Court Opinion

ID: 8213538
Source: CourtListenerOpinion
Date Created: 2022-10-12 18:10:53.92892+00
Date Added: 2024-06-11T16:42:23.455582
License: Public Domain

J-A03009-22

                              2022 PA Super 172

SHANNON CHILUTTI AND KEITH                        IN THE SUPERIOR COURT
CHILUTTI, H/W                                        OF PENNSYLVANIA

                          Appellants

                     v.

UBER TECHNOLOGIES, INC., GEGEN,
LLC, RAISER-PA, LLC, RAISER, LLC,
SARAH’S CAR CARE, INC. AND
MOHAMMED BASHIER

                          Appellees                   No. 1023 EDA 2021

                 Appeal from the Order Entered April 26, 2021
             In the Court of Common Pleas of Philadelphia County
                       Civil Division at No: 200900764

BEFORE: STABILE, J., DUBOW, J., and MCCAFFERY, J.

DISSENTING OPINION BY STABILE, J.:               FILED OCTOBER 12, 2022

      While I do not discount the concerns expressed by the Majority with

regard to Internet contracts, I believe Appellants’ appeal should be quashed

as an appeal from a collateral order. Therefore, I respectfully dissent.

      As the Majority observed, the trial court granted Uber’s petition to

compel arbitration and stayed the proceedings with respect to the co-

Appellees.   In its Rule 1925(a) opinion, the trial court did not discuss the

parties’ arguments regarding the agreement to arbitrate (or lack thereof) or

explain its basis for granting the motion to compel arbitration. Rather, the

court limited its discussion to the appealability of a motion to compel

arbitration and concluded that its order is “not appealable at this time because
J-A03009-22

the parties have not been forced ‘out of court.’” Trial Court Opinion, 6/2/21,

at 2 (citing Maleski v. Mut. Fire, Marine & Inland Ins. Co., 633 A.2d 1143,

1145 (Pa. 1993)).

      Initially, I note that “[a]n order compelling arbitration and staying court

action is not final; rather, it is interlocutory because the parties are not forced

‘out of court.’” Maleski, 633 A.2d at 1145 (citation omitted). As our Supreme

Court stated in Maleski, “[T]here is no express statutory authority providing

for an appeal from an interlocutory order in a case where arbitration is

compelled[.]” Id. at 1146 (footnote omitted).           Appellants nevertheless

contend that we have jurisdiction to entertain this appeal as a collateral order

pursuant to Pa.R.A.P. 313(b). As this Court has recognized:

      Under Pa.R.A.P. 313(b), a collateral order is an order that 1) is
      separable from and collateral to the main cause of action; 2)
      involves a right too important to be denied review; and 3)
      presents a question that, if review is postponed until final
      judgment in the case, the claim will be irreparably lost.

In re Bridgeport Fire Litigation, 51 A.3d 224, 230 n.8 (Pa. Super. 2012)

(citation omitted).   All three prongs of the collateral order test must be

satisfied for this Court to exercise jurisdiction over an otherwise non-final

order. Spanier v. Freeh, 95 A.3d 342, 345 (Pa. Super. 2014).

      Here, while the first two prongs are arguably satisfied, I conclude that

the third prong is not. In the event Appellants might not be satisfied with the

results of their arbitration, they could seek review of the arbitrator’s decision.

                                       -2-
J-A03009-22

      In this regard, I note that Uber’s Terms of Use call for arbitration

pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C.A., § 1 et seq.

Nevertheless, as the Court of Appeals for the Third Circuit acknowledged:

      Arbitration is fundamentally a creature of contract. The Supreme
      Court has stated: “arbitrators derive their authority to resolve
      disputes only because the parties have agreed in advance to
      submit such grievances to arbitration.” AT & T Techs., Inc. v.
      Communications Workers, 475 U.S. 643, 648–49, 106 S.Ct.
      1415, 1418, 89 L.Ed.2d 648 (1986) (citation omitted). The
      Federal Arbitration Act makes written agreements to arbitrate
      “valid, irrevocable, and enforceable” on the same terms as other
      contracts. 9 U.S.C.A. § 2 (West 1970). There must be evidence
      sufficient to establish the parties’ consent to arbitration. As a
      matter of contract, no party can be forced to arbitrate unless that
      party has entered into an agreement to do so. That agreement
      must be express and unequivocal.

Kaplan v. First Options of Chicago, Inc., 19 F.3d 1503, 1512 (3d Cir.

1994), aff’d, 514 U.S. 938, 115 S.Ct., 1920, 131 L.Ed.2d (1995) (some

citations omitted).    “An arbitrator's decision to assert jurisdiction over

objection is, however, subject to a much broader and more rigorous judicial

review than an arbitral decision on the merits. Because it is a question for the

court to decide, it is subject to de novo judicial review.”       Id. (internal

quotations omitted).

      In affirming the Third Circuit’s decision, the United States Supreme

Court stated, “Courts should not assume that the parties agreed to arbitrate

arbitrability unless there is ‘clear and unmistakable evidence’ that they did

so.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115

S.Ct. 1920, 131 L.Ed.2d (1995) (alterations and citations omitted).

