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PA Supreme Court vacates appellate court decision imposing heightened consent requirement for arbitration agreements on procedural basis without addressing the merits
In Chilutti v. Uber Technologies the Supreme Court of Pennsylvania held that the trial court’s decision to transfer a case to binding arbitration did not qualify as an immediately appealable collateral order. Because the Supreme Court held that an order transferring the case to binding arbitration was not a collateral order, the Supreme Court did not rule on whether the parties had a valid agreement to arbitrate or the heightened standard the appellate court had applied to enforcement of browsewrap arbitration agreements.
Under Pennsylvania Rule of Appellate Procedure 313, an appeal may be taken as of right from a collateral order of a trial court, a collateral order being defined as “an order separable from and collateral to the main cause of action where the right involved is too important to be denied review and the question presented is such that if review is postponed…the claim will be irreparably lost.”
The Supreme Court of Pennsylvania reasoned pursuant to the Collateral Order Doctrine that the definition of collateral order contains three prongs – (1) whether it is separable from, and collateral to, the main cause of action; (2) the right is too important to be denied review; and (3) the question presented must be such that if review is postponed until after judgment, the claim will be irreparably lost. The Court held that the third prong of this test was not met in this case, because once the case was transferred to binding arbitration, it was stayed in the lower court. If plaintiffs were aggrieved by the judgment of the arbitrators, they could appeal the enforcement of the arbitration agreement de novo to the Superior Court of Pennsylvania.
While plaintiffs argued to the Supreme Court that their substantial loss of money litigating the claim was sufficient to meet the third prong of the Collateral Order Doctrine, the Court disagreed. The Supreme Court vacated the Superior Court’s judgment and remanded the case to the Philadelphia Court of Common Pleas with instruction to quash the plaintiffs’ appeal.
Critically, the Supreme Court’s decision avoided a discussion of the merits of the appellate decision and the heightened standard it established for validating browsewrap arbitration agreements in Pennsylvania.