AG Ken Paxton urges appeals court to dismiss whistleblower lawsuit against him

A lawyer for Texas Attorney General Ken Paxton, arguing Wednesday before a state appeals court, insisted that Paxton cannot be sued by four former high-ranking officials who were fired after accusing him of accepting bribes and related crimes.

The Austin-based 3rd Court of Appeals will decide whether a whistleblower lawsuit by the former officials, who say they were improperly fired last year in retaliation for reporting the allegations, can move forward.

The Texas Whistleblower Act is intended to protect public employees from on-the-job retaliation after making a credible report of criminal acts to the appropriate investigators.

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But Solicitor General Judd Stone II, Paxton's top appellate lawyer, argued Wednesday that the lawsuit must be dismissed because Paxton is immune to complaints by whistleblowing employees.

"The Whistleblower Act waives immunity for claims based on reports regarding only public employees, appointed officials or an employing governmental entity. But the attorney general, Ken Paxton, is none of these," Stone told the court. "He's an elected official."

State law does not allow whistleblower lawsuits against any elected official, from statewide leaders to school board members, Stone argued, adding that officials face other "powerful checks on misconduct," including impeachment, unfavorable press reports and removal by voters.

A lawyer for the fired officials, Joseph Knight, urged the appeals court not to adopt such a "gaping exception," arguing that exempting all elected officials from whistleblower lawsuits has never been recognized since the Whistleblower Act became law three decades ago.

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In addition, Knight said, Paxton is the chief policymaker for his agency, so his actions amounted to the actions of the attorney general's office — and governmental entities can be sued under the act.

"Every act we complain about here is one Mr. Paxton took in his official capacity as the attorney general," Knight told the court. "We're not complaining about something Mr. Paxton did on his own time, in the privacy of his own home."

Paxton turned to the 3rd Court of Appeals after a district judge in Austin declined his request to toss out the lawsuit in March.

Wednesday's arguments were the first held in person at the 3rd Court since the pandemic began, with proceedings streamed on the court's YouTube channel because audience seating was limited as a safety precaution.

All three justices on the court's panel are Democrats — Chief Justice Darlene Byrne and Justices Gisela Triana and Chari Kelly. They have no deadline to render a decision, which can be appealed to the Texas Supreme Court, where all eight members are Republicans, with one vacancy.

Paxton accused of misconduct

In late September 2020, eight high-ranking officials approached the FBI, Texas Rangers and Travis County district attorney’s office to accuse Paxton of criminal conduct on behalf of Austin real estate investor Nate Paul.

All eight resigned or were fired within two months. Four sued under the Whistleblower Act, arguing that their long legal and law enforcement experience reinforced their conclusion that Paxton was breaking the law:

• James Blake Brickman, fired Oct. 20, was the deputy attorney general for policy and strategic initiatives.

• David Maxwell, fired Nov. 2, was director of the agency's law enforcement division after 38 years with the Texas Department of Public Safety, including 24 years as a Texas Ranger.

• Mark Penley, a former federal prosecutor, was the deputy attorney general for criminal justice until he was fired Nov. 2.

• Ryan Vassar was the deputy attorney general for legal counsel, serving as the agency's top legal officer until he was fired Nov. 17.

The whistleblower lawsuit alleges that Paxton illegally used his office in 2019 and 2020 to help Paul in exchange for benefits that included remodeling Paxton's Austin home, employing Paxton's mistress and receiving a $25,000 political donation.

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Paul had approached the attorney general's office with a complaint that state and federal investigators improperly searched his home and businesses in 2019.

Paxton has defended his actions as appropriate, saying Paul's allegations were serious and deserved to be investigated. He also described the whistleblowers as "rogue employees" who sought to stymie that investigation.

The allegations against Paxton

The whistleblower lawsuit made four central allegations against Paxton:

• That he improperly intervened in an open records request by Paul, who wanted access to an unredacted FBI document and state investigative records, despite Paxton having "never personally involved himself in any of the 30,000-40,000 open records decisions OAG issues each year," the lawsuit said.

• That he intervened in a dispute between Paul and a charitable trust after his agency had declined to get involved.

• That he pushed for an unusually rapid legal opinion, issued at 2 a.m. on a Sunday in August 2020, limiting public foreclosure sales due to the pandemic — days before one of Paul's properties was scheduled for a foreclosure sale.

• That he overruled Maxwell and Penley, who had concluded that Paul's allegations of misconduct by investigators lacked merit, to hire an outside lawyer to dig into Paul's claims.

The lawsuit accused Paxon of crimes including bribery, perjury, falsification of government records, abuse of office and obstruction of criminal investigations.

Last month, the attorney general's office issued an unsigned report that said an internal investigation into some of the allegations concluded that Paxton broke no laws in official actions related to Paul.