Opposition Brief — Coinbase, Inc., Petitioner v. Abraham Bielski

NO. 22-105

In the

Supreme Court of the United States

__________________________

COINBASE, INC.,

Petitioner,

v.

ABRAHAM BIELSKI,

Respondent.

__________________________

COINBASE, INC.,

Petitioner,

v.

DAVID SUSKI, ET AL.,

Respondents.

__________________________

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Ninth Circuit

BRIEF IN OPPOSITION

OF RESPONDENT ABRAHAM BIELSKI

Sabita J. Soneji

Wesley M. Griffith

TYCKO & ZAVAREEI LLP

1970 Broadway, Suite 1070

Oakland, CA 94612

(510) 254-6808

September 2, 2022

SUPREME COURT PRESS

Hassan A. Zavareei

Counsel of Record

Glenn E. Chappell

Dia Rasinariu

Spencer S. Hughes

TYCKO & ZAVAREEI LLP

1828 L Street NW, Suite 1000

Washington, DC 20036

(202) 973-0900

hzavareei@tzlegal.com

Counsel for Respondent Abraham Bielski

♦

(888) 958-5705

♦

BOSTON, MASSACHUSETTS

i

QUESTION PRESENTED

During the pendency of an appeal, the district court

retains control over aspects of the case not involved in the

appeal. Griggs v. Provident Consumer Discount Co., 459

U.S. 56, 58 (1982) (per curiam). When a party files an

interlocutory appeal of the denial of its motion to compel arbitration, does the district court retain discretion

to conduct proceedings unrelated to the arbitrability

questions presented to the appellate court, or must it

automatically stay all proceedings—involving all aspects

of the case—until that interlocutory appeal is resolved?

ii

TABLE OF CONTENTS

Page

QUESTION PRESENTED .......................................... i

TABLE OF AUTHORITIES ...................................... iii

INTRODUCTION ....................................................... 1

STATEMENT OF THE CASE .................................... 3

REASONS FOR DENYING THE WRIT .................... 8

I.

Coinbase argues only about an alleged

misapplication of a properly stated rule. .......... 9

II. The question presented is not worthy of

certiorari because its practical effects are

minimal. ......................................................... 14

III. The Ninth Circuit’s decision is correct. ......... 17

CONCLUSION.......................................................... 22

iii

TABLE OF AUTHORITIES

Page(s)

TABLE OF AUTHORITIES

CASES

Adler v. Elk Glenn, LLC,

758 F.3d 737 (6th Cir. 2014) ............................. 21

Alaska Elec. Pension Fund v. Flowserve Corp.,

572 F.3d 221 (5th Cir. 2009) ............................... 19

Alice L. v. Dusek,

492 F.3d 563 (5th Cir. 2007) ............................. 18

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) ........................................... 17

Atlantic Marine Constr. Co. v. U.S. Dist. Ct.,

571 U.S. 49 (2013) ............................................... 13

Barnes v. Ahlman,

140 S. Ct. 2620 (2020) ........................................ 11

Bentley v. Vooys,

139 S. Ct. 1600 (2019) ........................................ 13

Blinco v. Green Tree Servicing, LLC,

366 F.3d 1249 (11th Cir. 2004) ......................... 11

Bombardier Corp. v. Nat’l R.R. Passenger Corp.,

No. 02-7125, 2002 WL 31818924

(D.C. Cir. Dec. 12, 2002) .................................... 11

Bradford-Scott Data Corp. v. Physician

Comput. Network, Inc.,

128 F.3d 504 (7th Cir. 1997) ............................. 11

Bristol-Myers Squibb Co. v. Connors,

141 S. Ct. 2796 (2021) ....................................... 13

Bristol-Myers Squibb Co. v. Superior Court of

Cal.,

137 S. Ct. 1773 (2017) ........................................ 13

iv

TABLE OF AUTHORITIES – Continued

Page(s)

Britton v. Co-op Banking Grp.,

916 F.2d 1405 (9th Cir. 1990) ................... passim

Contour Design, Inc. v. Chance Mold Steel Co.,

649 F.3d 31 (1st Cir. 2011) ................................ 19

Day & Zimmermann NPS, Inc. v. Waters,

142 S. Ct. 2777 (2022) ....................................... 13

Ehleiter v. Grapetree Shores, Inc.,

482 F.3d 207 (3d Cir. 2007) .............................. 10

F.T.C. v. Standard Oil Co. of Cal.,

449 U.S. 232 (1980) ........................................... 16

Gingras v. Rosette,

No. 5:15-cv-101, 2016 WL 4442792

(D. Vt. Aug. 22, 2016) ........................................ 15

Griggs v. Provident Consumer Discount Co.,

459 U.S. 56 (1982) ...................................... passim

Hansen v. Rock Holdings, Inc.,

No. 2:19-cv-00179, 2020 WL 3867652

(E.D. Cal. July 9, 2020) ..................................... 15

Henry Schein, Inc. v. Archer & White Sales, Inc.,

Supreme Court No. 17A859

(Mar. 2, 2018) .................................................... 16

In re Platinum Partners

Value Arbitrage Fund L.P.,

No. 18-cv-5176, 2018 WL 3207119

(S.D.N.Y. June 29, 2018) ................................... 17

Janousek v. Doyle,

313 F.2d 916 (8th Cir. 1963) ....................... 19, 20

Levin v. Alms & Assocs., Inc.,

634 F.3d 260 (4th Cir. 2011)................................ 10

v

TABLE OF AUTHORITIES – Continued

Page(s)

McCauley v. Halliburton Energy Servs., Inc.,

413 F.3d 1158 (10th Cir. 2005) ........................... 10

Mohamed v. Uber Techs., Inc.,

115 F. Supp. 3d 1024 (N.D. Cal. 2015) ............. 16

Mohawk Indus., Inc. v. Carpenter,

558 U.S. 100 (2009) ............................................. 21

Morgan v. Sundance, Inc.,

142 S. Ct. 1708 (2022) ................................... 1, 17

Moses H. Cone Mem’l Hosp. v. Mercury Constr.

