In its recent decision in Office of the Attorney General v. PFLAG, Inc., the Texas Supreme Court addressed the scope of the attorney general’s (AG) authority to issue civil investigative demands (CIDs) under the Deceptive Trade Practices Act (DTPA). The dispute arose against the backdrop of State v. Loe, a case challenging Texas’s statutory ban on certain gender-affirming medical treatments for minors. PFLAG, a nonprofit involved in that litigation, received a CID issued by the Office of the AG (OAG) based on statements made in a supporting affidavit, which led the OAG to assert that PFLAG may have information relevant to potential misrepresentations by medical providers to insurance companies.

The Texas Supreme Court confirmed that recipients of CIDs under the DTPA may challenge their validity and scope on many grounds. However, the court also concluded that the trial court had erred in quashing the CID on the ground that the OAG had not proven that PFLAG likely possessed information relevant to the OAG’s investigation. According to the Supreme Court, OAG’s reasonable belief that a CID recipient possesses relevant information is enough to justify issuance of a CID.

Background

PFLAG’s involvement in the dispute traces back to its participation in the litigation that led to the Texas Supreme Court’s decision in State v. Loe, 692 S.W.3d 215 (Tex. 2024), which challenged Texas’s prohibition on certain forms of transgender care for minors. In support of that challenge, PFLAG’s executive director submitted an affidavit describing the organization’s interactions with families following the law’s passage. Among other things, the affidavit stated that families were asking PFLAG chapters for “alternative avenues to maintain care in Texas” and exploring contingency plans in response to the new legal landscape.

Those statements drew the attention of the OAG, which was investigating whether medical providers were violating the law and concealing that conduct through deceptive billing practices. The OAG issued a CID seeking documents underlying the affidavit, including communications about contingency planning, referrals to health care providers, and materials reflecting the basis for the affidavit’s assertions. At a high level, the CID functioned much like a pre-suit discovery request — seeking to determine whether PFLAG possessed information that could assist the investigation.

PFLAG challenged the CID in a state trial court, arguing that the OAG lacked a sufficient basis to believe that PFLAG had relevant information and that the requests were overly intrusive. The OAG responded by narrowing its demand for documents, including by agreeing to the redaction of PFLAG members’ identities and reissuing a new CID, but PFLAG continued to oppose the CID.

The matter remained pending in the trial court for over a year. Eventually, the trial court issued an order protecting PFLAG from producing several categories of requested documents and enjoining further investigation. In doing so, the trial court focused its analysis on the propriety of the original CID rather than the reissued CID, which the court concluded was not properly before it. The trial court also agreed with PFLAG that the CID was improper, concluding that the OAG had failed to show that PFLAG “likely” possessed information relevant to the investigation.

Key Holdings

The Texas Supreme Court reversed the trial court’s order protecting PFLAG from the CID and further investigation. In so doing, the Supreme Court addressed several issues concerning enforcement of CIDs issued by the Texas OAG that have broader implications beyond the PFLAG case.

First, the Supreme Court was critical of the trial court’s handling of the matter, emphasizing that petitions to modify or set aside a CID ordinarily should result in “speedy judicial rulings on recognized discovery objections.” For example, with both CIDs and discovery requests in civil litigation, “a party is generally entitled to relevant, non-privileged information in the other party’s possession, but courts should ensure that production of privileged material is not compelled and should protect parties from unnecessarily burdensome, invasive, or harassing demands.” The Supreme Court contrasted this approach with the approach taken by the trial court, describing the trial court as using PFLAG’s petition “as a way to put the Attorney General’s investigation on trial.” To this point, the Supreme Court stated that a CID is “not subject to a more searching judicial inquiry merely because of its politically sensitive topic.”

Second, the Supreme Court explained that the trial court should not have continued to focus on the initial CID after the OAG agreed to modify its demands. As in civil discovery, the Supreme Court explained, once the OAG narrows its demands in a CID, “the court’s job is to officiate the parties’ remaining disagreements, not to pass judgment on the abandoned positions from which the parties began.”

Third, the Supreme Court concluded that once the OAG agreed to narrow its demands and to the redaction of the identities of PFLAG members, the privacy concerns underlying PFLAG’s challenge to the original CID dissipated. More generally, “[w]hether in civil discovery or in response to a CID, courts should take seriously a claim that discovery of private, intimate communications is unduly burdensome, harassing, or otherwise deserving of judicial protection even if not technically privileged.” Here, any threat to privacy was addressed by the redactions and by the provision of the DTPA that prohibits the OAG from disclosing material obtained via CID without consent, except as the OAG determines necessary in the enforcement of the DTPA, including presentation before any court. The Supreme Court observed that this prohibition on disclosure would seem to apply if, in fact, none of the responsive records produced by PFLAG prove useful to the OAG’s DTPA investigation, as PFLAG maintained.

Finally, as to the threshold standard for issuing a CID, the Supreme Court explained that, under the DTPA, the OAG’s authority to issue a CID is triggered by its reasonable belief that a person may possess relevant information — not by proof that the person possesses such information.

