USA Trends and Developments Contributed by: Matthew H. Kirtland, Timothy Tyler, Katie Connolly and Taylor LeMay, Norton Rose Fulbright
which dispute resolution provision controls when there are multiple contracts with differing dispute resolution provisions at issue. In Coinbase II , the plain - tiffs had agreed to a contract with a delegation clause when they signed up for Coinbase’s cryptocurrency exchange platform but later participated in a sweep - stakes, which had a different contract without an arbi - tration provision. The lower courts denied a motion to compel arbitration on the basis that the sweepstakes contract controlled. The Supreme Court ruled that, while the issue of arbitrability can be delegated to an arbitrator, where there are multiple (subsequent) con - tracts with different dispute resolution provisions, then it falls to the courts to decide arbitrability. Compelling arbitration The Supreme Court also decided several cases that clarified when and how courts might compel arbitra - tion. GE Energy Power Conversion Fr. SAS, Corp. v Outo- kumpu Stainless USA, LLC (2020), is largely a New York Convention case concerning non-signatories to an arbitration agreement. There, the Supreme Court unanimously upheld the use of state law equitable estoppel doctrines to compel non-signatories to arbi - trate. The reasoning proceeded as follows: the FAA’s chapter governing New York Convention agreements and awards (Chapter 2) is silent on enforcing arbi - tration agreements against non-signatories based on domestic US doctrines, so Chapter 2 does not con - flict with or pre-empt state law principles on binding non-signatories. Justice Clarence Thomas wrote, “[T] he Convention requires courts to rely on domestic law to fill the gaps; it does not set out a comprehensive regime that displaces domestic law.” In this closely watched case, Outokumpu’s predecessor had entered into a series of contracts with FL Industries, each of which contained an arbitration agreement requiring arbitration in Germany subject to German law. FL Industries subcontracted with GE Energy as a parts supplier. When those parts allegedly failed, Outo - kumpu filed suit in court. GE Energy, which was not a signatory to the contracts with the arbitration agree - ments, nonetheless moved to compel arbitration, which was granted and upheld by the Supreme Court.
In Badgerow v Walters (2022), the Supreme Court clarified certain issues of federal court jurisdiction in a US domestic context. Badgerow decided that the “look-through” rule – applicable to deciding jurisdic - tion over motions to compel arbitration under FAA Section 4 – does not apply in actions to confirm or vacate an award, under FAA Sections 9 and 10. Pre - viously, the Supreme Court had held that a federal court should determine its jurisdiction over a motion to compel arbitration by looking through the face of the motion to compel arbitration and to the underly - ing controversy, ie, “looking-through” the motion. The Court held that this rule does not apply to motions to confirm or vacate. In Badgerow , two citizens of the same state filed cross-applications for confirmation/ vacatur that raised no federal issues, meaning there was no basis for federal jurisdiction. Even so, the court of appeals had affirmed a finding of federal jurisdiction based on the application of federal law in the underly - ing dispute decided in the arbitration. The Supreme Court reversed and remanded on the basis that there was no basis for any “look-through” to establish juris - diction in such cases. Finally, in 2023, the Supreme Court held in Coinbase, Inc. v Bielski that an interlocutory appeal of a denial of a motion to compel arbitration under the FAA automat - ically stays the entire underlying litigation. Then, a year later in 2024, the Supreme Court held unanimously in Smith v Spizzirri that, when a dispute is compelled to arbitration, the FAA mandates a stay of litigation during arbitration (if requested) and does not permit courts to dismiss the case. In part, the Court reasoned that allowing dismissals upon granting a motion to compel would effectively create an end-run around the FAA, which authorises an immediate interlocutory appeal from an order denying arbitration but not from an order compelling arbitration, by turning an order compelling arbitration into a final appealable order. Discovery In 2022, the Supreme Court effectively eliminated the use of 28 USC Section 1782 to obtain discovery in the US for use in most commercial, private international arbitrations. The previous split of authority among the US courts of appeals had left a patchwork map of red and green zones for applications by parties to inter -
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