Corp.,

460 U.S. 1 (1983) ......................................... 10, 18

Motorola Credit Corp. v. Uzan,

388 F.3d 39 (2d Cir. 2004) ........................... 10, 15

Nken v. Holder,

556 U.S. 419 (2009) ...................................... 12, 16

Nurre v. Whitehead,

559 U.S. 1025 (2010) ........................................... 14

Owens v. Okure,

488 U.S. 235 (1989) ........................................... 12

PaineWebber Inc. v. Farnam,

843 F.2d 1050 (7th Cir. 1988) ........................... 16

PHI Inc. v. Rolls Royce Corp.,

577 U.S. 817 (2015) ........................................... 13

Ry. Labor Executives’ Ass’n v. City of Galveston,

898 F.2d 481 (5th Cir. 1990) ............................. 19

Sai v. Transp. Sec. Admin.,

137 S. Ct. 2234 (2017) ........................................ 13

vi

TABLE OF AUTHORITIES – Continued

Page(s)

Schoppe v. Comm’r,

571 U.S. 939 (2013) ............................................ 13

Soc’y for Animal Rights, Inc. v. Schlesinger,

512 F.2d 915 (D.C. Cir. 1975) ........................... 19

United States v. Price,

688 F.2d 204 (3d Cir. 1982) ............................... 19

Vine v. PLS Fin. Servs., Inc.,

226 F. Supp. 3d 708 (W.D. Tex. 2016) .............. 15

Weingarten Realty Inv’rs v. Miller,

661 F.3d 904 (5th Cir. 2011) ........... 10, 15, 18, 19

Wilkerson v. McCarthy,

336 U.S. 53 (1949) .............................................. 11

Zundel v. Holder,

687 F.3d 271 (6th Cir. 2012) ............................. 19

STATUTES

9 U.S.C. § 16 .................................................. 14, 17, 20

11 U.S.C. § 362 .......................................................... 13

15 U.S.C. § 1693 et seq. ........................................... 3, 4

28 U.S.C. § 1292 .................................................. 19, 20

28 U.S.C. § 2071 et seq. ............................................. 21

42 U.S.C. § 1983 ........................................................ 12

Federal Arbitration Act .................................. 1, 17, 20

JUDICIAL RULES

Fed. R. Civ. P. 26 ...................................................... 16

Sup. Ct. R. 10............................................................... 9

vii

TABLE OF AUTHORITIES – Continued

Page(s)

REGULATIONS

12 C.F.R. §§ 1005.1-1005.20 ....................................... 3

OTHER AUTHORITIES

Stephen M. Shapiro et al.,

SUPREME COURT PRACTICE (11th ed. 2019) ...... 11

1

INTRODUCTION

This Court recently held that “a court may not

devise novel rules to favor arbitration over litigation.”

Morgan v. Sundance, Inc., 142 S. Ct. 1708, 1713 (2022).

Coinbase now seeks exactly that, arguing that because

the Federal Arbitration Act (“FAA”) creates the right

to an interlocutory appeal of an order finding a dispute not to be arbitrable, Coinbase should be entitled

to an automatic stay of all district court proceedings

while that interlocutory appeal on arbitrability is

resolved. But the FAA does not provide for such an

automatic stay. As a result, all circuits to have considered the issue apply the general rule that an 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), but not over issues not involved in the appeal.

Courts have disagreed over the particular application

of that properly stated rule to the narrow context of

interlocutory appeals of orders denying motions to compel arbitration. In seeking review of the Ninth Circuit’s

holding that issues of arbitrability are severable from

issues on the merits, and that therefore district court

proceedings are not automatically stayed during the

appeal of an arbitrability ruling, Coinbase is seeking

error correction of the lower court’s application of a

well-settled standard. In so doing, Coinbase overstates both the legal and practical significance of the

disagreement between the circuits about the application of Griggs to this narrow context.

First, not every disagreement among the circuits

necessitates resolution by this Court. The question is

therefore not whether there is some sort of identifiable

difference between the circuits, but rather whether the

2

nature of the variance warrants Supreme Court involvement. Here, the courts agree on the underlying standard

for determining whether district court proceedings

should be automatically stayed while an interlocutory

appeal is pending—every circuit applies the standard

set out in Griggs. And Coinbase does not point to widespread inconsistency in the courts’ application of the

Griggs standard. Instead, Coinbase challenges the Ninth

Circuit’s 32-year-old application of the Griggs standard

to a narrow procedural circumstance. More is required

to justify this Court’s intervention.

Second, there is little distinction in practice between

circuits that have determined that an automatic stay

is not required—that is, the Second, Fifth, and Ninth

Circuits—and those that follow Coinbase’s preferred

approach. Even in circuits that do not automatically

stay district court proceedings, courts frequently grant

discretionary stays pending resolution of interlocutory

appeals of denials of motions to compel arbitration.

