Abraham Bielski v. Coinbase, Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

ABRAHAM BIELSKI, on behalf of No. 22-15566
himself and all others similarly
situated, D.C. No. 3:21-cv-
07478-WHA
Plaintiff-Appellee,

v. OPINION

COINBASE, INC.,

Defendant-Appellant.

Appeal from the United States District Court
for the Northern District of California
William Alsup, District Judge, Presiding

Argued February 14, 2023
Submitted June 23, 2023
San Francisco, California

Filed December 5, 2023

Before: Eric D. Miller, Gabriel P. Sanchez, and Salvador
Mendoza, Jr., Circuit Judges.

Opinion by Judge Mendoza;
Partial Concurrence by Judge Miller
2 BIELSKI V. COINBASE, INC.

SUMMARY *

Arbitration / Delegation

The panel reversed the district court’s order denying
Coinbase, Inc.’s motion to compel arbitration of claims
brought by Abraham Bielski, alleging that Coinbase, an
online cryptocurrency exchange, failed to investigate the
unauthorized transfer of funds from Bielski’s Coinbase
account.
Coinbase’s User Agreement included an arbitration
agreement with a delegation provision, which delegated to
the arbitrator any dispute arising out of the
agreement. Bielski alleged that the delegation provision and
the arbitration agreement were unenforceable.
As a threshold issue, the panel held that, in order to
challenge a delegation provision to ensure that a court can
review its challenge, the party resisting arbitration must
specifically reference the delegation provision and make
arguments challenging it; a court need not first evaluate the
substance of the challenge, as required by the Sixth and
Eleventh Circuits. Agreeing with the Third and Fourth
Circuits, the panel held that a party may use the same
arguments to challenge both the delegation provision and the
arbitration agreement, so long as the party articulates why
the argument invalidates each specific provision. Because
Bielski specifically challenged the delegation provision, the
district court correctly considered that challenge.

*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
 BIELSKI V. COINBASE, INC. 3

Next, the panel held that in evaluating an
unconscionability challenge to a delegation provision under
California law, a court must be able to interpret that
provision in the context of the arbitration agreement as a
whole, which may require examining the underlying
agreement as well. The panel determined that the district
court correctly considered the whole context surrounding the
delegation provision in its analysis of the provision’s
validity.
Finally, the panel held that the delegation provision in
context was not unconscionable. The delegation’s
provision’s low levels of procedural and substantive
unconscionability failed to tip the scales to render the
provision unconscionable and therefore
unenforceable. Accordingly, the panel held that the district
court erred in refusing to enforce the delegation provision,
and reversed the district court’s denial of Coinbase’s motion
to compel arbitration.
Concurring in part and concurring in the judgment,
Judge Miller joined the majority opinion with the exception
of part III(A). Although he agreed with much of that part,
he did not join it because he did not agree with the majority’s
description of the law of the Sixth and Eleventh Circuits
concerning what is required to challenge a delegation
provision.
4 BIELSKI V. COINBASE, INC.

COUNSEL

Jessica L. Ellsworth (argued), Neal K. Katyal, William E.
Havemann, and Nathaniel A.G. Zelinsky, Hogan Lovells US
LLP, Washington, D.C. for Defendant-Appellant.
Glenn E. Chappell (argued), Hassan A. Zavareei, David
Jochnowitz, and Spencer S. Hughes, Tycko & Zavareei LLP,
Washington, D.C.; Sabita J. Soneji, Wesley M. Griffith, and
Spencer S. Hughes, Tycko & Zavareei LLP, Oakland,
California; Matthew D. Carlson, Law Office of Matthew D.
Carlson, Orchard Park, New York; for Plaintiff-Appellee.
Jennifer B. Dickey and Jonathan D. Urick, U.S. Chamber
Litigation Center, Washington, D.C.; Mark A. Perry and
Joshua Halpern, Weil Gotshal & Manges LLP, Washington,
D.C.; for Amicus Curiae Chamber of Commerce of the
United States of America.
Richard H. Frankel, Drexel University, Earle Mack School
of Law, Philadelphia, Pennsylvania; Jeffrey R. White,
American Association for Justice, Washington, D.C.; for
Amici Curiae American Association for Justice, National
Consumer Law Center, and Center for Responsible Lending.
 BIELSKI V. COINBASE, INC. 5

OPINION

MENDOZA, Circuit Judge:

Defendant-Appellant Coinbase, an online
cryptocurrency exchange, appeals the district court’s denial
of its motion to compel arbitration of claims brought by
Plaintiff-Appellee Abraham Bielski. Coinbase challenges
the district court’s order at every step. Coinbase argues the
district court erred in three ways: (1) it erroneously
considered Mr. Bielski’s challenge to the delegation
provision because he failed to specifically challenge it; (2) it
impermissibly looked beyond the delegation provision in
evaluating the provision’s enforceability; and (3) it
incorrectly determined that the delegation provision and the
arbitration agreement were unconscionable and inseverable.
We decide as a matter of first impression what a party
must do to specifically challenge a delegation provision and
what a court may consider when evaluating this challenge.
Though Mr. Bielski specifically challenged the delegation
provision and the district court properly “looked through”
the provision in its unconscionability analysis, we ultimately
hold that the delegation provision is enforceable and reverse
the district court’s order.
I.
What is cryptocurrency? Cryptocurrency—like Bitcoin,
Ethereum, and dogecoin—is not issued by a government or
a central bank; it is created by developers and traded over the
internet. Put somewhat simply, cryptocurrency (“crypto”) is
the general term for encrypted, decentralized digital money
based on blockchain technology. References to crypto and
crypto-related companies are everywhere: the Los Angeles
6 BIELSKI V. COINBASE, INC.

Lakers’ stadium is named “Crypto.com Arena;” Saturday
Night Live has spoofed Bitcoin commercials; and the 2022
Super Bowl was dubbed the “Crypto Bowl” for the sheer
number of crypto-related ads, including Coinbase’s, which
prompted enough traffic to its app to temporarily crash it.
Because many traditional investment firms and banks do
not sell crypto, many people looking to buy and sell it go
through crypto exchanges. Coinbase is one of these
exchanges, advertising itself as the easiest place to buy and
sell crypto. Coinbase provides users with a digital wallet,
which they fund with personal bank accounts. Users can
both store currency and transfer it in and out of their digital
wallet. In 2021, Coinbase had 68 million users. Mr. Bielski
was one of them. Wanting to try his hand at trading crypto,
he opened a Coinbase account, and, like other users,
connected his personal bank account to his digital wallet.
A.
Coinbase, like most companies doing business online,
requires users like Mr. Bielski to accept its User Agreement
before opening an account. Coinbase’s User Agreement
outlines three progressive steps a user must take to resolve
any dispute with Coinbase. A user must: (1) contact
Coinbase’s customer support to resolve the dispute amicably
(“informal complaint process”); (2) fill out Coinbase’s
complaint form and wait for Coinbase’s response (“formal
complaint process”); and (3) arbitrate the dispute
(“arbitration agreement”). The arbitration agreement
delegates to an arbitrator any dispute arising out of the
agreement, “including the enforceability, revocability,
 BIELSKI V. COINBASE, INC. 7

scope, or validity of the [a]rbitration [a]greement.” (“the
delegation provision”). That delegation provision provides:

This Arbitration Agreement includes,
without limitation, disputes arising out of or
related to the interpretation or application of
the Arbitration Agreement, including the
enforceability, revocability, scope, or validity
of the Arbitration Agreement or any portion
of the Arbitration Agreement. All such
matters shall be decided by an arbitrator and
not by a court or judge.

B.
Mr. Bielski alleges that, soon after opening his Coinbase
account, a scammer transferred more than $31,000 out of his
digital wallet. Mr. Bielski’s tough luck did not end there.
When he turned to Coinbase for help recovering his funds,
he faced a bot-filled customer service nightmare. Mr.
Bielski “live chatted” with a Coinbase representative, which
he soon realized was a “bot” offering canned responses.
Unfortunately, the bot did not find his lost $31,000. He then
repeatedly called Coinbase’s hotline for compromised
accounts. He once again was unable to speak with a human.
Fed up with automated responses, Mr. Bielski wrote two
letters to Coinbase, begging for help recovering his lost
funds. Coinbase did not help.
Mr. Bielski sued Coinbase under the Electronic Funds
Transfer Act, 15 U.S.C. §§ 1693–1693r, and Regulation E,
12 C.F.R. §§ 1005.1–1005.20, for failing to investigate the
unauthorized transfer from his account. Coinbase moved to
compel arbitration, arguing that under its User Agreement,
Mr. Bielski’s claims and any questions of arbitrability
8 BIELSKI V. COINBASE, INC.