From that premise, the court articulated the governing standard: a CID issued under the DTPA is valid — subject to the usual discovery objections noted above and any constitutional constraints — so long as “a reasonable person could share the Attorney General’s belief that the recipient of the CID may have relevant material[.]” Under this “relatively lenient” standard, the court acknowledged that a trial court “would surely have good cause to set aside” a CID “[i]f the Attorney General’s office can proffer no reasonable explanation for why it believes the CID recipient may have information relevant to possible DTPA violations.”

The Supreme Court also clarified that trial courts are not tasked with determining whether the OAG’s suspicion is correct or whether the requested materials will ultimately prove useful.

PFLAG also serves as notice to CID recipients that challenging a CID by asking a trial court to conduct a factual inquiry into either the accuracy of the AG’s stated “reasonable belief” or the likelihood that responsive documents will be relevant to a DTPA investigation may not be an effective tool to help get a CID set aside. In PFLAG the Texas Supreme Court held that, because the “reasonable belief” standard focuses solely on the AG’s belief, any trial court inquiry into what the affiant “really meant” by disputed statements or into how likely PFLAG’s documents were to be relevant to a DTPA investigation only served to complicate the proceedings unnecessarily and served no valid purpose.

Takeaways

The practical impact of PFLAG is a limitation on trial courts’ authority to entertain challenges to CIDs in Texas. By rejecting a “likely relevance” standard in favor of a “reasonable belief” standard, the court articulated a lower threshold for the OAG to meet and narrowed the grounds on which CID recipients can resist. Trial courts are now directed to accept the OAG’s investigatory judgment so long as it is supported by any reasonable explanation, rather than scrutinizing whether the investigation is likely to be fruitful.

For CID recipients in Texas, this means that early-stage challenges to the factual basis of a CID are more likely to focus on the kinds of arguments that are available in civil discovery — such as privilege and burden — as well as any constitutional arguments, rather than attacks on the basis for the OAG’s investigation.

At the same time, the opinion’s discussion of the statutory bar on disclosure may provide some comfort to CID recipients that there are meaningful limits on the OAG’s ability to disclose publicly information produced in response to the CID.

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Troutman Pepper Locke State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation.
	Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies.
	Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes.
	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations, as well as litigation involving state attorneys general and other state and federal governmental enforcement bodies. He has significant experience handling actions with federal agencies, including the CFPB and FTC, as well as single plaintiff and class action litigation for clients in highly regulated sectors such as financial services, health care, pharmaceutical, and education.
	Michael Yaghi Mike handles high-profile state attorneys general, FTC, and CFPB investigations by advising clients through these complex government inquiries. He assists clients through the entire life cycle of investigations, from regulatory enforcement through formal litigation.
	Matthew J. Berns Drawing on his experience in senior leadership roles in the New Jersey Attorney General’s and Governor’s Offices and as a trial attorney for the U.S. Department of Justice, Matt provides an insider’s perspective when guiding clients through complex government investigations, litigation, and other actions.
	Samuel E. “Gene” Fishel Gene is a former regulator with two decades of experience who has overseen state privacy and cybersecurity regulation enforcement, led national, multistate attorneys general privacy investigations, and prosecuted computer crimes at the state and federal levels. He has served at the forefront of state attorney general and federal enforcement, and utilizes this experience to proficiently represent client interests.
	Jeff Johnson Jeff helps clients navigate complex regulatory and litigation challenges with local, state, and federal authorities. His clients benefit from his decade of broad litigation experience, understanding of emerging state and federal regulatory issues, and strong relationships with attorneys general across the U.S. In addition to handling cases from trial through state or federal appeals, Jeff serves as amicus counsel in advancing legal rules to support his clients’ vital interests.
	Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs.
	Zoe Schloss Zoe represents clients in litigation and government investigations. As former deputy attorney general for the Delaware Department of Justice, she is an experienced litigator who understands the enforcement priorities that impact her clients. Zoe works with individuals and corporate entities in highly regulated industries, including financial services, health care, and energy.
	Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology.
	Nick Gouverneur Nick is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. He received his J.D. from the University of Illinois College of Law, where he served as a member of the Journal of Law, Technology & Policy.
	Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	William LaRosa Bill represents clients in complex regulatory investigations, state attorneys general matters, and enforcement proceedings, drawing on his experience as a former assistant U.S. attorney and private sector litigator in high stakes, multistate AG and regulatory matters.
	Philip Nickerson Philip represents clients in sectors such as financial, tech, real estate, and energy in a range of litigation matters. He is experienced in matters involving trade secrets, government investigations, commercial contracts, construction and product defect.
	Lane Page Lane specializes in federal and state regulatory investigations and complex civil litigation. He focuses on representing financial institutions and other businesses, with a particular emphasis on consumer protection and fair lending issues.
	Dascher Pasco Dascher is an attorney within the Regulatory Investigations, Strategy, and Enforcement practice, based in the Richmond office. She joined our firm after working in personal injury and medical malpractice for a Virginia trial law firm. Dascher brings varied legal experience to the firm with strong litigation and regulatory strategy capabilities.
	Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review.
	Timothy Shyu Timothy is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group.
	Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues.
	Daniel Waltz Dan helps clients navigate all aspects highly regulated relationships between industry participants and federal, state and local governments. Whether engaging with regulators, negotiating transactions or representing clients in the courtroom, he delivers solutions that help his clients achieve their strategic goals.
	Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department.