Such discretionary stays are particularly likely in cases

that pose “substantial questions” regarding the district

court’s finding that a dispute is not arbitrable. As a

result, the cases where the appellate court is most likely

to find a dispute to be arbitrable are also the cases

most likely to be stayed during the appeal.

Finally, the Ninth Circuit is correct on the merits.

The issues considered by courts on appeal—for example,

the enforceability of the underlying arbitration provision or the application of the arbitration provision to

the dispute—are distinct from the merits of the underlying dispute. There is no risk here of inconsistent judgments from the simultaneous exercise of jurisdiction.

At most, a reversal by the appellate court would move

the dispute to a different forum. It would not alter the

3

underlying application of the law to the dispute.

Accordingly, under Griggs, the issues retained by the

district court are not those “involved in the appeal.”

And circuit courts have found that the district court

retains jurisdiction in cases where the issues on appeal

and before the district court have much more overlap

than they do in this case.

STATEMENT OF THE CASE

1. Coinbase operates an online currency and cryptocurrency exchange platform. Pet.5. Respondent Bielski

alleges that shortly after creating a Coinbase account

in 2021, a scammer fraudulently accessed his account

and transferred currency from it, stealing more than

$30,000. Pet.App.4a. Thereafter, he sought help from

Coinbase, but Coinbase stonewalled. He logged into

Coinbase’s “live chat” feature, called its customer service

“hotline,” and even wrote two letters and sent them to

Coinbase’s office. Id. Coinbase did not respond to his

repeated communications until after he filed the lawsuit,

and even then, the only responses Mr. Bielski received

to his grievances were automated. Id. Coinbase never

took any steps to remedy or even investigate the fraud

perpetrated on Mr. Bielski. Id.

Mr. Bielski alleges that Coinbase’s refusal to

remedy the fraud that occurred through Coinbase’s

platform violated the Electronic Funds Transfer Act,

15 U.S.C. § 1693 et seq. (“EFTA”), and “Regulation E”

of its implementing regulations, 12 C.F.R. §§ 1005.11005.20. Specifically, Coinbase—a “financial institution”

that must comply with the EFTA and its implementing regulations—failed to perform its responsibilities

to remedy unauthorized electronic fund transfers by,

inter alia, failing to conduct a timely and good-faith

4

investigation of fraudulent transfers, failing to timely

credit or provisionally recredit users’ accounts pending

investigation, and failing to provide users with information concerning the status of the unauthorized electronic

transfers from their accounts upon request. See Bielski

D. Ct. Dkt. 22, ¶¶ 3-4.

Mr. Bielski’s experience is far from isolated; Coinbase’s failures to comply with the EFTA and its implementing regulations are systemic and have harmed

many similarly situated persons. Mr. Bielski alleges

that “Coinbase users have repeatedly implored Coinbase to help them rectify the unauthorized transfers

from their accounts, but Coinbase has routinely and

repeatedly effectively ignored such requests,” and has

“largely turned a blind eye to the systemic breaches of

security on its exchange, leaving affected Coinbase

users without recourse, short of litigation, to correct

these issues.” Id. ¶ 3. Mr. Bielski thus sued on behalf

of himself and all similarly situated victims. Id. ¶ 5.

Mr. Bielski filed the operative complaint in November 2021. Id. Coinbase moved to compel arbitration

based on its user agreement. Bielski D. Ct. Dkt. 26. The

user agreement contained both an arbitration clause

and a “delegation clause”—a provision purporting to

consign questions concerning the arbitration agreement

itself to the arbitrator, including whether a particular

dispute between Coinbase and a user is arbitrable. See

Bielski D. Ct. Dkt. 28-1.

With the benefit of full briefing and oral argument,

the district court denied the motion to compel, concluding

that both the arbitration clause and the delegation

clause were unconscionable. Pet.App.3a. The district

court’s comprehensive opinion carefully examined the

provisions of Coinbase’s user agreement, faithfully

5

applying state unconscionability law. See id. at 6a-16a.

A bevy of factors led the court to find the arbitration

and delegation clauses unconscionable. For example,

the delegation clause was a contract of adhesion that (1)

imposed a burdensome and unnecessary pre-arbitration

dispute-resolution procedure on consumers, but not on

Coinbase, and (2) required only users, not Coinbase, to

arbitrate disputes subject to the clause. Id. The district

court further found that the same factors also rendered

the larger arbitration clause unconscionable. The clause

“defined terms such that the various provisions outlining

the informal complaint, formal complaint, and arbitration procedures are nested one inside the other,”

rendering the various portions of the complex arbitration

procedure inseverable. Id. at 16a-18a.

On April 18, 2022, Coinbase filed a notice of appeal

to the Ninth Circuit contesting the district court’s order

denying the motion to compel. Bielski D. Ct. Dkt. 43.

Then, on May 5, 2022, Coinbase filed a motion to stay

the district court proceedings pending appeal. Bielski

D. Ct. Dkt. 48. Mr. Bielski opposed the motion but

agreed to limit motion practice and discovery to individual issues during the appeal. Bielski D. Ct. Dkt. 50,

at 2-3. The district court denied the motion to stay on

June 7, 2022. Pet.App.41a. In denying the motion, the

district court pointed out that the equities weighed

against staying the proceedings because halting the

district court proceedings during the pendency of

the appeal would “significantly prejudice” Mr. Bielski.

