The opinion
Case: 24-50984 Document: 123-1 Page: 1 Date Filed: 06/26/2025
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
____________ Fifth Circuit
FILED
No. 24-50984 June 26, 2025
____________
Lyle W. Cayce
Clerk
Spirit Aerosystems, Incorporated,
Plaintiff—Appellee,
versus
W. Kenneth Paxton, in his official capacity as Attorney General of
Texas,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:24-CV-472
______________________________
Before Davis, Higginson, and Douglas, Circuit Judges.
Stephen A. Higginson, Circuit Judge:
Defendant-Appellant W. Kenneth Paxton, the Attorney General of
Texas, issued a Request to Examine (“RTE”) to Plaintiff-Appellee Spirit
AeroSystems (“Spirit”), a manufacturer of airplane parts. Penalties for
noncompliance with an RTE can include revocation of the business’s
registration or certificate of formation and a Class B misdemeanor charge for
the managerial officer refusing compliance, but the authorizing statute does
not provide an opportunity for precompliance judicial review.
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Spirit challenges the RTE statute as facially unconstitutional because
its failure to provide an opportunity for precompliance review violates City of
Los Angeles v. Patel, 576 U.S. 409 (2015). The district court agreed and issued
a permanent injunction enjoining the Attorney General from attempting to
enforce any of the RTEs issued to Spirit or issuing new RTEs to Spirit.
Because the RTE statute itself does not provide for precompliance review
and the statute’s “immediacy” requirement precludes precompliance
review in violation of the Fourth Amendment, the district court’s reasoning
was correct at the time of judgment. In the period between the district court’s
decision and the disposition of this appeal, the Texas Supreme Court issued
Paxton v. Annunciation House, Inc., No. 24-0573, 2025 WL 1536224 (Tex.
May 30, 2025), which read into the statute the required opportunity for
precompliance review. 1 We thus VACATE the district court’s judgment
and REMAND for further proceedings consistent with Annunciation
House. 2
I.
The Texas Business Organizations Code contains a century-old
Request to Examine statute, which today provides in relevant part: “To
examine the business of a filing entity or foreign filing entity, the attorney
general shall make a written request to a managerial official, who shall
immediately permit the attorney general to inspect, examine, and make
copies of the records of the entity.” Tex. Bus. Orgs. Code § 12.152.
The Texas Attorney General may use the RTE statute to investigate whether
_____________________
1 Although the Annunciation House case was pending before the Texas
Supreme Court during this appeal, neither party requested that we wait for the
outcome of that case or certify this case to the Texas Supreme Court, even when
asked at oral argument.
2 This decision also resolves the parties’ joint motion to vacate and remand.
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an “entity has been or is engaged in acts or conduct in violation of: (1) its
governing documents; or (2) any law of [Texas].” Id. § 12.153. “A record of
the entity includes minutes and a book, account, letter, memorandum,
document, check, voucher, telegram, constitution, and bylaw.” Id. § 12.151.
Texas state courts have described a materially similar version of the
RTE statute as a “visitorial statute[],” Walker-Texas Inv. Corp. v. State, 323
S.W.2d 603, 606 (Tex. Civ. App. 1959) (quoting Humble Oil & Refin. Co. v.
Daniel, 259 S.W.2d 580, 589 (Tex. Civ. App. 1953), cert. denied, 347 U.S. 936
(1954)), that “give[s] the Attorney General an unlimited and unrestricted
right of visitation and examination of the books and records of the
corporation,” Humble Oil, 259 S.W.2d at 589. If a corporation’s managerial
officer refuses to permit the Attorney General’s visitation or examination,
the officer commits a Class B misdemeanor, punishable by up to 180 days in
jail. Tex. Bus. Orgs. Code § 12.156; Tex. Penal Code § 12.22.