belong with an arbitrator, not the court. Mr. Bielski opposed
Coinbase’s motion. The district court denied Coinbase’s
motion to compel arbitration, finding both the delegation
provision and the arbitration agreement unconscionable and
inseverable. Coinbase timely appealed. 1
II.
We have jurisdiction under 9 U.S.C. § 16(a)(1). We
“review [a] denial of a motion to compel arbitration de novo”
and “findings of fact underlying the district court’s decision
for clear error.” Lim v. TForce Logistics, LLC, 8 F.4th 992,
999 (9th Cir. 2021).
III.
Mr. Bielski does not dispute that Coinbase’s arbitration
agreement contains a delegation provision. Instead, he
argues that both the delegation provision and the arbitration
agreement are unenforceable. Before turning to the
enforceability of the delegation provision, we must decide
two threshold issues not yet resolved by our court. First, we
address what a party must do to specifically challenge a
delegation provision to ensure that a court can review its
challenge. Then, we turn to what a court may consider when
evaluating the enforceability of a delegation provision.
Finally, we address the enforceability of Coinbase’s
delegation provision.

1
We heard argument in this case on February 14, 2023, and deferred
submission pending the Supreme Court’s decision in Coinbase v. Bielski,
No. 22-105. The Supreme Court published its decision on June 23, 2023,
and we submitted the case that day.
 BIELSKI V. COINBASE, INC. 9

A.
When is enough, enough? Coinbase argues we must
reverse the district court and enforce the delegation
provision because Mr. Bielski did not do enough to
specifically challenge the delegation provision. It claims
that Mr. Bielski’s arguments exclusively address the
arbitration agreement, and any arguments about the
delegation provision “just repeat[] thinly disguised versions
of the very same arguments he levels against the arbitration
agreement more broadly.” Mr. Bielski argues he did enough
to challenge the delegation provision by lodging specific
arguments against it in his opposition motion. He further
argues that Rent-A-Center, West, Inc. v. Jackson, 561 U.S.
63, 74 (2010), permits relying on similar arguments when
specifically challenging the delegation provision and the
arbitration agreement as a whole. We agree with Mr.
Bielski. Because he specifically challenged the delegation
provision, Mr. Bielski’s enforceability challenge belongs
with the court, not an arbitrator.
Some background law about arbitration agreements and
delegation provisions helps us understand the dispute
between Mr. Bielski and Coinbase. Under Section 2 of the
Federal Arbitration Act (“FAA”), an arbitration agreement
“shall be valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any
contract.” 9 U.S.C. § 2. Because an arbitration agreement
is a contract like any other, it may “be invalidated by
generally applicable contract defenses, such as fraud, duress,
or unconscionability.” Lim, 8 F.4th at 999 (quoting Poublon
v. C.H. Robinson Co., 846 F.3d 1251, 1259 (9th Cir. 2017)).
The FAA limits federal court review of arbitration
agreements to two gateway arbitrability issues: “(1) whether
10 BIELSKI V. COINBASE, INC.

a valid agreement to arbitrate exists, and if it does,
(2) whether the agreement encompasses the dispute at
issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207
F.3d 1126, 1130 (9th Cir. 2000). Delegation provisions
further limit federal court review by assigning these gateway
questions to an arbitrator. Lim, 8 F.4th at 999–1000.
So what issues are left for a court to consider in deciding
a motion to compel arbitration where the arbitration
agreement has a delegation provision? Under Rent-A-
Center, if a party specifically challenges the delegation
provision under Section 2 of the FAA, “the federal court
must consider the challenge before ordering compliance”
with it. 561 U.S. at 71. In Rent-A-Center, the Supreme
Court considered whether a plaintiff’s opposition to his
employer’s motion to compel arbitration sufficiently
challenged the arbitration agreement’s delegation provision,
requiring federal court review. There, the plaintiff only
argued that “the arbitration agreement as a whole [was]
substantively unconscionable,” and “did [not] even mention
the delegation provision” in his opposition motion. Id. at
72–73 (second emphasis added). This was fatal to the
plaintiff’s claim. But the Court suggested a way forward: “It
may be that had [the plaintiff] challenged the delegation
provision by arguing that these common procedures as
applied to the delegation provision rendered that provision
unconscionable, the challenge should have been considered
by the court.” Id. at 74. Rent-A-Center makes clear that a
party must at least mention a delegation provision to
challenge it. But the Supreme Court has not provided parties
with more specific instructions on what it takes to
sufficiently challenge a delegation provision to ensure
federal court review.
 BIELSKI V. COINBASE, INC. 11

