Yes, Paxton remains in office, and in the same office he's been using to launch numerous performative lawsuits against the federal government using Texas' usual judge-shopping mechanisms. This time, Paxton wants a Texas-based federal judge to declare that nigh-on the totality of the current federal government is unconstitutional.
Specifically, Paxton has filed Texas v. Garland, a lawsuit asking that the $1.7 trillion spending package passed by Congress and currently keeping the U.S. government and U.S. military in operation be declared unconstitutional. Paxton's argument is that, because Congress used proxy voting to pass the bill during pandemic quarantines and lockdowns, it is invalid and the government can't spend that money, ergo the government must be ordered to shut down. All the federal employees and soldiers will get letters asking them to return their paychecks or something—God knows how it would actually work in practice.
Paxton's problem, not that he gives a particular damn, is that this is already a settled federal issue. There was already a federal court case challenging the validity of pandemic proxy votes; it was found to be valid, and even our nihilistic, hard-right Supreme Court didn't want to revisit that decision. Vox has a long explainer that details the many problems with the theory, so read that if you want the rundown.
The short version, though, is that Congress has broad constitutional authority to define its own rules however it wants, and if it says members can vote by proxy then they can vote by proxy. It is true that the Founding Fathers did not envision even the telegraph, much less the telephone, satellite communications, or internet video feeds. Unless Supreme Court Justice Samuel Alito or his peers want to have another seance with long-dead English witch hunters to declare that all of this newfangled electronica is inconsistent with our time-honored, leech-reliant values, Congress is free to hold entire sessions via Zoom call if that's what they vote to do.
What a Paxton-shopped Republican judge can do, however, is throw the entire federal budget into chaos by issuing a ruling that contradicts the previous rulings, forcing the whole question back to the Supreme Court. That's been Paxton's mode of operation throughout, as he files outlandish claims in front of Trump-appointed judges and basks in the resulting publicity. Paxton, this time, has judge-shopped the case to Lubbock, Texas, and to Trump appointee Judge James Wesley Hendrix.
Hendrix was previously in the news for striking down a federal statute ordering hospitals to perform abortions if they are medically necessary, because Texas, and could choose to use this case for a new disruption of federal powers—but it would be a remarkable move, because the remedy Hendrix would have to attach would be ... what, exactly? That the paychecks be rescinded? That the money be yanked back from federal agencies and departments, causing offices nationwide to go dark until House Speaker Kevin McCarthy's new burn-it-down caucus can come together to "fix" it?
Until this newest Supreme Court was hatched, federal courts have generally been wary of causing straight-up national crises based on their own pseudo-textual nitpicking. If there's a Trump appointee out there who really wants to be the name attached to every member of the U.S. military losing paychecks for an indeterminate period, they won't find much support even from their cocktail party peers.
In the meantime, the real question remains. Why on earth is Ken Paxton still in office, even after his own attorney general's office lieutenants reported him to the FBI for taking bribes? Does Texas judge shopping also come with the ability to just ignore securities fraud indictments forever? Does this state have any remaining court systems that aren't explicitly devoted to anti-federal stunt rulings for the sake of blazingly crooked Republican officeholders?
The Department of Justice appears to be asking some of those same questions; the D.C. office has now taken Paxton's bribery and corruption probe from the Texas team that had been investigating it, with the U.S. attorney's office in Texas recused from the case shortly after Paxton agreed to pay out $3.3 million (in taxpayer funds, not his own) to four of the ex-staffers who alerted the FBI about his actions. Perhaps D.C. prosecutors will be able to work at a less glacial pace than the Texas prosecutors that have slow-walked Paxton's previous indictment for the better part of a decade now?
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