However, the RTE statute does not provide an opportunity for
precompliance judicial review. 3
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3 Although the Attorney General repeatedly refers to Requests to Examine
as “subpoenas,” RTEs are not statutory administrative subpoenas. Administrative
subpoenas are referred to as subpoenas in the relevant statutes, see Tex. Gov’t
Code § 422.003, and can only be issued subject to an underlying court proceeding
with proof of service, Tex. R. Civ. P. 176.1, 176.5. The RTE statute uses the
term “Request to Examine” and does not use the term “subpoena,” nor has the
Texas Supreme Court used the term to describe RTEs. Compare Annunciation
House, 2025 WL 1536224, at *1 (referring to the underlying RTE as a “record
request”), and Tex. Bus. Orgs. Code §§ 12.151–12.156, with Tex. Gov’t
Code § 422.003 (authorizing “administrative subpoenas to investigate and
prosecute offenses that involve the Internet-based sexual exploitation of a minor”),
and Tex. Occ. Code § 153.007 (permitting the Texas Medical Board to issue a
“subpoena”). Indeed, the word “subpoena” does not appear anywhere in Chapter
12 of the Texas Business Organizations Code. We therefore refer to Requests to
Examine as RTEs, rather than subpoenas, as do the Texas court decisions relied on
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Spirit is headquartered in Wichita, Kansas and incorporated in
Delaware. Among other products, Spirit manufactures the fuselages for
Boeing 737 airplanes. Spirit has one facility in Texas, near the Dallas Love
Field Airport, and is registered as a foreign filing entity under the Texas
Business Organizations Code. Tex. Bus. Orgs. Code § 9.001.
On March 28, 2024, the Attorney General of Texas announced an
investigation of alleged “manufacturing defects” and “concerning or
dangerous incidents” involving Boeing 737 planes. The Attorney General
issued an RTE to Spirit AeroSystems Holdings, Inc. (“Spirit Holdings”)—
Spirit’s parent company, which is not itself a Texas foreign filing entity—
primarily seeking documents related to Spirit’s fuselage manufacturing,
diversity initiatives, employee information, compensation plans, inspection
procedures, and disclosures to investors. 4 The RTE included a
“NOTICE” that warned, “a foreign filing entity or filing entity that fails or
refuses to permit the Attorney General to examine or make copies of a record,
without regard to whether the record is located in this state, forfeits the right
of the entity to do business in this state, and the entity’s registration or
certificate of formation shall be revoked or terminated.” It further advised
that “a managerial official or other individual having the authority to manage
_____________________
by the Attorney General. See, e.g., Humble Oil, 259 S.W.2d at 583 (referring to an
RTE as a “letter of request” and never using the term subpoena).
4 The Cato Institute participated in this case as an amicus in support of
Spirit and warns that the RTE in this case has impermissible “extraterritorial
reach” because Spirit “is incorporated in Delaware and headquartered in Kansas.”
The amicus argues that some RTEs may even attempt to “punish a defendant for
conduct that may have been lawful where it occurred.” State Farm Mut. Auto. Ins.
Co. v. Campbell, 538 U.S. 408, 421 (2003). While questions of jurisdictional reach
may arise in as-applied challenges, the case before us presents a facial challenge and
thus we do not reach the issue.
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the affairs of a filing entity or foreign filing entity commits an offense if the
official or individual fails or refuses to permit the Attorney General to make
an investigation of the entity or to examine or to make copies of a record of
the entity. An offense under this section is a Class B misdemeanor.”
The Attorney General initially gave Spirit Holdings until April 17,
2024, to produce all responsive documents; the production deadline was
later extended to April 30. On April 29, the Attorney General indicated that
it would sign a stipulation to extend the response date to allow Spirit to file
this suit and to allow the parties to file cross-motions for summary judgment.
The parties entered into the stipulation on May 1, 2024, and on the same day
Spirit filed its complaint against W. Kenneth Paxton and Jane Nelson in their
official capacities as Texas Attorney General and Secretary of State,
respectively. 5 On May 13, 2024, the Attorney General rescinded the prior
RTE and issued a revised RTE which stated:
If you cannot reach agreement with the Office of the
Attorney General on the scope of documents sought, you may
attempt to obtain judicial review of the RTE before June 3,
2023 [sic] through a “suit for a declaratory judgment,” Humble
Oil & Refining Company v. Daniel 259 S.W.2d 580, 588 (Tex.
App.—Beaumont 1953) (writ ref’d N.R.E.), or a suit for
injunctive relief, City of Elsa v. M.A.L., 226 S.W.3d 390, 392
(Tex. 2007).
In such a suit, the Office of the Attorney General will
not dispute the availability of judicial review.
The parties cross-moved for summary judgment. After a hearing, the
magistrate judge issued a report and recommendation recommending
_____________________
5 The Notice of Appeal in this case was filed by the Attorney General and
did not include the Secretary of State.
