An Opportunity Lost: Judge Declines Paxton’s Invitation to Tax Exemption Immortality

Ken Paxton’s complaint seeking to run FIEL out of Texas for political speech is 105 pages long.  It raises unavoidable First Amendment issues that both sides acknowledge and brief.  Had it been taken seriously, the litigation might have produced a state court’s interpretation of “substantial lobbying” as that phrase is used to restrict an exempt organization’s speech about legislation.  And the Court would have been required to define the context in which harsh criticism of an incumbent governor or president constitutes improper campaign intervention. 

Because FIEL didn’t wait for election season to call Donald Trump “the devil” and Governor Greg Abbott a “fascist pig” who needs to go.  They said those things consistently, and they even said that if Biden didn’t deliver on his immigration reform promises he could come get some too.  Must an exempt organization refrain altogether from criticizing a sitting politician who is not term limited?  FIEL’s answer and motion to dismiss  is 35 pages long and argues those issues and raised some of their own; “field preemption” and “conflict preemption” precluded a state AG from enforcing IRS 501(c)(3), according to the response.  This whole case coulda produced a groundbreaking opinion and the judge could have been famous! Our great grandchildren woulda been reading that case. 

But the judge probably didn’t want his clerk to work that hard.  It must take a lot of time to bone up on Constitutional Law or Federal Income Tax in separate cases, never mind when those two areas of law intersect in one case.  So the judge took the easy route and dismissed the whole case in one paragraph order.  Here is part of the announcement from MALDEF, the exempt law firm that represented FIEL:

(HOUSTON) – A Texas state judge denied Attorney General Ken Paxton’s attempt to sue a Houston-based non-profit, according to an order entered on Friday.  Today’s ruling prevents Paxton’s proposed lawsuit from moving forward and also denies Paxton’s request for a temporary injunction to shut down the non-profit.

MALDEF (Mexican American Legal Defense and Educational Fund) and Carlos R. Soltero, an Austin-based attorney and member of MALDEF’s board of directors, represent FIEL Houston, a group that works with immigrants and their families. Attorneys were in court last week arguing Paxton had no authority to sue over his claims about FIEL Houston’s federal tax-exempt status, and that Paxton’s actions are in retaliation for FIEL’s advocacy for immigrants.

Friday’s ruling was the third time in two months that a judge has rejected Paxton’s attempts to shut down nonprofit groups with whose content or mission he disagrees.

Paxton’s effort to suppress speech is so obvious that the Judge is on safe ground not taking any of this seriously.  But it sure would have been interesting if he had.

darryll k. jones