A federal judge in Boston on Thursday ordered Texas Attorney General Ken Paxton to drop his lawsuit against the Democratic fundraising platform ActBlue, ruling that the case amounted to retaliatory litigation.
U.S. District Judge Richard G. Stearns issued the decision after finding that Paxton’s legal actions were motivated by political retaliation. The ruling also blocks Paxton from continuing related litigation in state court or filing similar cases against the company.
ActBlue filed its own lawsuit against Paxton in early May, arguing that the attorney general’s investigations and legal actions against the platform were politically driven and violated its constitutional rights.
In his ruling, Stearns pointed to Paxton’s decision to resume an investigation into ActBlue shortly after Democratic state Rep. James Talarico announced a major fundraising haul following an appearance on a late-night television program.
“The truth is plain and captured in Paxton’s own declarations: The lawsuit was filed in retaliation for (and in an attempt to suppress) ActBlue’s efforts to fund Talarico’s campaign,” Stearns wrote.
Paxton first filed the lawsuit in April, alleging that ActBlue allowed improper or illegal political donations, including contributions from foreign sources and donors exceeding federal limits. His office had previously opened an investigation into the platform in December 2023.
In August 2024, Paxton announced that ActBlue had agreed to require CVV codes for credit card donations, which he described as a regulatory win.
The judge cited evidence that Paxton publicly linked his legal actions to political developments and discussed the case in connection with his U.S. Senate campaign against Talarico, who is also a candidate in the race.
Stearns wrote that federal intervention in state cases is rare but warranted in this instance due to evidence of bad faith.
“The evidence of bad faith is sufficiently overwhelming to qualify this as one of the rare cases where the exception should apply,” he wrote.
Paxton’s legal team argued that federal courts should not interfere in ongoing state proceedings. The court rejected that argument in this case.
ActBlue, which has processed billions of dollars in political donations since its founding, argued that Paxton’s actions violated its First and Fourteenth Amendment rights and misrepresented the findings of his office’s investigation.
In a statement, ActBlue said Paxton framed the investigation in partisan terms rather than consumer protection concerns and accused him of using state power to target protected political activity.
“This is not law enforcement. It is retaliation against constitutionally protected speech and association,” ActBlue said.