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granting Spirit’s motion for summary judgment and denying the Attorney
General’s. Applying City of Los Angeles v. Patel, 576 U.S. 409 (2015), the
magistrate judge recommended declaring the RTE statute facially
unconstitutional on two bases: first, that the “RTE statute requires an
entity’s managerial official to ‘immediately permit’ the Attorney General
access to the entity’s records,” and second, that the “RTE [s]tatute . . . lacks
any mechanism that would allow a [corporation] to seek precompliance
review of the reasonableness of a Request to Examine.” The Attorney
General filed objections to the report and recommendation, including raising
a standing objection for the first time. On de novo review, the district court
overruled the Attorney General’s objections and adopted the report and
recommendation. The district court entered a permanent injunction
enjoining the Attorney General from attempting to enforce any of the RTEs
issued to Spirit or issuing new RTEs to Spirit.
II.
A grant of summary judgment is reviewed de novo. Nickell v. Beau
View of Biloxi, LLC, 636 F.3d 752, 754 (5th Cir. 2011). Summary judgment is
proper “if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). “[W]here the non-movant bears the burden of proof
at trial, the movant may merely point to an absence of evidence,” which
“shift[s] to the non-movant the burden of demonstrating by competent
summary judgment proof that there is an issue of material fact warranting
trial.” Lindsey v. Sears Roebuck & Co., 16 F.3d 616, 618 (5th Cir. 1994). “The
nonmovant cannot satisfy this burden merely by denying the allegations in
the opponent’s pleadings but can do so by tendering depositions, affidavits,
and other competent evidence to buttress its claim.” Donaghey v. Ocean
Drilling & Expl. Co., 974 F.2d 646, 649 (5th Cir. 1992). “When assessing
whether a dispute to any material fact exists, we consider all of the evidence
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in the record but refrain from making credibility determinations or weighing
the evidence.” Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th
Cir. 2007).
A trial court’s grant of a permanent injunction is reviewed for abuse
of discretion. BNSF Ry. Co. v. Int’l Ass’n of Sheet Metal, Air, Rail & Transp.
Workers – Transp. Div., 973 F.3d 326, 333 (5th Cir. 2020); see Scott v. Schedler,
826 F.3d 207 (5th Cir. 2016). The district court abuses its discretion if it
“(1) relies on clearly erroneous factual findings when deciding to grant or
deny the permanent injunction, (2) relies on erroneous conclusions of law
when deciding to grant or deny the permanent injunction, or (3) misapplies
the factual or legal conclusions when fashioning its injunctive relief.” BNSF
Ry. Co., 973 F.3d at 333–34 (quoting M. D. ex rel. Stukenberg v. Abbott, 907
F.3d 237, 248 (5th Cir. 2018)). We “review de novo any questions of law
underlying the decision.” Id. at 334.
III.
As a threshold matter, the Attorney General argues that Spirit “has
no standing” because “Spirit was not subject to a demand for immediate
compliance—it was given ‘three weeks.’” He contends that “Spirit’s
standing is limited to challenging the RTE subpoena it received, and any
allegedly-illegal features of the statute that are present in that subpoena. It
does not have standing to challenge provisions, such as the ‘immediate’
compliance one, that do not affect it.” Spirit responds that it does not
challenge each provision of the statute separately; it instead challenges the
unconstitutionality of three provisions, which in combination prevent
precompliance reasonableness review: a lack of any waiver of the Attorney
General’s sovereign immunity from a lawsuit seeking reasonableness review,
a lack of substantive reasonableness limitations for courts to apply, and
immediacy.
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The operative May 13 RTE did not provide any deferred time for
compliance—it merely stated, “[i]f you cannot reach agreement with the
Office of the Attorney General on the scope of documents sought, you may
attempt to obtain judicial review of the RTE before June 3, 2023 [sic].” A
sworn declaration offered by Spirit states that “the [Office of the Attorney
General] refused to agree to a stipulation that would indefinitely stay
enforcement of the Request to Examine pending completion of this
litigation.” The Attorney General does not contest this, even though he
acknowledged before the district court, and again before us at oral argument,
that “immediate compliance . . . [can’t] be constitutionally demanded” in
“mine-run” cases. See Oral Arg. 48:15. Further muddying the waters, the
Attorney General has argued in unrelated RTE litigation that the RTE
statute requires “a registered entity ‘[to] immediately permit the attorney
general to inspect, examine, and make copies of [its] records.’” Annunciation
House, Inc. v. Paxton, No. 2024DCV0616, Index No. 12 at 4 (205th Jud. Dist.,
El Paso Cnty., Feb. 16, 2024). In that same litigation, the Attorney General
described allowance of any later compliance as “a matter of grace,” sought
to dissolve a business entity that had filed for judicial review within the
provided “grace” period, and obtained a temporary restraining order. Such
an interpretation is in keeping with the RTE statute, which expressly
requires “immediate[]” compliance and does not provide for any deferred
compliance mechanism. Tex. Bus. Orgs. Code § 12.152.