Pet.App.43a. Coinbase then sought a stay pending

appeal in the Ninth Circuit, arguing that the Ninth

Circuit’s prior decision that an interlocutory appeal

of a denial of a motion to compel arbitration does not

automatically stay the district court proceedings, Britton

6

v. Co-op Banking Grp., 916 F.2d 1405 (9th Cir. 1990),

was erroneously decided, and suggesting that the

Ninth Circuit reconsider that decision en banc. Bielski

C.A. Dkt. 10, at 1-2. Coinbase also argued that a stay

was warranted under the traditional stay factors. Id.

at 9-21. The Ninth Circuit denied Coinbase’s motion

to stay. Pet.App.1a.

On July 21, 2022, Coinbase elected to forego filing

a motion to dismiss, and chose instead to file an answer

to the operative complaint. Bielski D. Ct. Dkt. 63.

2. In Suski, plaintiffs David Suski, Jaimee Martin,

Jonas Calsbeek and Thomas Maher allege that Coinbase

operated an illegal cryptocurrency lottery by falsely representing to customers that they needed to purchase

$100 worth of cryptocurrency to be entered into a

“sweepstakes” to win more. Pet.App.20a. These plaintiffs

alleged that Coinbase’s sweepstakes, as well as its

solicitations with respect to those sweepstakes, violated California consumer protection laws. Id. at 27a.

Coinbase moved to compel arbitration, asserting that

its user agreement required arbitration of the dispute.

After briefing and oral argument, the court found that

the user agreement was not the controlling contract

for disputes over the “sweepstakes.” Id. at 31a-33a.

Instead, the district court determined Coinbase and

Suski had entered into a second, superseding contract

governing that contest. Id. Not only did that contract

contain no arbitration provision, it also specifically

provided that “THE CALIFORNIA COURTS (STATE

AND FEDERAL) SHALL HAVE SOLE JURISDICTION OF ANY CONTROVERSIES REGARDING

THE PROMOTION AND THE LAWS OF THE STATE

OF CALIFORNIA SHALL GOVERN THE PROMOTION.” Pet.App.25a-26a.

7

On February 9, 2022, Coinbase filed a notice of

appeal, contesting the district court’s denial of its motion

to compel arbitration, Suski D. Ct. Dkt. 58, and moved

to stay the district court proceeding pending appeal,

Suski D. Ct. Dkt. 59. The district court denied the motion

to stay. Pet.App.45a. Coinbase then filed a motion in

the Ninth Circuit, renewing its request that the district

court proceedings be stayed pending appeal and arguing

that should the court decline to issue a discretionary

stay pending appeal, it should sua sponte call for en banc

reconsideration of Britton. Suski C.A. Dkt. 16. The Ninth

Circuit denied the motion. Pet.App.2a.

On May 10, 2022, the Suski plaintiffs filed a third

amended complaint, Suski D. Ct. Dkt. 83, and on June

9, 2022, Coinbase again moved to compel arbitration,

Suski D. Ct. Dkt. 88. It also argued, in the alternative,

that the district court should dismiss the Suski plaintiffs’

claims. Suski D. Ct. Dkt. 88, at 15-20. The district court

partially granted and partially denied the motion to

dismiss and denied the motion to compel on August

31, 2022 after finding it lacked jurisdiction over the

issue of arbitration, because Coinbase’s February 9,

2022 appeal of its previous denial stripped it of

jurisdiction “over the issue of arbitration” while the

appeal was pending. Suski D. Ct. Dkt. 113, at 5.

3. On July 29, 2022, Coinbase filed a joint petition

for writ of certiorari in this Court, seeking review of

the Ninth Circuit’s precedent that an interlocutory

appeal of a denial of a motion to compel arbitration does

not categorically deny the district court of jurisdiction

over the whole case. Along with its joint petition for

certiorari, Coinbase filed a motion asking this Court

to stay the district court proceedings pending resolution of its joint petition, as well as a motion to expedite

8

consideration of its joint petition. The Court denied

both motions.

REASONS FOR DENYING THE WRIT

In arguing for certiorari, Coinbase overstates both

the legal and practical variation between the circuits.

This is not a case where the circuits disagree on the

governing standard for determining when an appeal

of an interlocutory order automatically stays proceedings in the district court. Each circuit agrees that the

operative question is whether the issues remaining

before the district court are “involved in the appeal”

or whether they are severable. The circuits vary only

with respect to their application of this standard to

the narrow context of interlocutory appeals of denials

of motions to compel arbitration.

Nor has the Ninth Circuit’s 32-year-old decision in

Britton had great practical effect. Even in circuits where

district court proceedings are not automatically stayed,

courts frequently grant discretionary stays pending

appeal, especially where there is greater risk of reversal.

Moreover, at the end of the day, what Coinbase ultimately seeks is a pause to all discovery during the

appellate court’s review of a denial to compel arbitration

—discovery that would likely be had in arbitration even

if the denial of the motion to compel arbitration was

reversed. This is hardly the kind of “harm” that would

justify this Court’s intervention.

Finally, the Ninth Circuit’s decision was correct

on the merits.

9

I.

Coinbase argues only about an alleged

misapplication of a properly stated rule.

Coinbase’s petition fixates on the existence of what

Coinbase calls a “split” among the circuits on the issue

presented. But formulaic labels alone—like “circuit

split”—do not dictate whether a case is suitable for

certiorari review. The more important question concerns

the nature of the question presented. Where, as here,

the question presented concerns application of a wellestablished standard to one set of procedural facts with

no larger impact on the law, this Court has made clear

that certiorari review is rarely, if ever, appropriate.