                                     -3-
J-A03009-22

       While Uber’s Terms of Use call for arbitration pursuant to the FAA, this

Court has determined that “the FAA standards of review do not apply to a

state trial court’s review over an arbitration award created and enforced under

the FAA.” Trombetta v. Raymond James Financial Services, Inc., 907

A.2d 550, 569 (Pa. Super. 2006).1 Therefore, we look to the Pennsylvania

arbitration laws.2

____________________________________________

1 In Trombetta, the Court explained that, “[t]he language of FAA §10 itself
substantiates this conclusion. Section 10 explicitly states: ‘the United States
court in and for the district where in the award was made . . .’ may vacate an
arbitration award when certain circumstances are present.” Id., 907 A.2d at
568-69 (emphasis and ellipses in original).          “We believe this phrase
constitutes plain language stating that FAA § 10 only applies to proceedings
in United States district courts.” Id. at 569 (emphasis added). Because a
review of the Complaint filed in this action reveals that Appellants as well as
some Appellees are residents of or entities incorporated in Pennsylvania, there
is no diversity of citizenship (or federal question) upon which jurisdiction in
the district court could be based.

A recent United States Supreme Court decision confirms that review of an
arbitral award in this case would be governed by state law. In Badgerow v.
Walters, 142 S.Ct. 1310 (2022), the Court held that “Congress has not
authorized a federal court to adjudicate a Section 9 or 10 application just
because the contractual dispute it presents grew out of arbitrating different
claims, turning on different law, that (save for the parties’ agreement) could
have been brought in federal court.” Id. at 1318. Further, “[t]he statutory
plan . . . makes Section 9 and 10 applications conform to the normal—and
sensible—judicial division of labor: The applications go to state, rather than
federal, courts when they raise claims between non-diverse parties involving
state law. Id. at 1321.
2 We note that Uber’s arbitration provisions reference applicability of California
law in the event the FAA rules are found not to apply. If Appellants should
attempt to vacate an award of the arbitrator, and if it is determined that
California law applies, the court could look to Cal. Code Civ. Proc.
§ 1286.2(a)(4), which provides for vacating an award in the event “arbitrators
(Footnote Continued Next Page)

                                           -4-
J-A03009-22

       As this Court explained in Sage v. Greenspan, 765 A.2d 1139 (Pa.

Super. 2000), appeal den’d, 784 A.2d 119 (Pa. 2001):

       Chapter 73 of the Pennsylvania Judicial Code governs statutory,
       common law and judicial arbitration. 42 Pa.C.S.A. §§ 7301–
       7362. Sections 7301–7320 of Subchapter A apply to statutory
       arbitration proceedings and are known collectively as the
       Pennsylvania Uniform Arbitration Act (“UAA”).              Sections
       7341 and 7342 of Subchapter B apply to common law arbitration
       proceedings. 42 Pa.C.S.A. §§ 7341–7342[.] Whether an
       arbitration agreement is subject to the UAA (Sections 7301–
       7320 of Subchapter A) or common law (Sections 7341–7342 of
       Subchapter B) arbitration principles depends on whether the
       agreement is in writing and expressly provides for arbitration
       under the UAA. 42 Pa.C.S.A. § 7302(a)[.] Absent an express
       statement in the arbitration agreement, or a subsequent
       agreement by the parties which calls for the application of the UAA
       statutory provisions in Subchapter A, an agreement to arbitrate is
       conclusively presumed to be at common law and subject to the
       provisions of Subchapter B.

Id. at 1141 (citations omitted).3 Because the arbitration provisions in Uber’s

Terms of Use make no reference to the UAA, the standards of review for

____________________________________________

exceeded their powers and the award cannot be corrected without affecting
the merits of the decision upon the controversy submitted.” See Cable
Connection, Inc. v. DIRECTV, Inc., 190 P.3d 586, 600 (Ca. 2008) (“The
powers of an arbitrator derive from, and are limited by, the agreement to
arbitrate. Awards in excess of those powers may, under section[] 1286.2 and
1286.6 be corrected or vacated by the court”) (citations omitted).

3 Because Appellants’ Uber registrations and the accident giving rise to
Appellants’ claim predated July 1, 2019, the effective date of the Revised
Statutory Arbitration Act, 42 Pa.C.S.A. § 7321.1-31, the provisions of that Act
are not implicated.

                                           -5-
J-A03009-22

common law arbitration should apply in the event of a challenge to an award

of the FAA arbitrator.

      In Sage, we recognized that “[t]he standard of review for a common

law arbitration is very limited.” Id. at 1142. The award of an arbitrator “is

binding and may not be vacated or modified unless it is clearly shown that a

party was denied a hearing or that fraud, misconduct, corruption or other

irregularity caused the rendition of an unjust, inequitable or unconscionable

award.” Id. (quoting Prudential Prop. & Cas. Ins. Co. v. Stein, 683 A.2d

683, 684 (Pa. Super. 1996)). Because a party cannot be forced to arbitrate

absent an agreement to do so, see First Options, supra, if a court

determines there was no agreement to arbitrate, and that Appellants

submitted to arbitration only because they were compelled to do so, we

believe the court could properly vacate an award based on a finding that the

resulting award was “unjust, inequitable or unconscionable.”           Therefore,

postponing review until final judgment in this case will not result in irreparable

loss of Appellants’ claim as it can be reviewed in accordance with the

applicable Pennsylvania arbitration statutes.        Appellants have failed to

demonstrate that postponing review until final judgment in the case will result

in irreparable loss of their claim. Therefore, they have not satisfied the third

prong of the collateral order test.

      “Because there is no express statutory authority providing for an appeal

from an interlocutory order in a case where arbitration is compelled,” Maleski,

                                      -6-
J-A03009-22

633 A.2d at 1146, and because Appellants cannot satisfy the third prong of

the collateral order test, I would quash the appeal.

                                     -7-