Texas Judge Probes Paxton’s Quest for Records of LGBTQ Nonprofit

Attorney General Ken Paxton’s (R) persistent investigation into a nonprofit organization that supports LGBTQ+ people and families drew the focus of a Texas trial court judge Monday, who sought to understand the precedent for Paxton’s efforts.

State District Judge Amy Clark Meachum, a Travis County Democrat, pressed Paxton’s lawyers for examples of past cases the office has spent “this much effort into a non-target of an investigation.” Paxton’s lawyers provided no specific cases.

PFLAG Inc., a nonprofit that supports LGBTQ+ people and their families, is asking Meachum to deny for a third time — permanently now — a pre-suit demand for documents that Paxton says may establish the presence of insurance fraud. Paxton alleges the nonprofit has knowledge of a scheme in which medical providers circumvent the state’s ban on child gender modification treatment by labeling a procedure as something else.

“PFLAG has done no wrongdoing, but we believe they have information,” David Shatto, a lawyer in Paxton’s office, said in court.

Meachum didn’t rule on the document exchange, saying she needs time to consider a case that appears to raise an issue of first impression. PFLAG, unlike other entities that willingly comply with civil investigative demands in Texas, appears to be the first to fight it in court.

“There’s no published case law,” Meachum said.

Over four hours at a hearing in Austin, PFLAG’s lawyers said the organization has no information about the alleged medical billing hack. Paxton’s true motivation, they contend, is to obtain documents that otherwise wouldn’t be available to him in two other pending cases pitting the state against the nonprofit. Discovery has been halted in both cases.

The records demand arose from an affidavit from PFLAG’s chief executive, Brian Bond, in one of the two cases, the lawyers said. Bond, in a July 2023 affidavit, addressed the forthcoming ban against child gender-affirming care. He discussed “contingency plans” and “alternative avenues of care.”

In court Monday, Bond denied that he was recommending workarounds to let transgender children receive care.

“That’s not what we do,” he said.

During final arguments, PFLAG’s lawyer, Karen Loewy, of Lambda Legal, said a proper investigation must rely on more than the affidavit’s “cherry picked language” or Paxton’s “intuition.”

Relying on Bond’s affidavit to “justify the legitimacy of the investigation is pretty surprising,” she said.

Bond was the first of two witnesses called by PFLAG. The other, former Paxton investigator Sam Weeks, discussed online articles that discussed the loophole around anti-transgender care laws. Weeks however declined to say much more, regularly invoking a privilege granted to investigators as instructed by his lawyer.

The hearing is the first proceeding in the case since March when Meachum issued a temporary injunction blocking the investigation. Her options for this motion include denying or approving the production of records, or approving some but not all. PFLAG and Paxton have separately proposed modifications to the records demand but disagree on what those changes should be.

The hearing comes weeks, if not days, before the Texas Supreme Court announces a decision in a challenge to the Texas child transgender care ban. The high court, which heard the case in January, is expected to issue an opinion by the end of the month. PFLAG is a plaintiff in that case.

PFLAG has 18 Texas chapters totaling 1,600 members. Overall, it has 325,000 members.

PFLAG is represented by Lambda Legal, Arnold & Porter, American Civil Liberties Union, and Transgender Law Center.

The case is PFLAG, Inc. v. Paxton, Tex. Dist. Ct., No. D-1-GN-24-001276, 6/10/24.