See Sup. Ct. R. 10 (certiorari review is rarely appropriate where the claimed error involves “misapplication

of a properly stated rule of law”). Moreover, Coinbase

cannot show that application of the Griggs standard

is so inconsistent among the circuits or in such disarray that Supreme Court involvement is warranted.

These reasons further counsel against certiorari review.

Here, there is no “split” among the circuits regarding what legal standard should apply—all apply Griggs.

Rather, Coinbase challenges the Ninth Circuit’s application of Griggs to a narrow, specific procedural circumstance—an application that will not have any broader

impact on the application of Griggs in other contexts.

In both Bielski and Suski, Coinbase seeks to challenge

the Ninth Circuit’s 32-year-old holding that a party

who loses a motion to compel arbitration is not entitled

to an automatic stay of all proceedings pending its

appeal of the ruling. See Britton, 916 F.2d at 1412.

That holding is a specific application of this Court’s

precedent in Griggs, which holds that when an appeal

is pending, the district court may not proceed with

“those aspects of the case involved in the appeal.” 459

10

U.S. at 58; see Britton, 916 F.2d at 1411 (discussing

Griggs). The Ninth Circuit held that “[s]ince the issue

of arbitrability was the only substantive issue presented

in this appeal,” the district court could “proceed with

the case on the merits.” Britton, 916 F.2d at 1412.

Every circuit presented with an opportunity to

address the issue has applied Griggs. Quoting and

citing Griggs, the Second Circuit observed that “[t]he

issue, therefore, is whether the trial of a case on the

merits is ‘involved in’ an appeal of an order denying

arbitration.” Motorola Credit Corp. v. Uzan, 388 F.3d

39, 53 (2d Cir. 2004) (cleaned up) (quoting Griggs). On

that question, it concluded that “further district court

proceedings in a case are not ‘involved in’ the appeal

of an order refusing arbitration.” Id. at 54 (quoting

Griggs).

When finally presented with similar facts 21 years

after Britton, the Fifth Circuit explained that the question “turn[ed] on Griggs” because the issue was “whether

the merits of an arbitration claim are an aspect of a

denial of an order to compel arbitration.” Weingarten

Realty Inv’rs v. Miller, 661 F.3d 904, 908 (5th Cir. 2011).

Explaining that this Court has “made it plain” that

the merits of claims are “‘easily severable’ from the

dispute over the arbitrability of those claims,” the Fifth

Circuit concluded that “the merits are not an aspect of

arbitrability.” Id. at 909 (quoting Moses H. Cone Mem’l

Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 21 (1983)).

Every other circuit court that has addressed the

issue applied the same standard, considering whether

arbitrability is a separate “aspect” of the case from the

merits. See Levin v. Alms & Assocs., Inc., 634 F.3d

260, 263-66 (4th Cir. 2011); Ehleiter v. Grapetree Shores,

Inc., 482 F.3d 207, 214-15 (3d Cir. 2007); McCauley

11

v. Halliburton Energy Servs., Inc., 413 F.3d 1158, 116062 (10th Cir. 2005); Blinco v. Green Tree Servicing, LLC,

366 F.3d 1249, 1251-53 (11th Cir. 2004) (per curiam);

Bombardier Corp. v. Nat’l R.R. Passenger Corp., No.

02-7125, 2002 WL 31818924, at *1 (D.C. Cir. Dec. 12,

2002); Bradford-Scott Data Corp. v. Physician Comput.

Network, Inc., 128 F.3d 504, 505-06 (7th Cir. 1997).

The fact that the Second, Fifth, and Ninth Circuits

(correctly) applied the rule in a narrower fashion than

some other appeals courts does not create a certiorariworthy conflict among the circuits. The circuit courts’

decisions are limited to the isolated procedural context

of the denial of a motion to compel arbitration. They

do not evince a drift away from the Griggs standard or

reasoning that would create inconsistent applications

of that standard in any larger context. Coinbase declares

the Ninth Circuit got it “wrong” on Griggs, Pet.3, 18, but

even where the Court disagrees with a lower court’s

application of a previously announced standard, “error

correction is outside the mainstream of the Court’s

functions and not among the compelling reasons that

govern the grant of certiorari,” Barnes v. Ahlman, 140

S. Ct. 2620, 2622 (2020) (Sotomayor, J., dissenting from

the grant of a stay) (cleaned up) (quoting Stephen M.

Shapiro et al., SUPREME COURT PRACTICE § 5.12(c)(3),

p. 5-45 (11th ed. 2019)).

More is required to justify this Court’s intervention.

For example, this Court has granted certiorari to steer

the law in the right direction where a series of decisions

among lower courts had eroded the governing standard

and upended fundamental rights and duties (such as

a plaintiff’s right to present their case to the jury and the

jury’s consequent fact-finding function). See Wilkerson

12

v. McCarthy, 336 U.S. 53, 69 (1949) (Douglas, J., concurring) (lower courts strayed from statutory negligence

standard so badly that the standard and the jury’s

fact-finding function was being steadily eroded). This

Court has also granted certiorari to clear up “conflict,

confusion and uncertainty” on issues of widespread

application even after the Court previously attempted

to clarify the legal standard without success. See Owens

v. Okure, 488 U.S. 235, 240-41 (1989) (internal quotations omitted) (Court granted certiorari in light of

enduring confusion over “the appropriate limitations

period for § 1983 claims” and “the wide array of claims

now embraced by that provision,” even after addressing

the issue once before).

