Texas AG Paxton files for rehearing of Project Connect lawsuit appeal

AUSTIN (KXAN) — Attorney General Ken Paxton's office filed a motion requesting a rehearing, after the 15th Court of Appeals dismissed his appeal earlier this month in the ongoing Project Connect legal battle. KXAN reached out to both the city of Austin and the Austin Transit Partnership regarding this latest motion and will update this story once we've received a response.

Bill Aleshire and Rick Fine, the co-counsels representing a group of plaintiffs in a separate Project Connect lawsuit, shared the news via a statement with KXAN Wednesday. Aleshire and Fine said Paxton's latest motion calls for the dismissal of the Austin Transit Partnership and the city of Austin's bond validation lawsuit, filed in February, in an effort to validate the funding structure behind Project Connect's upcoming light rail system.

Paxton's newest motion alleged the court "erred in holding that it lacked appellate jurisdiction" related to his interlocutory appeal, first filed June 17 on the same day a trial in the 53rd District Court was poised to begin. His office also filed a notice with the court Wednesday deeming the Deputy Solicitor General Bill Davis his lead counsel on this case, Aleshire and Fine added.

"We would have gone to trial last spring, if not for the constant stream of stall tactics by the City and ATP," Aleshire and Fine said in an emailed statement Wednesday. "The most disingenuous obstacle that they’ve placed in our path has been their bogus 'bond validation' lawsuit, which the Attorney General is trying to throw out. The Attorney General’s Opinion Committee already determined 18 months ago that Project Connect's current funding scheme is illegal and unconstitutional, so the City and ATP are merely postponing the inevitable."

That determination referenced by Aleshire and Fine points to an opinion issued by Paxton in May 2023 that questioned the debt and tax structure behind Project Connect, along with the creation of the Austin Transit Partnership as the organization tasked with creating and delivering the transit program. That opinion signified a non-binding interpretation on Paxton's behalf, one that the Austin Transit Partnership and city officials have continuously rebuked.

A handful of lawsuits have targeted Project Connect within the past year. A group of plaintiffs, represented by Aleshire and Fine, filed a suit last November related to the revised light rail plan adopted by Project Connect leadership. The Austin Transit Partnership then filed its bond validation lawsuit in February.

In late August, a new suit filed by a group of plaintiffs alleged Austin City Council’s now-approved property tax rate for fiscal year 2025 violates Texas Tax Code, arguing the 2020 property tax rate increase for Project Connect funding is no longer feasible and that the tax isn’t being used as promised to constituents.

The 15th Court of Appeals, which began operating Sept. 1, dismissed Paxton's appeal Oct. 8, citing a "lack of jurisdiction." The court's full response from Oct. 8 is available below.