To provide some guidance, we distill Rent-A-Center into
two principles. First, a party resisting arbitration must
mention that it is challenging the delegation provision and
make specific arguments attacking the provision in its
opposition to a motion to compel arbitration. Second, a party
may challenge the delegation provision and the arbitration
agreement for the same reasons, so long as the party
specifies why each reason renders the specific provision
unenforceable. There are many reasons why a party may be
required to use nearly identical challenges to the delegation
provision and the arbitration agreement as a whole. Notably,
nothing in Rent-A-Center requires fashioning completely
distinct arguments. In fact, it suggests that if the plaintiff
had argued the procedures rendered both the delegation
provision and the arbitration agreement unconscionable, the
court should have considered the challenge. See id.
The framework we announce today is supported by our
precedent and that of many of our sister circuits. In Brennan
v. Opus Bank, we held that a party resisting arbitration did
not challenge the delegation provision to permit federal court
review when the party argued only that the arbitration
agreement was invalid as a whole. 796 F.3d 1125, 1133 (9th
Cir. 2015). And in Lim, we determined that a delegation
provision and an arbitration agreement were both
unconscionable for the same reasons. 8 F.4th at 1006. In
the concluding paragraph in that opinion, we agreed with the
district court “that the same bases for concluding that the
delegation clause was procedurally and substantively
unconscionable . . . also rendered the arbitration provision
unconscionable.” Id.
Our rule is consistent with the rules in the Second, Third,
and Fourth Circuits. These circuits require a relatively low
barrier to entry: if a party’s challenge mentions and
12 BIELSKI V. COINBASE, INC.

specifically relates to the validity of the delegation provision
in its opposition to the motion to compel arbitration or other
pleading, the federal court has a green light to consider those
arguments. See Gingras v. Think Fin., Inc., 922 F.3d. 112,
126 (2d Cir. 2019) (holding that a party’s argument that
“[t]he delegation provision . . . is also fraudulent” was a
sufficiently “specific attack on the delegation
provision . . . to make the issue of arbitrability one for a
federal court” (alteration in original)); see also MacDonald
v. CashCall, Inc., 883 F.3d 220, 226 (3d Cir. 2018)
(requiring “at least [a] reference” to the delegation provision
for a federal court to review a party’s challenge); Gibbs v.
Sequoia Cap. Operations, LLC, 966 F.3d 286, 291 (4th Cir.
2020) (finding that a party’s statement “that the delegation
clause was unenforceable because of the prospective waiver
doctrine” was sufficient “to mount a challenge to the
delegation clause”). The Third and Fourth Circuits have
both explicitly recognized that “a party may rely on the same
arguments” to challenge the arbitration agreement and the
delegation provision. MacDonald, 883 F.3d at 226–27
(determining that a party specifically challenged a
delegation provision where it argued the delegation clause
and arbitration provisions were both unenforceable because
an arbitration procedure in the agreement was illusory); see
Gibbs, 966 F.3d at 294 (concluding that a party specifically
challenged a delegation provision where it argued the
delegation provision and arbitration agreement were
unenforceable for the same reason).
We recognize that not all circuits align with our view.
The Sixth and Eleventh Circuits require litigants to provide
more substance in their delegation provision challenge. In
the Sixth Circuit, “a party’s mere statement that it is
challenging the delegation provision is not enough; courts
 BIELSKI V. COINBASE, INC. 13

must look to the substance of that challenge [before
intervening].” In re StockX Customer Data Sec. Breach
Litig., 19 F.4th 873, 885 (6th Cir. 2021). There, the plaintiffs
“argu[ed] that the infancy doctrine is applicable to the
contract as a whole; but it is also applicable to each
arbitration clause and delegation clause when viewed
separately.” But the Sixth Circuit found this insufficient to
specifically challenge the delegation provision because “[the
infancy] defense directly affects the enforceability or
validity of the entire agreement.” The Eleventh Circuit set
forth similar conditions: a court can intervene “if, and only
if, the substantive nature of the party’s challenge
meaningfully goes to the parties’ precise agreement to
delegate threshold arbitrability issues.” Attix v. Carrington
Mortg. Servs, LLC, 35 F.4th 1284, 1304 (11th Cir. 2022).
There, “it [was] not sufficient for a party to merely say the
words, ‘I am challenging the delegation agreement.’” Id.
And, while the Sixth Circuit acknowledges “that a party may
challenge both the entire agreement and the delegation
provision under the same legal doctrine,” a party may fail in
the Sixth Circuit if “they simply recycle[] the same
arguments [in challenging the delegation provision] that
pertain to the enforceability of the agreement as a whole.”
In re StockX, 19 F.4th at 886. This is in line with the
approach taken by the Third and Fourth Circuits, which
allow challenges to proceed where a party relies on the same
legal doctrine and the same arguments in challenging the
arbitration agreement and the delegation provision. See
MacDonald, 883 F.3d at 227; see also Gibbs, 966 F.3d at
294.
In sum, we hold that to sufficiently challenge a
delegation provision, the party resisting arbitration must
specifically reference the delegation provision and make
14 BIELSKI V. COINBASE, INC.