Our court has recognized that where a governmental authority
“concedes that it may” enforce a particular provision, “plaintiffs have
standing in the face of . . . prosecutorial indecision.” Franciscan All., Inc. v.
Becerra, 47 F.4th 368, 376 (5th Cir. 2022). This is the classic case of
prosecutorial indecision—the Attorney General is seeking to benefit from his
grant of “grace” to Spirit while retaining the right to, at any point during the
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pending litigation, impose consequences on Spirit for failure to comply with
an immediacy provision he concedes is unconstitutional. Spirit has standing.
IV.
The Fourth Amendment “safeguard[s] the privacy and security of
individuals against arbitrary invasions by governmental officials.” Camara v.
Mun. Ct. of City & Cnty. of S.F., 387 U.S. 523, 528 (1967). In 1967, the
Supreme Court began “re-examin[ing] whether administrative inspection
programs, as presently authorized and conducted, violate Fourth
Amendment rights as those rights are enforced against the States through the
Fourteenth Amendment.” Id. at 525. Overruling precedent authorizing
warrantless administrative searches, the Court in Camara and See v. City of
Seattle, 387 U.S. 541 (1967), held that the target of an administrative housing
inspector “had a constitutional right to insist that the inspectors obtain a
warrant to search,” Camara, 387 U.S. at 540, and that “the basic component
of a reasonable search under the Fourth Amendment—that it not be enforced
without a suitable warrant procedure—is applicable . . . to business as well as
to residential premises,” See, 387 U.S. at 546.
Almost a half-century later, in City of Los Angeles v. Patel, respondent
motel owners “brought a Fourth Amendment challenge to a provision of the
Los Angeles Municipal Code that compel[led] ‘[e]very operator of a hotel to
keep a record’ containing specified information concerning guests and to
make this record ‘available to any officer of the Los Angeles Police
Department for inspection’ on demand.” 576 U.S. at 412 (quoting Los
Angeles Mun. Code §§ 41.49(2), (3)(a), (4) (2015)) (second alteration
in original). Failure to make the records available for inspection was “a
misdemeanor punishable by up to six months in jail and a $1,000 fine.” Id. at
413. Applying Camara and See, the Supreme Court held that the respondents
could bring facial challenges to a statute under the Fourth Amendment, and
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that the statute in question violated the Fourth Amendment because it
offered no opportunity for precompliance review. The Attorney General
challenges the applicability of both holdings to this case.
A.
The Attorney General argues that Spirit cannot sustain a facial
challenge to the RTE statute because “[t]he statutory grant for the Attorney
General to seek ‘immediate’ compliance cannot plausibly show
unconstitutionality in all applications because the Attorney General almost
always provides subpoena recipients weeks to comply.” This reasoning runs
contrary to the Supreme Court’s holding in Patel, which explained that the
test for facial challenges considers only applications where the statute
actually authorizes the conduct, not those where the statute does no work:
[W]hen assessing whether a statute [is unconstitutional
in all of its applications], the Court has considered only
applications of the statute in which it actually authorizes or
prohibits conduct. . . .
. . . [W]hen addressing a facial challenge to a statute
authorizing warrantless searches, the proper focus of the
constitutional inquiry is searches that the law actually
authorizes, not those for which it is irrelevant. If exigency or a
warrant justifies an officer’s search, the subject of the search
must permit it to proceed irrespective of whether it is
authorized by statute. Statutes authorizing warrantless
searches also do no work where the subject of a search has
consented. Accordingly, the constitutional “applications” that
petitioner claims prevent facial relief here are irrelevant to our
analysis because they do not involve actual applications of the
statute.