Here, by contrast, there is no widespread “confusion” over how Griggs is to be applied, no pattern of

lower court decisions that threaten the standard articulated in Griggs, and no drift in the law that threatens

important rights or functions. For example, no decision

by any of the circuit courts cited in Coinbase’s petition

threaten or weaken the right to immediately challenge

a district court’s arbitrability ruling without waiting

for a final judgment on the merits, or even the ability

to seek a stay of the case pending appellate review if

the litigant faces irreparable harm. At worst, a party

appealing the denial of a motion to compel arbitration

and who wishes to stay district court proceedings will

be required to satisfy the standard articulated in Nken v.

Holder, 556 U.S. 419 (2009).1 That standard applies to

virtually any person seeking a stay pending appeal in

1 To obtain a stay under Nken, the movant must show (1) a

likelihood of success on the merits, (2) irreparable harm in the

absence of a stay, (3) the balance of equities favors a stay, and (4)

a stay would further the public interest. Id. at 434.

13

any federal court. The Nken standard is manageable,

workable, and widely developed in federal courts across

the country, and there is nothing that alters that calculus when the standard is applied to a party seeking to

compel arbitration.

This Court has denied certiorari in cases presenting

questions like this many times over the years. See, e.g.,

Day & Zimmermann NPS, Inc. v. Waters, 142 S. Ct. 2777

(2022) (denying petition for certiorari seeking review

of diverging applications of this Court’s jurisdictional

rule in Bristol-Myers Squibb Co. v. Superior Court of

Cal., 137 S. Ct. 1773 (2017)); Bentley v. Vooys, 139 S. Ct.

1600 (2019) (denying certiorari petition seeking review

of territorial supreme court’s application of this Court’s

Privileges and Immunities Clause precedent, which

petitioner asserted was at odds with the application

by other state and territorial courts of last resort); Sai

v. Transp. Sec. Admin., 137 S. Ct. 2234 (2017) (denying

certiorari petition asking court to resolve circuit split

with respect to whether the collateral order doctrine

permits interlocutory appeal of orders denying the

appointment of counsel in civil rights litigation);

Bristol-Myers Squibb Co. v. Connors, 141 S. Ct. 2796

(2021) (denying certiorari petition in which petitioner

challenged the Ninth Circuit’s application of this

Court’s Younger abstention precedent, which petitioner

asserted was at odds with many other circuits’ application); PHI Inc. v. Rolls Royce Corp., 577 U.S. 817 (2015)

(denying certiorari petition seeking review of how this

Court’s holding in Atlantic Marine Constr. Co. v. U.S.

Dist. Ct., 571 U.S. 49 (2013), should be applied in one

specific context); Schoppe v. Comm’r, 571 U.S. 939 (2013)

(denying review of certiorari petition in case involving

14

circuit split over the application of automatic stay provision of 11 U.S.C. § 362(a) to appeals from the United

States Tax Court). It should likewise deny Coinbase’s

petition here.

II. The question presented is not worthy of

certiorari because its practical effects are

minimal.

Coinbase’s petition should also be denied because

the question presented on which it asks this Court to

intervene has minimal real-world effects, making it

unworthy of review. See Nurre v. Whitehead, 559 U.S.

1025 (2010) (Alito, J., dissenting from denial of certiorari)

(a case’s “important practical implications” contribute

to certiorari worthiness). First, the issue affects an

extraordinarily small subset of litigants. Only those

who are (1) defendants, (2) in cases within the Second,

Fifth, or Ninth Circuits, (3) who moved to compel arbitration, (4) were denied, (5) appealed that denial under

9 U.S.C. § 16(a), (6) actually moved for a stay of district court proceedings pending appeal, and (7) were

again denied (because they could not show they would

succeed on the merits or would be irreparably harmed)

are affected. Very few parties satisfy all seven criteria.

Second, the handful of defendants within that subset

are not meaningfully injured. In essence, the “harm”

that these parties face is participation in discovery.

In Coinbase’s case, the harm is the mere potential of

participating in discovery. But participation in discovery

is not a “harm,” even if Coinbase may spend money to

issue and respond to discovery requests. These effects

are not compelling or important, and their insignificance

makes the issue unworthy of this Court’s review.

First, only the small group of parties that meet all

seven criteria is affected by this issue at all. Litigants

15

in the Second, Fifth, and Ninth Circuits who receive a

discretionary stay are treated the same as all those in

automatic-stay circuits.2 So, the only group affected

by the issue are those who do not meet the criteria for

a discretionary stay, i.e., those who are not likely to

succeed on the merits or are not irreparably harmed,

or do not bother to seek a stay at all. The small number of affected parties is likely a reason why the Ninth

Circuit’s decision in Britton—and the smattering of

related circuit court decisions in the 32 years since—

has not created an unworkable web of clashing rules,

as Coinbase argues. On the contrary, district courts in

the Ninth Circuit have ably managed litigation proceedings during the pendency of these interlocutory

appeals since Britton was issued in 1990, as have

those in the Second Circuit since Motorola Credit

Corp. in 2004, and in the Fifth Circuit since Weingarten

in 2011. And, if the factual circumstances later change

to warrant a stay, district courts retain the discretion

to issue one.

