CA15 Argument Preview: In re Powered by People

On Thursday, March 12, the Fifteenth Court of Appeals will hear oral arguments in 15-25-00140-CV, In re Powered by People. You can watch on the Court’s YouTube channel. Many of you will recall that in 2025’s special legislative session, Democrats fled Texas to break quorum and prevent a vote on congressional redistricting. Quo warranto proceedings to oust the quorum breakers remain pending at the Texas Supreme Court.

This dispute arises from Powered by People (PxP)’s (led by Beto O’Rourke) fundraising efforts to support the quorum breakers. The AG sued under the Texas Deceptive Trade Practices Act (DTPA), alleging that PxP’s fundraising and assistance, which funded the legislators’ out-of-state activities and raised money to support them while they remained absent from the legislature, was deceptive, misleading and may have violated the Texas Election Code.

The state’s central allegation is that PxP misled donors by soliciting political contributions while allegedly using those funds for unlawful or non-political purposes. Specifically, the AG contends that PxP raised money through online platforms such as ActBlue while representing that the funds would support legitimate political activity, but instead used the money to cover travel, lodging, dining, and other expenses for the legislators who had fled Texas. The State argues that these uses constitute “personal use” under Texas law and may violate both the Election Code and provisions of the DTPA prohibiting false, misleading, or deceptive acts in commerce.

The state filed suit in Tarrant County district court and obtained a temporary restraining order prohibiting PxP from raising or spending funds to support absent legislators during the special session. The TRO barred PxP from fundraising for such purposes, from providing travel or other benefits to the legislators, and from transferring related funds outside Texas during the pendency of the litigation. The state also pursued discovery and additional relief, including civil fines.

PxP responded by filing a petition for writ of mandamus in the Fifteenth Court of Appeals, arguing that the trial court lacked subject matter jurisdiction over this suit because the state has no standing to bring the claims it pleads because “the DTPA does not govern transactions between political donors and donees.” PxP’s principal argument is that the DTPA does not apply to political fundraising or political speech because the statute regulates consumer transactions involving goods or services. Donors who contribute to political organizations are not “consumers” purchasing goods or services. The AG cannot, thus, bring a DTPA enforcement action based on those activities. The trial court therefore lacks subject-matter jurisdiction. So the issue is twofold: (1) Does the DTPA apply? (2) Is this a subject matter jurisdiction issue or a merits issue (which can be put off until later)?

PxP further contends that the TRO operates as an unconstitutional prior restraint on political speech under both the First Amendment and the Texas Constitution. The temporary restraining order prohibits them from raising funds and communicating with supporters, which is core political speech protected by the First Amendment and the Texas Constitution. Because the order restricts speech before any final determination of wrongdoing, they argue it constitutes an unconstitutional prior restraint. Political fundraising and advocacy, they assert, are among the most strongly protected forms of expression.

The mandamus petition also raises several procedural challenges. PxP argues that venue was improper in Tarrant County and should have been transferred to El Paso County, where PxP filed related litigation challenging the AG’s investigative demands, because O’Rourke and PxP are “at home” in El Paso. They also assert that the State failed to establish that Tarrant County has any meaningful connection to the alleged conduct and that venue is mandatory in El Paso because the State’s suit primarily seeks injunctive relief.

The state, in response, argues that the DTPA reaches misrepresentations made to donors, even in political contexts because Tex. Bus. & Com. Code § 17.47 is broader than the consumer provision. Section 17.47 authorizes the AG to bring suit whenever it believes the sued individual or entity is “engaging in, has engaged in, or is about to engage in any act or practice” unlawful under the DTPA, and that the State’s lawsuit “would be in the public interest.” An act or practice violates the DTPA if it is “[f]alse, misleading, or deceptive” and occurred “in the conduct of any trade or commerce.” Id. at § 17.46(a). According to the AG, PxP’s argument, which focuses on defining “trade” and “commerce” as requiring a “good” or “service,” is mistaken. The DTPA’s definition, the AG argues, encompasses more activity than just goods and services. Read in its entirety, Texas Business and Commerce Code defines “trade” and “commerce” as “the advertising, offering for sale, sale, lease, or distribution of any good or service, of any property, tangible or intangible, real, personal, or mixed, and any other article, commodity, or thing of value, wherever situated, and shall include any trade or commerce directly or indirectly affecting the people of this state.” (emphases AG’s).

According to the AG, PxP allegedly told donors their contributions would support legitimate political activity while instead using the money to fund travel, lodging, and other personal expenses for legislators who had fled Texas to avoid performing their legislative duties. Such alleged misrepresentations constitute deceptive practices under the statute.

The AG also argues that venue is proper because the suit is not primarily about injunctive relief. Rather, the civil penalties are the primary purpose. And, under the DTPA’s venue provisions, the State may file suit in a county where the unlawful acts occurred or where the defendant does business. According to the AG, some transactions took place in Tarrant County.

In addition to whether the DTPA applies absent to political donations, perhaps the most interesting question is whether this is a subject matter jurisdiction fight or a merits fight. PxP challenges the trial court’s subject matter jurisdiction, arguing that the state has no standing to bring the case. But the state challenges that view, citing recent Texas Supreme Court decisions. Put simply, sometimes standing has been used with air quotes (or imprecision), as an erroneous shorthand for a matter that is more properly considered a merits decision about the viability of a claim.

In Texas Right to Life v. Van Stean, the Texas Supreme Court highlighted its earlier decision in Pike v. Texas EMC Management, LLC, in which the Court clarified the distinction between “standing in the true constitutional sense of that term” and “statutory or prudential considerations that ‘do not implicate subject-matter jurisdiction’ but determine whether a plaintiff ‘falls within the class of persons ... authorized to sue’ or otherwise has ‘a valid . . . cause of action.’ ” 610 S.W.3d 763, 773-74 (Tex. 2020) (cleaned up). The Court acknowledged that the imprecision in its earlier opinions “is regrettable because it has tangled the line demarcating issues that truly implicate a trial court's subject-matter jurisdiction from those pertaining to the merits.” The Supreme Court noted the importance of the distinction because the term, properly used, implicates subject-matter jurisdiction, while other issues sometimes referred to as standing, including whether a cause of action exists or whether a given plaintiff has the right to bring such a cause of action, pertain to the merits and generate judgments on the merits.

The state contends that this case falls into the latter bucket—PxP challenges whether the State, as a plaintiff, has the right to bring a cause of action against them under the DTPA. But, according to the Texas Supreme Court, “the question whether a plaintiff has established his right ‘to go forward with [his] suit’ or ‘satisfied the requisites of a particular statute’ pertains ‘in reality to the right of the plaintiff to relief rather than to the [subject-matter] jurisdiction of the court to afford it.’” Pike, 610 S.W.3d at 774. Thus, this is not something to be addressed before the merits (because subject matter jurisdiction always comes first, as Justice Young has repeatedly reminded!).

I’ll be interested to see how this plays out in the Fifteenth Court.

Stay tuned for more from me, especially as the Supreme Court catches up on its backlog and releases what is sure to be an onslaught of opinions in the coming weeks.

Until then…