Patel, 576 U.S. at 418–19. Taking the example of Planned Parenthood of
Southeastern Pa. v. Casey, 505 U.S. 833 (1992), the Court in Patel explained
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that a facial challenge could be maintained to a statute requiring spousal
notification prior to abortion even though some women did not face an undue
burden because they would have notified their husbands regardless of the
statute. Patel, 576 U.S. at 418. “Legislation is measured for consistency with
the Constitution by its impact on those whose conduct it affects. . . . The
proper focus of constitutional inquiry is the group for whom the law is a
restriction, not the group for whom the law is irrelevant.” Casey, 505 U.S. at
894.
Just as in Patel and Casey, the facial challenge here must be evaluated
based on the applications where the statute is actually relevant, not to those
where the Attorney General chooses not to use the statutory framework. In
Patel, the City of Los Angeles could have, in practice, chosen only to use its
statute in cases where a warrant could also have been obtained; this use of
discretion would not have rendered the statute itself constitutional. Here, the
allegedly constitutional applications where the Attorney General gives extra
time to comply are discretionary and outside of the statute. As the Supreme
Court has instructed, these applications are thus “irrelevant” because they
are not “actual applications of the statute” and so the statute “do[es] no
work.” Patel, 576 U.S. at 419.
At oral argument, the Attorney General pressed that if he only sought
an injunction to enforce an RTE, that would be a constitutional application
of the RTE statute. Oral Arg. 00:20. But this pure injunction remedy does
not arise from the RTE statute, which only provides two remedies for
noncompliance: forfeiture of business privileges, Tex. Bus. Orgs. Code
§ 12.155, and criminal penalties, id. § 12.156. The injunction instead arises
from a different section of the “Administrative Powers” chapter of the
Business Organizations Code, § 12.259, which provides that “[t]he state has
a right to a writ of attachment, garnishment, sequestration, or injunction,
without bond, to aid in the enforcement of the state’s rights created by this
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chapter.” It does not appear that the Attorney General raised this argument
before the district court. Chevron USA, Inc. v. Aker Mar. Inc., 689 F.3d 497,
503 (5th Cir. 2012) (“Arguments not raised in district court will not be
considered absent ‘extraordinary circumstances.’” (quoting N. Alamo Water
Supply Corp. v. City of San Juan, 90 F.3d 910, 916 (5th Cir. 1996), overruled
in part on other grounds by Green Valley Special Util. Dist. v. City of Schertz, 969
F.3d 460 (5th Cir. 2020))). Regardless, as Spirit notes, the Attorney
General’s grant of extra time to comply with the statute or seeking of an
injunction under § 12.259 does not fix the core constitutional complaint: that
the Attorney General can, at any time and without completion of
precompliance review, apply penalties for failure to comply. It is entirely
within the Attorney General’s discretion to provide twenty days to comply,
or to seek an injunction for compliance, and the next day revoke a company’s
business license and pursue criminal penalties. The Attorney General’s
litigation position in this case not to enforce the statute does not create a
constitutional application of the statute on its face.
Finally, even if a plaintiff manages to obtain judicial relief from an
RTE, the Attorney General can still seek penalties. A stark example can be
seen in the history of the Texas state court case Annunciation House. On
February 7, 2024—seven weeks prior to the RTE at issue here—the
Attorney General served an RTE on Annunciation House, Inc., a non-profit
entity that is organized under Texas law and registered to do business in the
state. The RTE provided one day to comply. Within this one-day period,
Annunciation House filed suit seeking a temporary restraining order against
the Attorney General, which the 205th Judicial District in El Paso granted.
Annunciation House, Inc. v. Paxton, No. 2024DCV0616, Index No. 3 (205th
Judicial Dist., El Paso Cty., Feb. 8, 2024). The Attorney General then filed a
counterclaim “seeking judicial relief to revoke [Annunciation House’s]
registration to conduct business in Texas, for an injunction against its
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continued operation, and for appointment of a receiver.” In his counterclaim,
the Attorney General argued that his “power to demand access to a
corporation’s records ‘immediately’ is . . . historically well-established,” and
that “[t]he consequences for failure to give [the Office of the Attorney
General] immediate access to records are also textually plain.” The Attorney
General cited to the provisions of Texas Business Organizations Code §
12.155, claiming they provided authority to dismantle Annunciation House
for failure to comply with the RTE after one day, and added that the
provision of a single day to respond to the RTE was a “matter of grace.” It
is evident from the Attorney General’s own litigation positions that his grant
of extra time does not itself cure the allegedly unconstitutional conduct.
