Coinbase, Inc., et al. v. Darren Kramer, et al.

Under the Federal Arbitration Act (FAA), arbitration agreements are “valid, irrevocable, and enforceable.” 9 U.S.C. § 2. The FAA’s “saving clause” contemplates exceptions only “upon such grounds as exist at law or in equity for the revocation of any contract.” Id. But the FAA preempts even such grounds if they interfere with “fundamental attribute[s] of arbitration.” Epic Sys. Corp. v. Lewis, 584 U.S. 497, 508 (2018). In McGill v. Citibank, N.A., the California Supreme Court ruled that an arbitration provision is unenforceable if it precludes a plaintiff from seeking “public injunctive relief.” 393 P.3d 85, 94 (Cal. 2017). California courts have since held that a plaintiff can invoke the McGill rule and invalidate an arbitration agreement by merely requesting an injunction on behalf of similarly situated consumers under any of California’s several consumer-protection statutes. The Ninth Circuit disagrees and has held that this approach is preempted by the FAA. The question presented is: Whether, or to what extent, the FAA preempts a state-law rule allowing a plaintiff to evade arbitration by pleading a request for “public injunctive relief,” even if the relief sought would benefit only consumers of a particular product or service. (i)