arguments challenging it; a court need not, as required by the
Sixth and Eleventh Circuits, first evaluate the substance of
the challenge. We agree with the Third and Fourth Circuits
that a party may use the same arguments to challenge both
the delegation provision and arbitration agreement, so long
as the party articulates why the argument invalidates each
specific provision.
Applying these principles to the present case, we
conclude that Mr. Bielski specifically challenged the
enforceability of the delegation provision. Mr. Bielski
challenged the delegation provision at several points in the
proceedings below. For example, he contended that “[t]he
delegation provision is unenforceable because it is
procedurally and substantively unconscionable.” Similarly,
he argued that the process was procedurally unconscionable
because the “delegation provision [was] presented to
users . . . on a take it or leave it basis, with no opportunity to
opt out.” He further asserted that “the delegation provision
(as well as the larger agreement to arbitrate . . .) does not
contain even a modicum of bilaterality, and is not just
‘unfairly one-sided’—it is completely one sided.” He also
contended that “the arbitration agreement’s lengthy one-
sided pre-arbitration procedure” applies to the “disputes
identified in the delegation provision.”
Taken together, these arguments show that Mr. Bielski
specifically challenged the delegation provision: he not only
mentioned it, but crafted arguments directly addressing its
unconscionability. That Mr. Bielski argued the arbitration
agreement was unenforceable for the same reasons does not
defeat his challenge. Because Mr. Bielski specifically
challenged the enforceability of the delegation provision
under Section 2 of the FAA, the district court correctly
considered the challenge.
 BIELSKI V. COINBASE, INC. 15

B.
Coinbase further challenges how the district court
conducted its unconscionability analysis. Coinbase argues
the district court erred when it “backtrack[ed] through the
nested provisions of Coinbase’s ‘[a]rbitration [a]greement,’”
and urges us to hold that a court should “analyze a delegation
[provision] based on the [provision’s] own terms.” Mr.
Bielski argues the district court needed to consider the parts
of the agreement that impacted the delegation provision to
decide its enforceability. We agree with Mr. Bielski. In
evaluating an unconscionability challenge to a delegation
provision under California law, a court must be able to
interpret that provision in the context of the agreement as a
whole, which may require examining the underlying
arbitration agreement as well. See Cal. Civ. Code § 1641
(“The whole of a contract is to be taken together, so as to
give effect to every part, if reasonably practicable, each
clause helping to interpret the other.”); see also id. § 1650
(“Particular clauses of a contract are subordinate to its
general intent.”). To do otherwise would be nonsensical and
contrary to our precedent. See Holley-Gallegly v. TA
Operating, LLC, 74 F.4th 997, 1002 (9th Cir. 2023) (finding
that “[a] party is . . . permitted under Rent-A-Center to
challenge the enforceability of a delegation clause by
explaining how ‘unrelated’ provisions make the delegation
unconscionable.”).
In Holley-Gallegly, we determined that Rent-A-Center
does not confine “a party resisting arbitration . . . to the text
of the delegation clause to argue that the clause is
unconscionable.” Id. If a party may refer to provisions
outside the delegation provision, a court may, of course,
consider those provisions in determining the validity of the
delegation provision. There are two important reasons to
16 BIELSKI V. COINBASE, INC.