Spirit can sustain a facial challenge to the RTE statute.
B.
The Los Angeles ordinance at issue in Patel “create[d] an intolerable
risk that searches authorized by it will exceed statutory limits, or be used as a
pretext to harass hotel operators and their guests” because a “hotel owner
who refuses to give an officer access to his or her registry [could] be arrested
on the spot.” Patel, 576 U.S. at 421. For the ordinance to become
constitutional, it required an “opportunity to obtain precompliance review
before a neutral decisionmaker” “absent consent, exigent circumstances, or
the like[.]” Id. at 420. The Court explained that:
[T]his opportunity [for review] can be provided without
imposing onerous burdens on those charged with an
administrative scheme’s enforcement. For instance,
respondents accept that the searches authorized by
§ 41.49(3)(a) would be constitutional if they were performed
pursuant to an administrative subpoena. . . .
In those instances, however, where a subpoenaed hotel
operator believes that an attempted search is motivated by
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illicit purposes, respondents suggest it would be sufficient if he
or she could move to quash the subpoena before any search
takes place. A neutral decisionmaker, including an
administrative law judge, would then review the subpoenaed
party’s objections before deciding whether the subpoena is
enforceable. Given the limited grounds on which a motion to
quash can be granted, such challenges will likely be rare.
Id. at 421–22 (internal citations omitted). A party is “sufficiently protected
by the opportunity to ‘question the reasonableness of the subpoena, before
suffering any penalties for refusing to comply.’” Id. at 420 (quoting Donovan
v. Lone Steer, Inc., 464 U.S. 408, 415 (1984)). A government actor “may issue
an administrative subpoena without a warrant” only if the subpoena recipient
can “question the reasonableness of the subpoena, before suffering any
penalties for refusing to comply with it, by raising objections in an action in
district court.” Donovan, 464 U.S. at 415.
The RTE statute itself provides no mechanism for precompliance
review and provides no internal standard for evaluating reasonableness that
a court can use to comply with Patel. 6 The Attorney General offers three
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6 The Attorney General argues that Patel and its progeny are “materially
distinguishable” from this matter because the City of Los Angeles in Patel claimed
that “precompliance review would destroy the whole purpose of its law.” The
Attorney General claims that because he “admits (indeed, embraces) the
proposition that RTE subpoena recipients may enjoy review before suffering
penalties,” this could “alter[] or even eliminate[] the federal constitutional
question.” This argument fails on two grounds. First, the Attorney General’s mere
assertion that Spirit and other RTE recipients “may enjoy” judicial review is not
legally binding—indeed, the Attorney General only agreed to allow Spirit to seek
judicial review after this case was already filed in district court. And the Attorney
General in quo warranto proceedings challenging the Annunciation House RTE
has argued that he is “immune from suit.” The Attorney General’s inconsistent
views on judicial review prevent his “admission” from controlling the present case.
His argument that a mere representation to the court can eliminate a constitutional
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reasons why precompliance review is still available to recipients of RTEs:
that “[t]here is abundant Texas appeals court precedent conducting merits
review of RTE subpoenas”; that an RTE recipient is “guaranteed judicial
review whenever it decides not to comply with an RTE subpoena” because
the Attorney General must initiate judicial proceedings to impose penalties
on a noncompliant recipient; and that “modern Texas procedural doctrine”
allows Spirit to bring an “ultra vires suit for injunctive relief” or a “petition
for [a] protective order under the Texas Rules of Civil Procedure.” Only the
final opportunity for precompliance review comports with Patel’s
requirements.
1.
The Attorney General first points to Humble Oil, 259 S.W.2d 580,
Chesterfield Finance Company v. Wilson, 328 S.W.2d 479 (Tex. Civ. App.
1959), and Walker-Texas, 323 S.W.2d 603, as examples of precompliance
review under the RTE statute. But none of these cases concerns the
availability of precompliance review of an RTE. In Humble Oil, the Texas
appeals court stated its “belie[f] that the visitorial statutes . . . are not in
violation of the constitutional inhibitions against unreasonable searches and
seizures.” 259 S.W.2d at 589. However, it concluded that the visitorial
statutes limited the use of copying and seizing records “to the use of copies
of such records to be used as evidence in suits involving the violation of the
corporation’s charter rights and privileges, or violations of the regulatory
_____________________
question is also unavailing. The sole case he cites for this proposition concerns
“exceptional circumstances justifying the district court’s assumption of
jurisdiction” in a Pullman abstention context, Word of Faith World Outreach v.
