Ruling reverses trial court’s constitutional block on Ken Paxton’s attempt to revoke Annunciation House’s corporate charter
The Texas Supreme Court ruled on May 30, 2025, that Attorney General Ken Paxton may initiate a quo warranto action against Annunciation House, a Catholic nonprofit in El Paso that provides shelter to migrants. A quo warranto action is a legal proceeding used to challenge whether a corporation or individual has the lawful authority to perform a function or occupy a position—often used historically to revoke corporate charters for unlawful conduct. The Court reversed a trial court’s injunction that had barred Paxton from pursuing such a case and held that Texas law allows the attorney general to initiate litigation aimed at testing whether the nonprofit has forfeited its right to operate under state corporate law. The Court did not reach the question of whether Annunciation House violated any law.
The case, Warren Kenneth Paxton, Jr., in his Official Capacity as Texas Attorney General, and the State of Texas v. Annunciation House, Inc., began after state officials appeared at one of Annunciation House’s shelters in February 2024 and issued a demand to examine internal records. The nonprofit’s counsel responded that records would be produced within 30 days, but the attorney general moved to revoke the organization’s charter, later alleging the shelter was operating as a “stash house” for undocumented migrants.
The 205th Judicial District Court ruled in favor of Annunciation House, finding that the statutes used to demand records were unconstitutional under the First and Fourth Amendments, that the effort violated Texas’s Religious Freedom laws, and that the Penal Code provisions cited—§20.05(a)(2) and §20.07(a)(1)—were either unconstitutionally vague or preempted by federal immigration law. It denied the attorney general permission to file a quo warranto action and required any future record requests to undergo judicial pre-review.
The Texas Supreme Court reversed that outcome, holding that the trial court erred by blocking Paxton from even filing the lawsuit. The Court stated that Article IV, §22 of the Texas Constitution authorizes the attorney general to seek the forfeiture of corporate charters when there is “sufficient cause,” including alleged unlawful conduct, unless a statute expressly limits that power. No such statute, the Court concluded, applied in this case.
“Our holding is limited to that narrow question,” wrote Justice Young for the Court. “The question reduces to whether the attorney general may file a lawsuit.”
The case will now return to the El Paso trial court, where the attorney general may file his quo warranto counterclaim. The court will oversee standard litigation, including motions and possible discovery. The trial court has not yet set a schedule for the next phase of proceedings.
Legal Commentary: Religious Liberty and the Limits of State Power in Quo Warranto Actions
This case raises important constitutional questions not just about corporate law but about religious liberty. The Texas Supreme Court’s ruling in Texas v. Annunciation House opens the door for Attorney General Ken Paxton to file a quo warranto lawsuit, but it leaves unresolved whether the state can ultimately use corporate law mechanisms to penalize religious conduct protected under the Texas Religious Freedom Restoration Act (RFRA) or the First Amendment.
Annunciation House has long maintained that its mission to shelter migrants is an exercise of religious conviction, rooted in Catholic social teaching and protected as religious exercise. The trial court found that the state’s records demand and attempt to dissolve the nonprofit’s charter constituted unlawful religious harassment. The Supreme Court, while reversing on procedural grounds, explicitly did not decide whether such a claim might succeed once the case develops a factual record.
That’s key. Under RFRA, the government must show that any substantial burden on religious exercise serves a compelling interest and is the least restrictive means of achieving it. The state’s interest in enforcing immigration laws, while weighty, may not justify dissolving a faith-based charity without proving that less burdensome alternatives were considered. The trial court will now have to weigh whether charter revocation—an extreme remedy—is a permissible state action when weighed against protected religious conduct.
This ruling reinforces the attorney general’s right to file suit, but it does not resolve whether the lawsuit itself can survive religious liberty challenges. The real legal contest will now unfold in trial court, where constitutional and statutory protections for religious exercise will be tested against the state’s claims of unlawful conduct.