allow a court to look past the words of the delegation
provision and to the context of the contract as a whole. First,
the provision itself may not provide enough information for
the court to evaluate the challenge, especially where the
delegation provision incorporates defined terms. Because a
court’s unconscionability analysis “is highly dependent on
context” and “often requires inquiry into the ‘commercial
setting, purpose, and effect’ of the contract or contract
provision,” a court must be able to consider the context of
the agreement in evaluating the provision. Sanchez v.
Valencia Holding Co., 353 P.3d 741, 749 (Cal. 2015)
(quoting Cal. Civ. Code § 1670.5(b)). Second, restricting a
court’s review may incentivize contract drafters to write
sparse delegation provisions to evade meaningful review.
Drafters could hide layers upon layers of unconscionable
provisions in the arbitration agreement. For example, a
contract may contain a delegation provision that simply says,
“You must arbitrate questions of arbitrability.” Elsewhere
in the contract, however, there may be unconscionable
arbitration procedures, like a large filing fee or a distant site
for arbitration. These provisions could make arbitrating
arbitrability unconscionable because to do so would be
extremely burdensome and expensive. But if a court cannot
look through the delegation provision to the rest of the
contract, a court would fail to see how delegating questions
of arbitrability to an arbitrator was unconscionable. In this
example, specifically challenging the delegation provision
would require a party to reference the language from other
parts of the contract, and the court would need to evaluate
these parts of the contract to appreciate the meaning of the
delegation provision. In Holley-Gallegly, we rejected the
notion that the court is limited to a clause-bound
interpretation and do so here as well. Without considering
 BIELSKI V. COINBASE, INC. 17

the context of the contract, a court would be unable to
consider the full meaning of the delegation provision.
Here, there is even more reason to construe the
delegation provision in light of the arbitration agreement as
a whole: the delegation provision expressly incorporates a
defined term. The delegation provision provides:

This Arbitration Agreement includes,
without limitation, disputes arising out of or
related to the interpretation or application of
the Arbitration Agreement, including the
enforceability, revocability, scope, or validity
of the Arbitration Agreement or any portion
of the Arbitration Agreement. All such
matters shall be decided by an arbitrator and
not by a court or judge.

These words in and of themselves do not give the court
enough information to determine whether the delegation
provision is unconscionable; they are devoid of meaning
without context. If the provision delegates all disputes
arising out of the Arbitration Agreement, how can the court
not look to the Arbitration Agreement to understand the
delegation provision’s meaning? The Arbitration
Agreement provides that “[i]f we cannot resolve the dispute
through the Formal Complaint Process, you and we agree
that any dispute arising out of or relating to this
Agreement . . . shall be resolved through binding arbitration,
on an individual basis.” In so doing, the Arbitration
Agreement, too, incorporates a defined term: Formal
Complaint Process.
The district court needed to look through the delegation
provision to these defined terms to fully appreciate and
18 BIELSKI V. COINBASE, INC.

evaluate Mr. Bielski’s argument that the procedures in the
arbitration agreement “as applied to the delegation provision
rendered that provision unconscionable.” Rent-A-Ctr., 561
U.S. at 74. Accordingly, we find the district court correctly
considered the whole context surrounding the delegation
provision in its analysis of the provision’s validity.
C.
Finally, considering the delegation provision in context,
we evaluate whether it is unconscionable. Mr. Bielski
argues it is unconscionable because it is an adhesion
contract, lacks mutuality, and imposes one-sided, onerous
pre-arbitration procedures on users. We disagree, and
therefore reverse the district court’s denial of Coinbase’s
motion to compel arbitration.
Under California law, “the party opposing arbitration
bears the burden of proving any defense, such as
unconscionability.” Pinnacle Museum Tower Ass’n v.
Pinnacle Mkt. Dev. (US), LLC, 282 P.3d 1217, 1224–25
(Cal. 2012). Unconscionability “is concerned not with a
simple old-fashioned bad bargain, but with terms that are
unreasonably favorable to the more powerful party.”
Sanchez, 353 P.3d at 748 (internal quotation and citation
omitted). For a court to refuse to enforce a provision due to
unconscionability, a party must show the provision has
elements of both procedural and substantive
unconscionability. Id. Courts analyze unconscionability on
a sliding scale: “the more substantively oppressive the
contract term, the less evidence of procedural
unconscionability is required . . . and vice versa.” Id.
(quoting Armendariz v. Found. Health Psychcare Servs.,
Inc., 6 P.3d 669, 690 (Cal. 2000)).
 BIELSKI V. COINBASE, INC. 19