Morales, 986 F.2d 962, 696 (5th Cir. 1993) (quotation marks omitted), not whether
a statute’s alleged facial unconstitutionality can be cured by an Attorney General’s
exercise of discretion.
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provisions of some statute enacted for the purpose of controlling and
regulating such corporations or violations of some penal statute.” Id. at 589–
90. The court in Humble Oil also held that the visitorial statutes provide the
Attorney General with “the full and unlimited and unrestricted right to
examination of the corporation’s books and records at any time and as often
as he may deem necessary.” Id. at 589. Taken at its literal meaning, Humble
Oil’s interpretation of the statute as allowing “unlimited and unrestricted”
examination “at any time” cuts against finding that the RTE statute
comports with Patel’s requirement of an opportunity for precompliance
review by a neutral decisionmaker. Finally, the proceedings in Humble Oil
took place after the plaintiff complied with an RTE under threat that failure
to comply immediately would lead to “quo warranto proceedings . . . to
forfeit its charter.” Id. at 582–83. These were not precompliance
proceedings.
Similarly, Chesterfield involved a question of whether the Attorney
General could “mak[e] copies of appellants’ records for use in suits to enjoin
violations of the usury laws,” 328 S.W.2d at 483, not precompliance review.
And Walker-Texas concerned whether a business owner was required to
permit immediate inspection when the Attorney General did not personally
sign the RTE letter. 323 S.W.2d at 605–06. In fact, the proceeding in Walker-
Texas was brought by the state, which sought dissolution of the corporate
charter under the RTE statute for not immediately complying with the letter
of visitation. None of these cases examines whether precompliance review is
available as a matter of statutory interpretation or judicial procedure.
Even if the Texas courts had examined the constitutionality of the
statute vis-à-vis precompliance review in these 1950s decisions, all three
cases were decided well before Patel and therefore, to the extent any is
inconsistent with Patel, it is superseded by Patel’s Fourth Amendment
analysis. Gahagan v. U.S. Citizenship & Immigr. Servs., 911 F.3d 298, 302 (5th
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Cir. 2018) (explaining that “precedent is implicitly overruled if a subsequent
Supreme Court opinion establishes a rule of law inconsistent with that
precedent” (cleaned up)). Moreover, Humble Oil, Chesterfield, and Walker-
Texas were decided a decade before Camara, which established Fourth
Amendment protections for targets of administrative searches. 387 U.S. 523
(1967).
2.
The Attorney General claims that “an RTE subpoena recipient is
guaranteed judicial review whenever it decides not to comply with an RTE
subpoena, regardless of whether it took advantage of the [other] pathways.”
“That is because the Attorney General has only two possible remedies for
non-compliance”—an injunction compelling compliance and a charter
forfeiture proceeding—and both “guarantee judicial review before a penalty
may be imposed.” According to the Attorney General, Patel defines
“precompliance review” as review “prior to suffering penalties,” and thus
proceedings to impose noncompliance penalties satisfy the Fourth
Amendment.
From a logical standpoint, the Attorney General’s position that
penalty proceedings constitute precompliance proceedings is troubling,
because a recipient who loses their challenge to an RTE is then immediately
subjected to penalties, without having the opportunity to comply after a court
determination. In See v. City of Seattle, the Court explained that, under the
Fourth Amendment, a party must have the opportunity to “obtain judicial
review of the reasonableness of the demand prior to suffering penalties for
refusing to comply.” 387 U.S. at 545. On the same day, in Camara, the Court
rejected a regime where “only by refusing entry and risking a criminal
conviction can the occupant at present challenge the inspector’s decision to
search.” 387 U.S. at 532. Taken together, “precompliance” encompasses
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everything before a recipient chooses whether or not to comply—after that
point, the RTE is satisfied, or penalties begin. A penalty-related suit
therefore occurs after a compliance choice is made; an RTE recipient in a
penalty suit does not have the benefit of precompliance review in choosing
whether to comply.
