This could be big.
Still a crook any way you look
A federal magistrate judge has struck down a 100-plus year old Texas statute authorizing the state’s attorney general to investigate certain businesses and organizations for violating state laws.
Judge Mark Lane of the Western District of Texas said his decision “wasn’t that hard” because Texas’ Request to Examine statute doesn’t expressly allow a served party to pursue pre-compliance judicial review before producing requested records.
Lane announced the decision at the end of a hearing Friday, siding with Spirit AeroSystems, Inc., a Kansas-based manufacturer for Boeing 737 jets that the state is investigating for alleged misrepresentations about its parts.
The order weakens the investigatory ability of Texas Attorney General Ken Paxton (R) and raises questions about a case pending before the Texas Supreme Court in which Paxton’s office is investigating an organization serving the migrant community. That case, which involves the El Paso nonprofit Annunciation House, is set for oral arguments in January. As of Friday the state statute that Texas used to serve the agency is unconstitutional.
Lane said the Request to Examine statute was written for another time, and that recently it has been “frankensteined” by Paxton’s office to include exceptions that don’t appear in the law. The law requires immediate production of requested records, leaving a served party no chance to seek pre-compliance judicial review. The US Supreme Court ruled in 2015 that a served party is entitled to a court’s review in Los Angeles v. Patel.
Texas tried to work around the high court’s decision by offering Spirit 20 days to turn over records, Lane said. But the statute makes no mention of such a grace period, and there’s no telling if Paxton or a future attorney general will enforce the law as written and demand immediate access, he said.
“I’m a literal guy—black and white,” Lane said. “This call for me is easy.”
[…]
Speaking specifically of the Spirit investigation, Lane called it “very aggressive” and “an enormous reach” because the manufacturer has a minimal presence in Texas with just one small facility and about 100 employees.
But Lane announced early on that he would consider only a challenge to the law, and not specifically how it applies to Spirit.
Paxton’s request to Spirit sought documents related to a federal securities fraud class action filed against the parts manufacturer in New York. It also sought documents related to DEI hiring practices.
What makes this a potential big deal is that Paxton has been using this law in his ongoing harassment campaign against immigrantion-focused nonprofits. The Trib explains.
It is unclear how Friday’s ruling might affect cases in which Paxton’s office has used requests to examine that remain unresolved in state courts.
“The office of the Attorney General does not have arbitrary power under an administrative government regulation to demand unfettered access to search and seize property of any business in Texas,” said Kristin Etter, director of policy and legal service at Texas Immigration Law Council, an organization aimed at protecting the rights of Texas immigrants and refugees. “This is textbook 4th Amendment jurisprudence that protects us all from unreasonable searches and seizures.”
The consumer protection division of the Attorney General’s Office has increased its scrutiny of nonprofits whose missions are largely in opposition to Paxton’s politics, an investigation by The Texas Tribune and ProPublica found. Requests to examine are just one of several legal mechanisms he’s used to pursue those investigations.
A request to examine is a broad tool that is rooted in the authority the state’s constitution of 1876 gave the attorney general over private corporations, according to University of Texas at Austin School of Law adjunct professor Randy Erben, who spoke to ProPublica and the Tribune last spring.
“This is something that goes way, way back to the origins of our Constitution and the basic distrust of private corporations when they wrote that document following Reconstruction,” Erben said.
It’s part of the state’s business and organizations code, applicable to any entity that files incorporation documents within the state. That includes for-profit corporations, like Spirit AeroSystems, and nonprofits.
In late 2022, Paxton’s office sent three separate requests to examine to organizations that had received funding from the Texas Bar Foundation. U.S. Rep. Troy Nehls, R-Richmond, had alleged the foundation was donating to entities that encourage and fund illegal immigration.
The following spring, amid a legislative fight over gender-affirming treatment for minors, Paxton sent requests to two hospitals –– Dell Children’s Medical Center in Austin and Texas Children’s Hospital in Houston — requesting a range of documents related to such care.
The treatment was still technically legal when the office sent the letters in April and May, respectively, but state lawmakers passed a ban the same week Paxton launched his investigation of Texas Children’s Hospital. In anticipation of the law going into effect, the hospital told employees it would discontinue certain gender-affirming treatments.
In perhaps the most well-known case of its kind, Paxton’s office hand-delivered a request to examine El Paso-based Annunciation House, a nonprofit that’s served immigrants and refugees seeking shelter for decades. Paxton accused the migrant shelter network of violating state laws prohibiting human smuggling and operating a stash house.
Typically, these types of letters are mailed and organizations are given a period of days or weeks to respond. In this case, the attorney general initially wanted immediate access to Annunciation House’s documents, including all logs identifying immigrants who received services at Annunciation House going back more than two years. The attorney general later agreed to give the organization an additional day to respond.
Following a legal dispute, a state judge in July denied Paxton’s efforts to shut down Annunciation House.
However, Paxton appealed directly to the state’s all-Republican Supreme Court, which is scheduled to hear arguments in the case early next year.
The Supreme Court could certainly interpret the federal judge’s ruling in a way that still allows Paxton to do the things that he loves to do. But it’s at least possible that they’ll cop to some restrictions on him. I sure hope they do.