(CN) - A D.C. Circuit panel upheld a preliminary injunction blocking Texas Attorney General Ken Paxton from subpoenaing a progressive media watchdog group that wrote an article critical of Elon Musk's social media site X.

In a unanimous decision, the panel determined that Media Matters had a meritable free speech claim against Paxton for pursuing a retaliatory investigation against the D.C.-based nonprofit over its reporting.

Senior U.S. Circuit Judge Harry T. Edwards writes for the majority that the attorney general's investigation not only created a chilling effect that threatened to squelch protected speech, but it also represented a concrete act of retaliation against a media company and its reporter for exercising a constitutional right.

The Jimmy Carter appointee writes there is "uncontested evidence" that Media Matters is the "target of a government campaign of retaliation," including the investigation, a press release and a sweeping civil investigative demand.

"Such a campaign of retaliation in response to appellees' exercise of their First Amendment rights reflects concrete and present harm," Edwards writes. "And as the target of an arguably bad-faith investigation, appellees are also experiencing special burdens on their newsgathering activities and operation of their media company."

U.S. Circuit Judge Karen LeCraft Henderson writes in a concurring opinion that she did not believe the chilling effect of the investigation was sufficient to show harm but nonetheless agreed the attorney general hurt the group's professional associations.

The panel also affirmed that the District Court of D.C. was a proper venue for the suit.

The suit stems from an article Media Matters published in November 2023, reporting that corporate advertisements on X appeared next to racist content on the platform after it was purchased by Musk.

Days after it published, X sued the nonprofit, claiming it manipulated the website's algorithm so that advertisements would appear adjacent to racist content, part of a "smear campaign" by the organization.

That same day, Paxton announced he was launching a consumer fraud investigation into Media Matters, which he referred to in a press release as a "radical left-wing organization who would like nothing more than to limit freedom by reducing participation in the public square."

Paxton issued a civil investigative demand, a type of subpoena, to the nonprofit, demanding a broad swath of records, including all internal documents and communications dating back to Jan. 1, 2022.

Media Matters and Eric Hananoki, senior investigative reporter behind the article, responded by suing the attorney general in January 2024. Initially filed in Maryland, where Hananoki lives and works, the suit was quickly transferred to the D.C. District Court.

Media Matters argues in the suit that Paxton's investigation was clear retaliation intended to chill further reporting on X, violating the organization's First Amendment rights.

U.S. District Judge Amit Mehta, a Barack Obama appointee, granted a petition for a preliminary injunction in August, which bars Paxton from enforcing the demand until the case is resolved.

Paxton argued on appeal that the D.C. court lacked jurisdiction over him as the attorney general for Texas.

The panel rejected that argument Friday, ruling that D.C.'s long-arm statute permitted suing individuals, including public officials, who have minimal contacts with the capital. In this case, Paxton hired FedEx and a process server to deliver his demand for records to Media Matters' D.C.-based office, which qualified as minimal contacts.

The court also rejected arguments that Media Matters lacked standing.

"Appellees clearly have standing to pursue action," Edwards writes in the opinion. "They are the targeted victims of a campaign of retaliation; the harms inflicted on appellees have been caused by Paxton and the Texas Office of the Attorney General that he directs; and the injuries that are the subject of appellees' complaint will be redressed by the injunction that they seek."

Source: Courthouse News Service