i.
Under California law, procedural unconscionability
addresses contract negotiation and formation and focuses on
“oppression or surprise due to unequal bargaining power.”
Pinnacle, 282 P.3d at 1232. A court may find oppression
where unequal bargaining power results in “no real
negotiation and an absence of meaningful choice,” Grand
Prospect Partners. v. Ross Dress for Less, Inc., 182 Cal.
Rptr. 3d 235, 248 (Ct. App. 2015), and surprise where “the
challenged term is hidden in a prolix printed form or is
otherwise beyond the reasonable expectation of the weaker
party,” Morris v. Redwood Empire Bancorp, 27 Cal. Rptr.
3d 797, 808 (Ct. App. 2005).
Mr. Bielski argues that the delegation provision is
procedurally unconscionable because it contained elements
of both oppression and surprise: oppression because the
provision was presented as an adhesion contract, and
surprise because the right to arbitrate is preconditioned on
“onerous procedural preconditions.” We agree that the
delegation provision is somewhat oppressive as California
courts have applied the unconscionability doctrine but
disagree that it contains any element of surprise.
We have little trouble finding the delegation provision
was presented as an adhesion contract because Mr. Bielski
had only two options: accept the delegation provision or
forgo a Coinbase account. See Armendariz, 6 P.3d at 689
(defining a contract of adhesion as a “standardized contract,
which [is] imposed and drafted by the party of superior
bargaining strength,” and only gives the weaker party “the
opportunity to adhere to the contract or reject it.” (quoting
Neal v. State Farm Ins. Cos., 10 Cal. Rptr. 781, 784 (Ct. App.
1961))). Because take-it-or-leave-it adhesion contracts
20 BIELSKI V. COINBASE, INC.

always contain “some degree of procedural
unconscionability,” see Sanchez, 353 P.3d at 751,
Coinbase’s delegation provision contains some level of
procedural unconscionability.
We reject, however, Mr. Bielski’s argument that the pre-
arbitration dispute resolution process establishes surprise
because the process is neither hidden nor beyond the
reasonable expectation of the user. First, there is no
argument that the process is hidden in the User Agreement:
it is clearly presented in Section 8, titled “Customer
Feedback, Queries, Complaints, and Dispute Resolution.”
Unlike in OTO, L.L.C. v. Kho, Coinbase’s dispute resolution
process is written in plain language and in a legible-sized
font. 447 P.3d 680, 691 (Cal. 2019) (finding surprise where
an agreement was “filled with statutory references and legal
jargon,” and “the text [was] visually impenetrable and
challenge[d] the limits of legibility.” (internal quotation
marks omitted)). Further, the pre-arbitration dispute
resolution procedures are not onerous or beyond the
reasonable expectation of the user. The agreement lays out
the steps a user must take if he or she has a dispute with
Coinbase: a user must first try resolving any dispute with
Coinbase informally, and if that fails, a user must file a
formal complaint with Coinbase before initiating arbitration.
Coinbase has obligations under this process too: it must
acknowledge receipt of the complaint; review and evaluate
it; and within fifteen business days, resolve the issue in the
way requested by the user, reject the user’s complaint and
provide reasons why, or offer an alternative solution. Pre-
arbitration dispute resolution procedures are commonplace
and can be both “reasonable and laudable.” Serpa v. Cal.
Sur. Investigations, Inc., 155 Cal. Rptr. 3d 506, 518 (Ct.
App. 2013). We therefore do not find these procedures to be
 BIELSKI V. COINBASE, INC. 21

beyond the reasonable expectations of the user. So, while
Mr. Bielski did establish some level of procedural
unconscionability, we find it is low.
ii.
Next, we turn to substantive unconscionability, which
relates “to the fairness of an agreement’s actual terms.”
Pinnacle, 282 P.3d at 1232. “California law seeks to ensure
that contracts, particularly contracts of adhesion, do not
impose terms that are overly harsh, unduly oppressive, or
unfairly one-sided.” Lim, 8 F.4th at 1002.
Mr. Bielski argues the delegation provision is
substantively unconscionable for two reasons: (1) it lacks
mutuality because only users are bound by the provision, and
(2) its incorporation of the pre-arbitration dispute resolution
process unfairly gives Coinbase a free peek into users’
complaints. While the district court agreed with Mr.
Bielski’s arguments, we do not find a level of substantive
unconscionability sufficient to render the provision
unenforceable.
A lack of mutuality and the presence of user-only pre-
arbitration dispute resolution processes can both weigh
toward finding a provision substantively unconscionable.
For the purpose of this analysis, we assume but do not decide
that the User Agreement requires users, but not Coinbase, to
arbitrate their claims. Because the delegation provision
applies to “disputes arising out of or related to the
interpretation or application of the Arbitration Agreement,”
if only users’ disputes can arise from the arbitration
agreement, the delegation provision only applies to users and
lacks mutuality.
22 BIELSKI V. COINBASE, INC.

