Texas’ 100-Plus Year Investigatory Tool Ruled Unconstitutional

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.”

The parties were in Lane’s court on cross motions for summary judgment and Spirit’s request for an injunction.

Lane instructed Spirit’s lawyer, Matthew Martens of WilmerHale, to prepare an order for Lane to sign detailing the concerns the judge laid out about the law. That’s due by the morning of Oct. 22.

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.

Paxton has used requests to examine to probe other organizations, including a children’s hospital that he alleged unlawfully provided transgender medical care. His office also uses another mechanism for getting records called a civil investigative demand. That process is seemingly untouched by Friday’s decision because it allows the responding party to seek judicial review.

Paxton’s office didn’t immediately respond to a request for comment about the decision.

The case is Spirit AeroSystems, Inc. v. Paxton, W.D. Tex., No. 1:24-cv-00472, 10/11/24.