In Fletcher v. Edward Jones Trust Co., a party sued a trust company for inappropriately distributing funds from an account, and the trial court granted the trust company’s motion to compel the dispute to arbitration. No. 11-19-00017-CV, 2019 Tex. App. LEXIS 1280 (Tex. App.—Eastland February 21, 2019, Decided; February 21, 2019, no pet. history). The plaintiff attempted to appeal the order granting the motion to compel arbitration. The court of appeals requested briefing from the parties regarding whether the court had jurisdiction over the appeal. The court noted that there was a statute that allowed interlocutory appeals from orders that deny arbitration, not from orders that compel arbitration. Tex. Civ. Prac. & Rem. Code Ann. § 171.098; Chambers v. O’Quinn, 242 S.W.3d 30, 31 (Tex. 2007). The court noted that the plaintiff filed a response that cited several cases involving mandamus proceedings, rather than direct appeals. The court held that it did not have jurisdiction over an appeal:
Unless specifically authorized by statute, appeals may be taken only from final judgments. Tex. A & M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840-41 (Tex. 2007); Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). Section 171.098 authorizes an interlocutory appeal from an order “denying an application to compel arbitration” and an order “granting an application to stay arbitration.” Civ. Prac. & Rem. § 171.098(a)(1)-(2) (emphasis added). The order from which Appellant attempts to appeal is not a final judgment, nor is it an order staying arbitration or denying an application to compel arbitration. An interlocutory appeal from an order granting a motion to compel arbitration is not authorized. See id. § 171.098; Chambers, 242 S.W.3d at 31; see also In re Gulf Expl., LLC, 289 S.W.3d 836, 839-40 (Tex. 2009) (adopting rule that appellate courts in Texas may review, on direct appeal, an order compelling arbitration if the order also dismisses the underlying litigation, making it a final order, rather than an interlocutory one). Because an interlocutory appeal is not authorized in this case and because a final, appealable order has not been entered, we lack jurisdiction and must dismiss this appeal. See Tex. R. App. P. 42.3.
Interesting Note: This case highlights the complete inequity involved in appellate courts’ review of orders on motions to compel arbitration. An order denying a motion to compel arbitration can be appealed immediately, but an order granting same cannot. Apparently, the cost and expense of participating in a needless trial is unfair to a party seeking arbitration, but the cost and expense of participating in a needless arbitration is not unfair to a party fighting arbitration. The potential of a loss of contractual rights outweighs the loss of constitutional rights. This issue has been resolved by the Texas Legislature in the jurisdictional statutes that it passed.
There is an alternative method to seek appellate review of a trial court’s order granting arbitration: mandamus relief. Where a trial court abuses its discretion in ruling on a matter and an appeal is inadequate, a court of appeals should grant mandamus relief. Potentially, a court of appeals could grant mandamus relief to reverse a trial court’s order granting arbitration. But even where a trial court clearly abuses its discretion in granting a motion to compel arbitration, the Texas Supreme Court generally would deny mandamus relief: “In the context of orders compelling arbitration, even if a petitioner can meet the first requirement, mandamus is generally unavailable because it can rarely meet the second. If a trial court compels arbitration when the parties have not agreed to it, that error can unquestionably be reviewed by final appeal.” In re Gulf Expl., LLC, 289 S.W.3d 836, 842 (Tex. 2009) (orig. proceeding). See also In re Vantage Drilling Int’l, 555 S.W.3d 629 (Tex. App.—Houston [1st Dist.] 2018, orig. proceeding) (appellate court denied a request for mandamus relief of a trial court’s order compelling arbitration because the petitioner had adequate remedy by appeal). Therefore, in most cases, mandamus relief will also not be available.
Because of the statutes at play, the Texas Supreme Court could not hold that an appellate court has jurisdiction over an appeal from an order granting arbitration, but it certainly could hold that an appellate court could grant mandamus relief. Indeed, the Texas Supreme Court formerly held that an appellate court could grant mandamus relief to correct a trial court’s error in denying arbitration, denying a motion to dismiss due to a forum-selection clause, or denying the impact of a contractual jury-waiver clause. It is not clear why the Texas Supreme Court is so ready to assist defendants in enforcing litigation-altering contractual clauses, but is so reluctant to support a plaintiff’s constitutional rights, such as due process, due course, and the right to a jury trial.