Arbitration Clause Under an App Ruled Unenforceable

In the case of Pierce v. Floatme Corp., No. GD 24-2169 (C.P. Allegh. Co. Dec. 19, 2024 Hertzberg, J.), the trial court overruled preliminary objections filed by a loan provider called Floatme Corp. in which the loan provider sought to have the class action filed against it dismissed pursuant to an arbitration clause contained within the provisions noted in the smartphone app when customers downloaded the app. 

In so ruling, Judge Hertzberg found that the arbitration provisions were not conspicuous enough for the users of the app so as to uphold any alleged arbitration agreement.  More specifically, the court found that  a "meeting of the minds" on the issue of arbitration was lacking in the case presented.  There was no unambiguous assent to arbitration by the customers in this case.

In his decision, Judge Hertzberg referred to a split Superior Court ruling in the case of Chilutti v. Uber Technologies.  In that Chilutti case, the Superior Court ruled that a binding arbitration agreement found in the Uber app failed to provide sufficient notice to customers that they were, in fact, agreeing to arbitration in the event of disputes and thereby waiving their right to a trial.  That Chilutti case is currently up before the Pennsylvania Supreme Court on appeal.

The Tort Talk post on the Chilutti case can be viewed HERE.

A copy of the Pierce v. Floatme Corp. case summarized in this Tort Talk blog post can be viewed at this LINK.

I send thanks to Thomas J. Foley, III if the Foley Law Firm in Scranton, PA for bringing this decision to my attention.