But because “the California Supreme Court has
confirmed that a one-sided contract is not necessarily
unconscionable,” something more than the absence of
mutuality is required for us to find the provision
unconscionable. Tompkins v. 23andMe, Inc., 840 F.3d 1016,
1030 (9th Cir. 2016). It is undisputed that only Coinbase’s
users must engage in the pre-arbitration dispute resolution
process, giving Coinbase a “free peek” at users’ potential
claims without affording users that same opportunity. But
we do not find these pre-arbitration procedures to be overly
harsh or unfairly one-sided. Mr. Bielski relies on two cases
where courts found provisions substantively unconscionable
based on a lack of mutuality and unfair dispute resolution
processes. See Nyulassy v. Lockheed Martin Corp., 16 Cal.
Rptr. 3d 296, 307–08 (Ct. App. 2004); see also Pokorny v.
Quixtar, Inc., 601 F.3d 987, 998 (9th Cir. 2010) (applying
California law). The provisions in those cases contained a
third factor: a time restriction on the non-drafting parties’
ability to bring claims against the drafting party. That
restriction is missing here, and we do not find any other
conditions in the delegation provision that are “overly harsh,
unduly oppressive, or unfairly one-sided.” Lim, 8 F.4th at
1002. Here, a lack of mutuality in the delegation provision,
combined with the pre-arbitration dispute resolution process
establishes, at most, a low level of substantive
unconscionability.
Ultimately, we hold that the delegation provision’s low
levels of procedural and substantive unconscionability fail to
tip the scales to render the provision unconscionable and
therefore unenforceable. Therefore, the district court erred
in refusing to enforce the delegation provision.
 BIELSKI V. COINBASE, INC. 23

IV.
Accordingly, we reverse the district court’s order
denying Coinbase’s motion to compel arbitration.
REVERSED.

MILLER, Circuit Judge, concurring in part and concurring
in the judgment:

I join the court’s opinion with the exception of part
III(A). I agree with much of that part, including the court’s
holding that “to sufficiently challenge a delegation
provision, the party resisting arbitration must specifically
reference the delegation provision and make arguments
challenging it” and that “a party may use the same arguments
to challenge both the delegation provision and the arbitration
agreement, so long as the party articulates why the argument
invalidates each specific provision.” I do not join it,
however, because I do not agree with the court’s
characterization of the rule applied in other courts of appeals.
According to the court, our decision today contributes to
a circuit conflict because, although several circuits agree
with our approach, “[t]he Sixth and Eleventh Circuits require
litigants to provide more substance in their delegation
provision challenge.” The cited cases do not support that
description.
In In re StockX Customer Data Security Breach
Litigation, the Sixth Circuit held that “a party’s mere
statement that it is challenging the delegation provision is
not enough.” 19 F.4th 873, 885 (6th Cir. 2021). Similarly,
the Eleventh Circuit held in Attix v. Carrington Mortgage
24 BIELSKI V. COINBASE, INC.

Services, LLC, that a party challenging a delegation
provision must do more than “merely say the words, ‘I am
challenging the delegation agreement.’” 35 F.4th 1284, 1304
(11th Cir. 2022). I do not think anyone disagrees. I, at least,
do not read our decision today to mean that merely stating,
“I am challenging the delegation agreement,” would be
sufficient. To the contrary, the court’s opinion makes clear
that “the party resisting arbitration must specifically
reference the delegation provision and make arguments
challenging it.” (emphasis added).
It is true that both the Sixth and the Eleventh Circuits say
that “courts must look to the substance of the challenge.”
StockX, 19 F.4th at 885; see Attix 35 F.4th at 1304 (“[T]he
substantive nature of the party’s challenge [must]
meaningfully go[] to the parties’ precise agreement to
delegate threshold arbitrability issues.”). But nothing in
either circuit’s case law suggests that looking at “substance”
differs meaningfully from what we have prescribed:
assessing whether parties “specifically . . . ma[de] arguments
challenging [the delegation provision].” See StockX, 19 F.4th
at 885 (“[P]laintiffs were required to show that ‘the basis of
[their] challenge [is] directed specifically’ to the ‘delegation
provision.’” (quoting Rent-A-Center, W., Inc. v. Jackson,
561 U.S. 63, 71 (2010))); Attix, 35 F.4th at 1304 (“Further,
before deciding a challenge to the validity or enforceability
of a delegation agreement, we should ensure that the
challenge asserted really is about the delegation
agreement.”).
Ultimately, our description of the law of the Sixth and
Eleventh Circuits matters less than our articulation of the law
of this circuit. But the opinion’s discussion of out-of-circuit
law should not mislead readers into thinking that our rule is
more permissive than it actually is.