I should have renamed today’s edition “ADR Highlight,” because there is only one reported case worth mentioning.
Public Relief and Class Actions
In Woody v. Coinbase Global, Inc., 2023 U.S. Dist. LEXIS 18624 (N.D. Cal. October 17, 2023)(Donato, J.), plaintiffs brought a putative class action alleging that Coinbase breached its contract in connection with the on-line transfer of “newly minted digital asset[s].” Coinbase’s User Agreement contained an arbitration clause covering “any dispute.” Plaintiff sought injunctive relief “barring ‘the unlawful practices alleged’ in the complaint. . . .” Under California law, which applies here, “an arbitration agreement may not bar an award of public injunctive relief.” Woody argued that, because he asserted claims on behalf of not merely one plaintiff, but of an entire class, the court may not compel arbitration of his request for an injunction. Judge Donato disagrees. He distinguishes people who are “similarly situated to the plaintiff[s]” from “the general public as a more diffuse whole.” (Brackets in the original). Since the requested injunctive relief, like plaintiff’s claim for class-wide damages, “would also affect only Coinbase customers,” he opines, “they are not requests for public injunctive relief.” The court compels arbitration on an individual basis.
In response to the now-common contractual prohibition against class arbitration, the claimants’ bar has begun to file sometimes thousands of arbitrations at the same time addressing the same issue against the same respondent. Neil B. Currie, a Vice President of the American Arbitration Association addresses this phenomenon in “How Has Mass Arbitration Evolved and Where Is It Going?,” Today’s General Counsel, October 2023, p. 14, available on-line at AAA_TGC_Interview_with_Cover_OCT_2023.pdf (adr.org) or https://www.adr.org/sites/default/files/document_repository/AAA_TGC_Interview_with_Cover_OCT_2023.pdf?utm_source=linkedin&utm_medium=post&utm_campaign=Evolution+Of+Mass+Arbitration+And+Where+Its+Going .
There will be no “Highlights” until next week. Have a good weekend.
David Reif, FCIArb