Ex parte Paxton, 2016 Tex. App. LEXIS 5784

Background

Collin County grand jury returned three felony indictments against Warren K. Paxton, Jr.: one for acting as an investment adviser representative without Texas registration (Tex. Rev. Civ. Stat. art. 581-29(1)) and two for securities fraud.
Paxton filed four pretrial habeas applications: (1) he was covered by federal registration so Texas registration did not apply; (2) the term “investment adviser representative” is undefined/void, making article 581-29(1) vague; (3) the grand jury was improperly constituted because the judge required prospective jurors be “willing to serve”; (4) article 581-29(1) is facially overbroad and vague.
The trial court denied all four habeas applications; Paxton appealed in an accelerated interlocutory posture.
The appellate court summarized limits on pretrial habeas relief: it is an extraordinary remedy available only in narrow circumstances (e.g., lack of any statutory basis for prosecution, jurisdictional defects such as an illegally constituted grand jury that is void).
Record facts relevant to registration: Paxton referred clients to Mowery Capital; Mowery transitioned from SEC to Texas registration in June 2012 (state registration June 25, 2012; SEC withdrawal filed Oct. 11, 2012). Paxton was charged for referrals on July 18, 2012 and had not registered with Texas at that time.

Issues

Issue	Plaintiff's Argument (Paxton)	Defendant's Argument (State)	Held
1. Whether pretrial habeas may resolve whether Paxton was federally covered (so Texas registration did not apply)	Paxton: undisputed facts show he was a representative of a federally covered adviser, so no valid Texas statute applies and he must be discharged	State: issue requires statutory construction, disputed facts, and development of the record; not cognizable pretrial	Not cognizable on pretrial habeas; trial and appeal are the proper remedies
2. Whether §581-29(1) is void for vagueness because federal law preempted the state definition of “investment adviser representative”	Paxton: SEC/regulatory changes preempt or override the state definition, leaving no operative definition and creating vagueness	State: claim requires resolution of federal preemption and statutory construction not suitable on pretrial habeas	Not cognizable on pretrial habeas; court declines to resolve preemption here
3. Whether the grand jury was illegally constituted because the judge asked for jurors’ “willingness to serve”	Paxton: judge added an extra qualification, undermining randomness and rendering the grand jury void (Becker exception)	State: selection method was within judge’s discretion; any irregularity did not render the grand jury void	Not cognizable on pretrial habeas — judge’s practice was an excusal for reasonable cause and not an arbitrary disregard of statutory selection methods; no voiding of indictments
4. Whether §581-29(1) is facially overbroad or vague (freedom of speech/scienter)	Paxton: statute regulates commercial speech and lacks limiting definitions and a scienter element, so it is overbroad and vague	State: statute regulates commercial speech (less protection), overbreadth doctrine does not apply to commercial speech, and any vagueness is mitigated by ordinary meaning and by required culpable mental state for the services element	Overbreadth claim fails (overbreadth doctrine not applicable to commercial speech); vagueness claim fails because “solicit” has ordinary meaning and the statute requires a culpable mental state (knowledge/recklessness) as to rendering services element

Key Cases Cited

Ex parte Perry, 483 S.W.3d 884 (Tex. Crim. App. 2016) (limits on pretrial habeas; cognizability analysis)
Ex parte Becker, 459 S.W.2d 442 (Tex. Crim. App. 1970) (grand jury illegally constituted can render indictments void in narrow circumstances)
Ex parte Ellis, 309 S.W.3d 71 (Tex. 2010) (threshold cognizability inquiry for pretrial habeas)
Ex parte Smith, 178 S.W.3d 797 (Tex. Crim. App. 2005) (limited categories of pretrial habeas relief)
Central Hudson Gas & Elec. v. Public Service Comm’n, 447 U.S. 557 (U.S. 1980) (commercial-speech framework; courts note overbreadth doctrine does not apply to ordinary commercial speech)
Robinson v. State, 466 S.W.3d 166 (Tex. Crim. App. 2015) (culpable mental state required as to duty-to-register-type elements)
Ex parte Thompson, 442 S.W.3d 325 (Tex. Crim. App. 2014) (facial constitutional challenges cognizable pretrial)

Disposition: the court affirmed the trial court’s denials of all four habeas applications.