Further, the “harm” to this small group of affected

parties is de minimis (if it exists at all). By the very

nature of the relevant factors, the parties denied a discretionary stay are those who are least deserving of one

—often because they are unable to demonstrate a

likelihood of success on the merits and because they

will not suffer irreparable harm. For example, there is

no realistic chance that Coinbase will be taken to trial

2 District courts within these circuits often grant motions for discretionary stays in this context. See, e.g., Hansen v. Rock Holdings,

Inc., No. 2:19-cv-00179, 2020 WL 3867652 at *3–4 (E.D. Cal. July

9, 2020); Gingras v. Rosette, No. 5:15-cv-101, 2016 WL 4442792,

at *6–7 (D. Vt. Aug. 22, 2016); Vine v. PLS Fin. Servs., Inc., 226

F. Supp. 3d 708, 718–19 (W.D. Tex. 2016).

16

while its appeals are pending (or even to summary

judgment briefing), and the same is often true for other

parties who fail the Nken discretionary stay test. See,

e.g., Mohamed v. Uber Techs., Inc., 115 F. Supp. 3d 1024,

1033-35 (N.D. Cal. 2015) (partially denying motion to

stay, with respect to discovery, when case was “far from

trial”); compare id. with Henry Schein, Inc. v. Archer

& White Sales, Inc., Supreme Court No. 17A859 (Mar. 2,

2018) (granting application for stay three months

before trial date).

The parties that are denied stays—like Coinbase—

essentially seek a broad rule pausing discovery for the

months that their interlocutory appeals are pending.

But the cases in which discretionary stays are denied

are often so premature that discovery has not even

begun. Here, in Bielski, the parties have not exchanged

initial discovery disclosures, and the district court has

not entered a case management schedule. See Fed. R.

Civ. P. 26(a)(1), (f)(3). When discovery commences in

the future, Bielski has agreed to seek only individual

(not class) discovery during the pendency of Coinbase’s

appeal of its motion to compel arbitration. Bielski D.

Ct. Dkt. 50 at 2-3. In Suski, the district court only

recently partially granted and partially denied

Coinbase’s motion to dismiss on August 31, 2022.

Even when discovery eventually commences,

parties in Coinbase’s position suffer minimal harms

(if any) through participation in discovery. In the

discretionary stay context, it is black-letter law that

litigation expenses, even those with “substantial and

unrecoupable cost,” “do[] not constitute irreparable

injury.” F.T.C. v. Standard Oil Co. of Cal., 449 U.S.

232, 244 (1980) (internal quotation marks omitted);

see also PaineWebber Inc. v. Farnam, 843 F.2d 1050,

17

1051 (7th Cir. 1988) (“ordinary incidents” of “litigating

(or arbitrating) a case” cannot constitute irreparable

injury).3 Participating in discovery, especially when

some of that discovery will be useful whether or not

the case ends up in arbitration, is not a “harm” sufficient

to justify the Court’s intervention. Because the practical

effect of the issue is de minimis, the Court should deny

the petition.

III. The Ninth Circuit’s decision is correct.

Having failed to persuade the district court and

the Ninth Circuit to issue a discretionary stay pending

appeal, Coinbase asks this Court to adopt a categorical

rule—applicable only to cases involving arbitration—

that would mandate a stay of all district court proceedings any time a party files a non-frivolous interlocutory

appeal pursuant to 9 U.S.C. § 16(a). Because neither

the FAA nor this Court’s prior precedents requires such

a rule, Coinbase is unlikely to prevail on the merits if

this Court exercises its review.

The FAA’s “liberal federal policy favoring arbitration,” AT&T Mobility LLC v. Concepcion, 563 U.S.

333, 339 (2011) (internal quotation marks omitted),

only ensures that courts enforce arbitration agreements

in the same manner as other contracts, Morgan, 142

S. Ct. at 1713. It does not, however, “authorize federal

courts to invent special, arbitration-preferring procedural rules.” Id. Accordingly, the general rule that an

3 This principle has been specifically recognized in the discovery

context, too. A “requirement to produce documents” is not generally “the type of injury that is irreparable.” In re Platinum

Partners Value Arbitrage Fund L.P., No. 18-cv-5176, 2018 WL

3207119, at *6 (S.D.N.Y. June 29, 2018).

18

interlocutory appeal divests the district court of jurisdiction only “over those aspects of the case involved in

the appeal,” Griggs, 459 U.S. at 58, and that district

courts remain free to adjudicate matters that are not

involved in the interlocutory appeal, see, e.g., Alice L.

v. Dusek, 492 F.3d 563 (5th Cir. 2007), applies equally

to cases involving arbitration.

“An issue is generally an aspect of the case on

appeal if it results in the district court’s deciding an

issue that the appellate court is deciding at the same

time.” Weingarten, 661 F.3d at 909. As this Court

explained in Moses H. Cone, considerations of arbitrability are “easily severable” from the underlying merits

of a dispute. 460 U.S. at 21. Here, for example, determining arbitrability requires ruling on the enforceability of the underlying arbitration provisions, while

evaluating the merits requires only a consideration of

Coinbase’s duties under the ETFA and its implementing

regulations. There is no risk that the simultaneous

exercise of jurisdiction by the district court and the Ninth

Circuit would lead to concurrent analysis of “the same

legal question” or inconsistent judgments. Weingarten,

661 F.3d at 909. If the Ninth Circuit reverses the district

court’s decision on arbitrability, the case would simply

move to a different forum and any of the individual

discovery completed while the Ninth Circuit considers

Coinbase’s interlocutory appeal is equally relevant to

the arbitration.

