Professional Liability

Plaintiffs cannot avoid arbitration through premature appeals challenging the validity of an arbitration agreement. In a landmark decision, the Supreme Court of Pennsylvania, in a 6-0 opinion, recently held that a trial court order compelling arbitration and staying court proceedings does not qualify as an immediately appealable collateral order under Pennsylvania Rule of Appellate Procedure 313. See Chilutti v. Uber Techs., Inc., --- A.3d ---, 2026 WL 156181 (Pa. Jan. 21, 2026). The impact of the Court’s decision clarifies that litigants may not immediately appeal an order compelling arbitration; instead, they must patiently await a final judgment to avail themselves of appellate relief.

Under Pennsylvania law, appellate courts have limited jurisdiction and may entertain appeals from final orders. See Pa.R.A.P. 341(a). In general, a final order disposes of all claims and parties. See Pa.R.A.P. 341(b)(1). Although an order denying a motion to compel arbitration is deemed final for appeal purposes under Pa.R.A.P. 311(b)(8) and 42 Pa. C.S. § 7320(a)(1), an appeal from an order compelling arbitration has no such finality under the Pennsylvania Code. One exception to the “final judgment” rule is the collateral order doctrine. Pennsylvania Rule of Appellate Procedure 313 allows parties to appeal as of right from an interlocutory collateral order. To qualify as a collateral order, (1) the order must be separate from and collateral to the main cause of action; (2) the right involved must be too important to be denied review; and (3) the question presented must be such that if review is postponed until final judgment, the claim will be irreparably lost. Pa.R.A.P. 313(b).

In Chilutti, Plaintiffs Keith and Shannon Chilutti filed a complaint against Uber Technologies, Inc. in the Philadelphia County Court of Common Pleas, alleging Ms. Chilutti sustained injuries during an Uber transport from a medical appointment to her home. In response, Uber filed a petition to compel arbitration, asserting Plaintiffs had agreed to arbitration at the time they enrolled in Uber. On April 26, 2021, the trial court granted Uber’s petition and stayed all court proceedings pending the resolution of arbitration.

The Chiluttis appealed the trial court’s order, arguing that an order granting compelled arbitration qualifies as an immediately appealable collateral order under Pennsylvania Rule of Appellate Procedure 313. The Chiluttis also asserted the Uber arbitration agreement was invalid because it deprived Plaintiffs of their constitutional right to a trial by jury. On appeal, the Superior Court reversed and remanded the trial court’s order, holding first that an order compelling arbitration satisfies the criteria for an immediately appealable collateral order. Chilutti v. Uber Techs., Inc., 300 A.3d 430, 439 (Pa. Super. 2023) (en banc). The Court reasoned that the third requirement for a collateral order was satisfied, as delaying review of a final judgment “may result in the irreparable loss of [the Chiluttis’] claims.” Id. Because the standard of review in common law arbitration appeals would be limited under 42 Pa. C.S. § 7341, the Court determined that appellant satisfied the third prong for collateral appeals under Pennsylvania Rule of Appellate Procedure 313. Id. Based on this reasoning, the Superior Court concluded it had jurisdiction to resolve the merits of the Chiluttis’ claim, and ultimately held the parties did not enter into a valid arbitration agreement. Id.

The Supreme Court of Pennsylvania granted review to determine whether the Superior Court lacked appellate jurisdiction to immediately review an interlocutory order staying litigation pending an arbitration. The Court reversed the lower court’s decision, holding that the Superior Court erred as a matter of law in determining the trial court’s order satisfied the third prong of the collateral order doctrine. Chilutti, 2026 WL 156181 *6. Relying upon the plain language of 42 Pa. C.S. § 7341, the Supreme Court reasoned that the limited standard of review applies only to arbitrators’ awards rendered in nonjudicial arbitration, not trial court decisions or orders. Id. at *5. To this end, because the basis of the Chilutti’s appeal would be predicated on a trial court order—and not a nonjudicial arbitration award—the litigants would not suffer irreparable loss of their rights under Pa.R.A.P. 313(b) by delaying appellate review of a trial court order granting compelled arbitration. Id. Writing for the Court, Justice Brobson opined that “[i]f the Chiluttis are later aggrieved by the final judgment that the trial court enters after the matter is returned to that court following arbitration, then the Chiluttis can appeal that judgment to the Superior Court.” Id. *6. Through this decision, the Court reaffirmed its commitment to the underlying policy of the final order doctrine, which promotes “formality, completeness, and efficiency.” Id. *4. Accordingly, the Superior Court lacked jurisdiction to consider the merits of the claims on appeal regarding the validity of the arbitration agreement. Id. *7.

The ramifications of the Court’s decision in Chilutti are significant for those navigating the complex intersection of arbitration and litigation. The Court’s decision is also a decisive victory for companies seeking to avoid premature appeals of trial court orders enforcing arbitration clauses. Companies and other enterprises should be conscious of appellate courts’ limited jurisdiction when entering into arbitration clauses. In cases where compelled arbitration is ordered by courts pursuant to an arbitration agreement, an immediate collateral appeal may not be taken as of right pursuant to the Supreme Court’s application of Pennsylvania Rule of Appellate Procedure 313(b). Instead, the aggrieved party must await a final order in the trial court (after arbitration proceedings conclude) before seeking appellate relief. The Supreme Court’s decision in Chilutti reinforces the importance of adopting well-drafted arbitration clauses when entering everyday business transactions. It also reaffirms the Pennsylvania judiciary’s fidelity to promoting freedom of contract, including through arbitration clauses, which may ensure confidentiality, reduce cost, and provide an alternative forum for dispute resolution.