Pennsylvania High Court Quashes Challenge to Uber’s ‘Clickwrap’ Arbitration Agreement

The Pennsylvania Supreme Court has vacated a lower appeals court ruling that had found ride-hailing firm Uber’s “clickwrap” mandatory arbitration agreement unenforceable because it would deprive a husband and wife of their right to a jury trial for their injury claims without explicit notice.

The state’s high court said the Superior Court jumped the gun in taking the plaintiffs’ appeal from a trial court’s ruling that compelled them to arbitrate. The high court said that the plaintiffs — Shannon Chilutti and her husband Keith— must first honor the arbitration agreement and, if unhappy with the final judgment following arbitration, then they may appeal that judgment to the Superior Court.

The case arose out of a motor vehicle accident that occurred in 2019. Shannon Chilutti, who is wheelchair bound, was injured while riding in a car provided by Uber on the way home from a medical appointment. After Uber insisted her injury claims must go to arbitration, Chilutti and her husband both filed suits.

Uber argued that when riders register for its service they signify that they agree to be bound by the mandatory arbitration provision found in the hyperlinked terms and conditions, thereby relinquishing their right to a jury trial.

The Chiluttis argued that they did not enter into an arbitration agreement because they never clicked on, viewed, or read the hyperlinked agreement on Uber’s website or smartphone application and thus should not be forced to arbitrate or lose their right to a jury trial.

Stricter Burden

A trial court granted Uber’s motion to compel arbitration but on appeal the Superior Court reversed, finding that a stricter burden of proof is necessary to demonstrate a party’s assent to arbitration where the important right to a jury trial is at stake.

The Superior Court opinion called for more judicial scrutiny of the growing use of arbitration agreements. The court ruled that the Uber approach is inadequate because it does not inform users in an “explicit and upfront manner” that they are giving up a constitutional right to seek damages through a jury trial proceeding.

As a result of what it found was the inadequate notice, the Superior Court found that the parties did not have a valid arbitration agreement. The plaintiffs could not be compelled to arbitrate where there was no agreement, the state’s appeals court concluded in reversing the trial court order.

Final Order

Now the state’s high court has found fault with the Superior Court for accepting the Chiluttis’ appeal before there was a final order from the trial court. Generally speaking, Pennsylvania’s appellate courts have jurisdiction to entertain appeals from the final orders of trial courts.

“The final order rule reflects the long-held limitation on review by both federal and state appellate courts. Considering issues only after a final order maintains distinctions between trial and appellate review, respects the traditional role of the trial judge, and promotes formality, completeness, and efficiency,” the Supreme Court stated.

In this case, the high court said the trial court’s order “indisputably” was not final, as it merely granted Uber’s petition to compel arbitration and stayed further court proceedings until the completion of arbitration. In other words, the order did not dispose of all claims or all parties.

The Supreme Court said the Superior Court lacked jurisdiction to entertain the merits of the Chiluttis’ substantive claim regarding the parties’ alleged lack of a valid arbitration agreement.

In a January 21 opinion, the high court, by a 5-0 vote, vacated the Superior Court’s judgment and remanded the matter to that court with instructions to quash the Chiluttis’ appeal.

Topics Sharing Economy Pennsylvania Ridesharing