Although there is some small potential for litigation inefficiencies, this result is hardly comparable

to the potential for inconsistent judgments contemplated

by Griggs. Indeed, circuit courts have held that Griggs

does not mandate an automatic halt to district court

proceedings pending appeal in cases where the line

19

separating the aspects of the case on appeal and those

in the trial court was blurrier than the line between

arbitrability and the merits. See Alaska Elec. Pension

Fund v. Flowserve Corp., 572 F.3d 221, 233 (5th Cir.

2009) (applying Griggs and concluding “a district court’s

findings in connection with a holding on class certification do not resolve loss-causation issues on the merits” at

summary judgment, “even when . . . the two issues are

practically identical”); Janousek v. Doyle, 313 F.2d 916,

920 (8th Cir. 1963) (interlocutory appeal of ruling on

preliminary injunction did not divest district court of

jurisdiction to proceed on the merits); Zundel v. Holder,

687 F.3d 271, 282 (6th Cir. 2012) (same); Contour

Design, Inc. v. Chance Mold Steel Co., 649 F.3d 31, 34

(1st Cir. 2011) (same); Ry. Labor Execs.’ Ass’n v. City of

Galveston, 898 F.2d 481, 481 (5th Cir. 1990) (same);

United States v. Price, 688 F.2d 204, 215 (3d Cir. 1982)

(same); see also Soc’y for Animal Rights, Inc. v. Schlesinger, 512 F.2d 915, 918 (D.C. Cir. 1975) (“We assume

that the case will proceed forward expeditiously in the

district court despite the pendency of the § 1292(a)

appeal in this court.”).

Coinbase’s comparison to cases involving issues

such as double jeopardy, sovereign immunity, or qualified immunity is also inapposite. In those examples, a

grant of immunity protects the defendant from being

brought before a tribunal at all. By contrast, “[a] determination on the arbitrability of a claim has an impact

on what arbiter—judge or arbitrator—will decide the

merits, but that determination does not itself decide

the merits.” Weingarten, 661 F.3d at 909. Moreover, as

the Fifth Circuit explained, “[t]here is no public policy

favoring arbitration agreements that is as powerful as

that public interest in freeing officials from the fear of

20

unwarranted litigation.” Id. at 910. On the other hand,

an automatic stay means that, even where a district

court thinks an appeal is unlikely to succeed and that

denying a stay would not irreparably harm the defendant, the defendant can still delay,

Coinbase argues that the FAA itself militates towards finding that an automatic stay is required

because Congress “would not have granted parties the

right to an immediate interlocutory appeal of refusals

to compel arbitration if Congress had contemplated

that litigation could proceed while the appeal was

pending.” Pet.18. But nothing in the text of the FAA

or its legislative history suggests that Congress intended

this result. As with preliminary injunctions and other

rulings a party may appeal before final judgment, that

Congress allowed litigants to pursue an interlocutory

appeal says nothing about whether that appeal strips

the district court of jurisdiction. Moreover, given that

Congress chose to specifically address interlocutory

appeals in the FAA, if Congress had wanted to change

the default rule regarding such appeals, it likely

would have said so.

Nor does the fact that 9 U.S.C. § 16 provide a

mandatory right to appeal, rather than a discretionary

right to appeal, alter the analysis. For example, litigants

also have a mandatory right to appeal grants or denials

of injunctions, see 28 U.S.C. § 1292(a), but district courts

routinely retain jurisdiction during the pendency of

interlocutory appeals of rulings on preliminary injunctions. See, e.g., Janousek, 313 F.2d at 920. Regardless

of whether the appeal is permissive or as of right, the

question is whether the issue on appeal is severable

from the merits. If it is, then the district court retains

jurisdiction.

21

Finally, even if the Court agrees that there is a

practical benefit to imposing an automatic stay in this

context, it should implement such a change in procedure through rulemaking pursuant to the Rules

Enabling Act, 28 U.S.C. § 2071 et seq., not by granting

certiorari in this matter. As this Court has noted, “the

rulemaking process has important virtues. It draws

on the collective experience of bench and bar, and it

facilitates the adoption of measured, practical solutions.” Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100,

114 (2009) (citation omitted); see also Adler v. Elk Glenn,

LLC, 758 F.3d 737, 741 (6th Cir. 2014) (Sutton, J.,

concurring) (“[R]ulemaking [is] a more reliable vehicle

than appellate decisionmaking for assessing the pros

and cons.”). Until the rulemakers act, district courts

should retain discretion to issue or deny a stay pending

an interlocutory appeal.

22

CONCLUSION

As there are no compelling reasons for this Court’s

review, Coinbase’s petition for a writ of certiorari should

be denied.

Respectfully submitted,

Hassan A. Zavareei

Counsel of Record

Glenn E. Chappell

Dia Rasinariu

Spencer S. Hughes

TYCKO & ZAVAREEI LLP

1828 L Street NW, Suite 1000

Washington, DC 20036

(202) 973-0900

hzavareei@tzlegal.com

gchappell@tzlegal.com

drasinariu@tzlegal.com

shughes@tzlegal.com

Sabita J. Soneji

Wesley M. Griffith

TYCKO & ZAVAREEI LLP

1970 Broadway, Suite 1070

Oakland, CA 94612

(510) 254-6808

ssoneji@tzlegal.com

wgriffith@tzlegal.com

Counsel for Respondent Abraham Bielski

September 2, 2022