Without citing any authority, the Attorney General argues that it is
perfectly reasonable under the Fourth Amendment to “force[] RTE
subpoena recipients to put skin in the game if they refuse to comply with the
subpoena and opt to litigate its validity in a defensive posture.” But the
Fourth Amendment does not require search targets “to put skin in the
game,” and such a requirement would be incompatible with the Fourth
Amendment. In fact, in Zadeh v. Robinson, we applied Patel’s precompliance
requirement to find “a violation of [plaintiff’s] constitutional rights” when a
Texas administrative agency threatened to de-license a subpoenaed doctor if
subpoenaed records were not provided immediately. 928 F.3d 457, 464, 468
(5th Cir. 2019); see also Cotropia v. Chapman, 978 F.3d 282, 287 (5th Cir.
2020) (“Chapman . . . violated Cotropia’s constitutional rights when she
copied documents in Cotropia’s office without any precompliance review of
the administrative subpoena.”). Requiring Zadeh to enter de-licensing
procedures or a company to enter business revocation proceedings to obtain
review would have a chilling effect—businesses would be forced to comply
with unconstitutional RTEs because they could not afford dissolution as the
price of going to court. The Court in Camara explicitly rejected such a
regime. See Camara, 387 U.S. at 532.
Further, although the Attorney General disavows his ability to initiate
a criminal prosecution under the RTE statute on the basis that Texas state
law limits that power to district attorneys, he and his staff do have the ability
to make arrests for refusal to comply. See Tex. Code Crim. Pro. §
14.01(b) (“A peace officer may arrest an offender without a warrant for any
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offense committed in his presence or within his view.”); id. § 2.12(22)
(“peace officers” include “[i]nvestigators commissioned by the attorney
general”). Such an arrest is authorized by Texas state law, including the
RTE statute, and would prevent any pre-penalty review for recipients who
refuse to comply. This is the scheme that the Court in Patel rejected as
“creat[ing] an intolerable risk that searches authorized by it will exceed
statutory limits, or be used as a pretext to harass.” 576 U.S. at 421. A
“precompliance” regime where a recipient can only challenge the RTE by
risking penalties is not a precompliance regime at all.
3.
Finally, the Attorney General argues that “modern Texas procedural
doctrine gives Spirit at least two crystal clear pathways to precompliance
review: (1) An ultra vires suit for injunctive relief; or (2) a petition for
protective order under the Texas Rules of Civil Procedure.”
We need not examine whether an ultra vires suit provides such a
pathway because the second basis for precompliance review has, while this
case was pending, been validated by the Texas Supreme Court. Under Texas
Rule of Civil Procedure 176.6(e), the recipient of an administrative subpoena
can “move for a protective order . . . before the time specified for
compliance.” Tex. R. Civ. P. 176.6(e)). Rule 176.6(d) guarantees a right
to object to subpoena requests before production. Tex. R. Civ. P.
176.6(d). Although the RTE statute does not by its text incorporate Rule
176.6, the Texas Supreme Court recently held in Annunciation House that
Rule 176.6 nevertheless provides a mechanism for precompliance review of
RTEs. 2025 WL 1536224, at *24. The Texas Supreme Court also confirmed
that “the term [immediately] cannot reasonably be read literally,” and that
the Attorney General was “not permit[ted] . . . to withhold precompliance
review.” Id.
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“[S]tate courts provide the authoritative adjudication of questions of
state law.” St. Joseph Abbey v. Castille, 700 F.3d 154, 167 (5th Cir. 2012)
(quoting Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 508 (1985)
(O’Connor, J., concurring)). When we are provided “a definitive
construction by a state court,” we defer to the state supreme court’s
decision. Id. at 168 (quoting Brockett, 472 at 508). The Texas Supreme Court
has definitively stated that the term “‘immediately’ in § 12.152 does not
exclude the opportunity for precompliance review before associated
penalties attach,” and has defined that review as encompassing the
procedures outlined in Rule 176.6. Annunciation House, 2025 WL 1536224, at
*24. This cohesion of the statute and the rule “dispel[s]” any constitutional
deficiencies present in the text of the statute alone. Id.
***
Although the district court correctly identified constitutional
deficiencies in the RTE statute at the time of its decision, the Texas Supreme
Court harmonized the RTE statute with other provisions of Texas law to
create the opportunity for precompliance review. Consistent with 28 U.S.C.
§ 2106, we thus VACATE summary judgment and the injunction, and
REMAND for further proceedings consistent with this opinion.
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