The Texas Supreme Court says a company must produce documents in an investigation over whether medical providers used deceptive billing practices to conceal violations that prohibit gender “transition” procedures for minors.
On March 13, the high court reaffirmed the attorney general’s authority to issue civil investigative demands under the Deceptive Trade Practices Act to obtain documents relevant to investigations into potential violations of Texas law.
According to the opinion, an affidavit submitted by PFLAG in related litigation caused the Office of the Attorney General to believe the corporation may have information shedding light on the potential DTPA violations.
Attorney General Ken Paxton issued a CID to obtain documents underlying the affidavit. Rather than produce the requested information, the corporation invoked its statutory right to petition a district court to “modify or set aside the demand, stating good cause.”
“Although this matter could have been handled much like a conventional discovery dispute, it was not,” the opinion states. “It remained pending in the district court for over a year, during which time the corporation’s… petition was used as a way to put the Attorney General’s investigation on trial—rather than as a way to obtain speedy judicial rulings on recognized discovery objections.”
The district court eventually issued a final order broadly protecting the corporation from production of several categories of material, leading Paxton to directly appeal to the Supreme Court.
Justices reversed the district court’s order that blocked enforcement of the CIDs and held that the OAG may obtain relevant documents through a CID when it reasonably believes a person or organization may possess information related to possible violations of the DTPA.
“This is a major victory for the rule of law,” Paxton said. “The Supreme Court of Texas has affirmed that my office has the authority to investigate individuals who are engaging in deceptive trade practices. No one engaging in such unlawful activity will be shielded from my office’s authority to use every legal tool available to uncover the truth and hold them accountable.”
Paxton says the court’s decision reinforces that the attorney general has broad statutory authority to investigate potential deceptive trade practices and that courts should not second-guess reasonable investigative decisions made by the state’s chief law enforcement officer.
The case has been remanded for further proceedings, and PFLAG must produce the responsive documents.
Case No. No. 24-0892
