supersedes the other, marking a loss for Coinbase, which had sought arbitration.

The case revolves around two agreements: Coinbase's User Agreement, which states that an arbitrator will handle disputes, and the official sweepstake rules, which contain a forum selection clause granting California courts sole jurisdiction over sweepstakes-related controversies. The Supreme Court's decision upholds the earlier rulings, which found that the official sweepstake rules controlled the dispute and it was not eligible for arbitration.

Coinbase's Chief Legal Officer, Paul Grewal, briefly commented on the outcome, acknowledging that "some you win... some you lose" and thanking the court for its consideration. The Supreme Court's ruling, delivered by Justice Ketanji Brown Jackson, emphasized that disputes can be arbitrated when both sides agree to arbitration, but parties may have a secondary disagreement about whether they agreed to arbitration.

Justice Jackson also addressed Coinbase's contention that the Ninth Circuit courts improperly applied California state law in its earlier decisions, stating that the Supreme Court "decline[s] to consider auxiliary questions" on the matter, which are beyond the scope of the question presented. Furthermore, Jackson denied that the decision would "invite chaos" by allowing challenges to delegation causes, stating: "Regardless, where the parties have agreed to two contracts, a court must decide which contract governs."

The broader dispute pertains to a class action lawsuit, in which Coinbase and its sweepstakes partner Marden-Kane are accused of directing users to buy or sell $100 or more of DOGE to enter the sweepstakes while hiding alternative ways to participate in the offer. Plaintiffs also alleged violations under California's False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act.

The Supreme Court's ruling marks a significant milestone in the case, upholding the importance of court jurisdiction in resolving disputes. As the case moves forward, it will be crucial to monitor how the courts navigate the complex issues at play, balancing the need for arbitration with the importance of upholding contractual agreements and protecting consumer rights.