A New Legal Terrain For Texas Nonprofits

In February 2026, Texas Attorney General Ken Paxton filed multiple lawsuits against Texas nonprofits in a novel way. Paxton combined old legal tools with new state laws that took effect in January to pressure these organizations without filing criminal charges

In civil cases, the burden of proof is lower than criminal cases, and the Attorney General can dissolve an organization or impose fines up to $200,000 without proving criminal wrongdoing. The main tool is quo warranto, a legal mechanism that allows the state to revoke a nonprofit’s charter if it operates beyond its stated corporate purpose, such as “providing humanitarian aid” or “voter education.” If the Attorney General wins, the nonprofit loses its legal right to exist in Texas.

On May 30, 2025, the Texas Supreme Court made it much easier for the Attorney General to launch these dissolution cases. In Annunciation House v. Paxton, the Court ruled that judges may not examine whether the accusations are true before allowing a quo warranto case to proceed. The Court held that the Attorney General’s own statement about why the organization should be dissolved counts as sufficient grounds to start the case. The Attorney General can launch dissolution proceedings against a nonprofit by simply filing paperwork alleging the organization violated its charter, without proving those claims upfront.

This approach targets 501(c)(3) nonprofits. These organizations are tax-exempt charities under federal law. Federal rules allow them to engage in some advocacy and lobbying, but they cannot make partisan political endorsements their primary activity. Even if a nonprofit follows all federal tax rules, the state can argue that any public advocacy violates the organization’s state charter.

On October 9, 2025, the 15th Court of Appeals applied this strategy for the first time in State v. FIEL Houston. FIEL (Familias, Imigrantes, y Estudiantes en la Lucha) Houston is an immigrant-led that provides voter education programs as part of their civic engagement programming. The Attorney General accused the organization of “openly calling for people to vote against President Donald Trump” and lobbying state lawmakers. The state claimed these activities violated FIEL’s corporate charter.

A trial judge initially dismissed the case on First Amendment grounds. But the 15th Court of Appeals reversed that decision and ordered the trial court to let the case proceed. The appeals court said FIEL’s constitutional defenses came too early in the process. This means the organization must spend months or years in expensive litigation before it can even argue that the First Amendment protects its right to engage in political advocacy.

This marked the first time Texas used quo warranto against a nonprofit for political speech rather than for alleged criminal conduct.

The quo warranto approach allows the Attorney General to target organizations without proving anyone committed a crime. The effectiveness of these civil enforcement mechanisms depends heavily on the 15th Court of Appeals.

The Texas legislature created this court in 2023 under Senate Bill 1045, and it began operations on September 1, 2024. The court has exclusive jurisdiction over all lawsuits involving state agencies and officials. This means that every nonprofit challenging the Attorney General must go through this single court. Before this court existed, organizations could file appeals in any of Texas’s 14 regional appellate courts. Now the state funnels all enforcement litigation through one tribunal with three justices appointed by Governor Abbott on June 11, 2024.

The 15th Court of Appeals has already begun shaping enforcement precedent. The court held that trial judges cannot evaluate evidence or assess the merit of the Attorney General’s allegations when he files a quo warranto petition. The petition only needs to allege wrongdoing on paper. If it does, the case proceeds to full litigation.

The Attorney General gained an additional tool on January 1, 2026, when the Texas Responsible Artificial Intelligence Governance Act (TRAIGA) took effect. This law regulates how organizations use artificial intelligence systems in Texas. When the Attorney General receives a complaint alleging TRAIGA violations, he can issue a Civil Investigative Demand to any person or organization that deploys an AI system in the state.

A Civil Investigative Demand is a formal order requiring the organization to produce documents. The Attorney General can request high-level documentation about the AI system, including its purpose and intended use, what types of training data it uses, what inputs and outputs it processes, how the organization monitors it after deployment, and any other documentation he deems reasonably necessary for the investigation.

This matters for nonprofits because many organizations now use AI-enabled systems to process information and coordinate operations. Under TRAIGA, if the Attorney General receives a complaint about how an organization uses such systems, he can demand access to documentation that reveals operational details.

The law establishes significant penalties. Violations carry civil fines from $10,000 to $200,000 per violation. If an organization fails to cure a violation, it faces additional fines of $2,000 to $40,000 per day for each day the violation continues.

Several nonprofits have responded to these legal pressures by restructuring their corporate structures. The humanitarian group Team Brownsville officially dissolved its Texas nonprofit corporation on January 1, 2026, and moved its operations under the fiscal sponsorship of Grannies Respond, a New York-based organization. This removed the organization from the Attorney General’s quo warranto authority.

The Catholic shelter Annunciation House in El Paso faces similar pressure. After the Texas Supreme Court’s May 30, 2025, decision, the state gained the right to inspect the organization’s documentation as part of its quo warranto investigation.

Not all of the Attorney General’s enforcement efforts have succeeded. On December 30, 2025, the 15th Court of Appeals ruled against Paxton’s attempt to impose administrative reporting requirements on district attorneys in major cities. The court found he lacked statutory authority to require prosecutors to submit extensive case data, internal policies, and confidential victim information to his office.