Legal Challenges For Texas Muslim Organizations

As the Texas Attorney General, Ken Paxton has been developing a new civil enforcement network against nonprofits through new legal maneuvers and laws in Texas. In his capacity as the chief law enforcement officer of the state, he’s also turned his attention to real estate developers and Islamic organizations.

Paxton has used consumer protection statutes to demand records from organizations his office has accused of legal violations, then sued to revoke their right to operate in Texas when they resisted. The Texas Supreme Court ruled on May 30, 2025, that judges cannot evaluate the truth of his allegations before those quo warranto cases proceed. The 15th Court of Appeals later ruled on October 9, 2025, that targets of Paxton’s investigations must complete months or years of litigation before raising constitutional defenses.

In the past several months, Paxton and his office have been quite busy filing lawsuits against developments with ties to the Islamic community. Two years ago, Paxton sued Colony Ridge, a major residential development, alleging deceptive sales practices and violations of consumer protection laws. On February 10, 2026, the case concluded with a $68 million settlement agreement.

The settlement requires Colony Ridge to pay for infrastructure improvements and build a law enforcement center. It also imposes new buyer identification requirements. Colony Ridge can now only sell properties to buyers who present valid government-issued identification, such as a Texas driver’s license or ID, a passport, or a visa. The settlement does not require the passport to be American. This effectively excludes undocumented immigrants, who typically lack these forms of ID, from purchasing homes in the development.

According to Attorney General Paxton’s statement, some of the $20 million allocated for law enforcement can fund 287(g) agreements. These agreements allow local police officers to perform immigration enforcement functions normally handled by federal Immigration and Customs Enforcement (ICE) agents. Under such agreements, local officers can check immigration status, detain people for ICE, and initiate deportation proceedings.

This arrangement places ICE cooperation infrastructure inside a private residential development. Colony Ridge began as a seller-financed subdivision where people could buy land with minimal documentation. The settlement transforms it into a zone of intensified immigration enforcement, with police officers specifically assigned to the development who can enforce federal immigration law.

In a separate North Texas case, Paxton filed a second lawsuit on February 17, 2026. He targeted Double R Municipal Utility District No. 2A of Hunt and Collin Counties. Paxton accused the district and its board of unlawful actions to support the development now called The Meadow.

The East Plano Islamic Center proposed the development in November 2024. Paxton opened the first investigation in March 2025. He sued the East Plano Islamic Center and Community Capital Partners in December 2025, alleging securities fraud. Paxton specifically alleged the developers sold investment units without verifying buyer accreditation status and without registering the securities under state law. According to the lawsuit, they also misrepresented the project’s location and paid CEO Imran Chaudhary $360,000 through a separate company after he publicly promised to take no salary.

On February 9, 2026, the Attorney General announced an investigation into Sharia City in Kaufman County. The development, planned by a U.S. subsidiary of Dubai-based SEE Holding Company, is designed for 20,000 residents. “There will be no ‘sharia city’ in Texas under my watch,” Attorney General Paxton said in his statement. “While you’re on American soil, you will obey America’s laws.”

Paxton’s investigations have also steered into broader Muslim organizations beyond development or real estate. On February 5, 2026, Paxton filed a lawsuit seeking to shut down the Council on American-Islamic Relations and its Texas chapters. Governor Abbott had previously designated CAIR a foreign terrorist organization and transnational criminal organization on November 18, 2025.

Abbott invoked Senate Bill 1900, a 2023 Texas law that created a state-level foreign terrorist organization category. He also referenced Senate Bill 17, a 2025 law that restricts land purchases by organizations the governor designates as transnational criminal organizations.. The U.S. State Department, which holds exclusive authority under federal law to designate foreign terrorist organizations, does not list either either CAIR or the Muslim Brotherhood as a terrorist designations.

Paxton’s lawsuit asks a Collin County court to affirm Abbott’s state-level designation. If the court agrees, CAIR loses the right to own property, fundraise, or recruit members in Texas. CAIR filed a federal lawsuit against Abbott challenging the designation as a violation of due process and the First Amendment. The federal case remains pending.