No Merits Discovery While Motion to Compel Arbitration Pending

When a motion to compel arbitration is pending in court, parties are not entitled to merit-based discovery.  This principle was affirmed in the case of In re Energy Transfer LP, Enable Midstream Partners, LP and Enable GP, LLC, No. 14-23-00872-CV (April 9, 2024).

On the same day, the trial court made two decisions: it denied the defendant’s motion to stay and compel arbitration, while granting the plaintiff’s motion to compel requests and a deposition related to the merits of the dispute which had previously been filed while the motion to stay and compel arbitration was pending.

The Texas 14th Court of Appeals holds that once a motion to compel arbitration is filed, the trial court should limit discovery to arbitration-related issues because broad merit-based discovery would undermine the benefits of arbitration.

This state court opinion, issued on April 9, 2024, is consistent with a recent decision by the United States Supreme Court in Smith et al. v. Spizzirri et al., No. 22-1218 (May 16, 2024).  According to Spizzirri, when a federal district court determines that a lawsuit involves an arbitrable dispute and a party has requested a stay pending arbitration, §3 of the Federal Arbitration Act compels the court to issue the stay.