The court agreed on 6 November 2026 to decide whether and when bankruptcy courts can refuse to enforce arbitration agreements, after lower courts rejected the bank’s request.
The US Supreme Court has agreed to review whether and when a bankruptcy court can override the Federal Arbitration Act and refuse to enforce an agreement to arbitrate a dispute. Arbitration is a way to resolve a dispute outside court.
The court granted review in Goldman Sachs Bank USA v. Brown on 6 November. A bankruptcy court had rejected the bank’s request to send the borrowers' lawsuit to arbitration, and a federal district court and the US Court of Appeals for the 4th Circuit upheld that decision. Taking the case does not decide its merits.
Rhea Brown and Gregory Maze filed for bankruptcy and listed their Goldman Sachs credit card debts among their debts. They allege that the bank repeatedly sought payment during their automatic stays and willfully violated them. An automatic stay bars creditors, among other things, from trying to collect debts from someone who has filed for bankruptcy.
The borrowers sued the bank within their bankruptcy cases. Goldman Sachs pointed to arbitration clauses in their credit card agreements and asked the bankruptcy court to pause the lawsuit and require arbitration.
A divided 4th Circuit panel concluded that requiring arbitration would conflict with the Bankruptcy Code’s established policies and purposes. Goldman Sachs argued that the ruling conflicted with a US Court of Appeals for the 2nd Circuit decision and threatened the enforceability of arbitration agreements widely used in consumer credit contracts.
SCOTUSblog said the case would likely be argued in 2027, with a decision following by late June or early July.
The cases concern alleged police misconduct at cost-of-living protests and remain under investigation.
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