By Nate Raymond

BOSTON, June 4 (Reuters) - A federal judge on Thursday questioned whether Republican Texas Attorney General Ken Paxton was unconstitutionally chilling political speech by pursuing a lawsuit against the Democratic fundraising platform ActBlue over its donation practices.

U.S. District Judge Richard Stearns signaled his skepticism during a hearing in Boston on ActBlue's request for a preliminary injunction to halt the lawsuit, which Paxton filed in April while campaigning for a U.S. Senate seat.

Paxton's lawsuit stemmed from one of several Republican-backed probes into ActBlue, which President Donald Trump last year directed the U.S. Department of Justice to investigate along with other online fundraising platforms.

Paxton alleges ActBlue violated Texas law by misleading consumers about its fundraising processes when it told Congress in 2024 it had stopped accepting donations via gift cards and foreign prepaid debit cards, only to quietly resume gift card donations.

The group's actions facilitated illegal campaign contributions by foreign nationals who could conceal their identities, according to the lawsuit, and as a result ActBlue should be forced to pay penalties and be blocked from accepting gift card donations.

"Texans care a lot about secure elections," said Lauren Saeger, a lawyer in Paxton's office.

But Stearns, who was appointed by Democratic President Bill Clinton, appeared sympathetic to ActBlue's contention that Paxton's lawsuit was filed in bad faith to retaliate against a political foe in violation of the free speech protections of the U.S. Constitution's First Amendment.

"Isn’t the chilling effect simply the fact of the investigation?" Stearns said.

He said it appeared Paxton "has appointed himself to enforce federal election law," pursuing a case that, the judge suggested, could deter donors from using ActBlue's platform out of fear he could obtain their private information.

Amanda Masselam Strachan, a lawyer for ActBlue at Wilmer Cutler Pickering Hale and Dorr, argued the case was consistent with Paxton's "well worn playbook of using his office to target his rivals.”

She said Paxton's office only launched the lawsuit following several fundraising announcements by his Democratic opponent in the Senate race, James Talarico, who has used ActBlue to raise tens of millions of dollars from small-dollar donors.

Since its founding in 2004, ActBlue has helped raise $19 billion for Democratic candidates and causes.

Saeger countered that even if Paxton had a "political disagreement" with ActBlue and some "incidental chilling" of political speech might occur, the lawsuit could proceed as long as the state had evidence and an alternative, neutral reason to pursue the state law case.

“So a little bit of chilling is okay, but not a lot?" Stearns retorted.

The judge promised a "prompt" ruling sometime after Thursday. He previously issued a May 7 order saying he was tentatively of the view that ActBlue would likely succeed on some or all of its First Amendment claims.

The case is ActBlue LLC et al v. Paxton, U.S. District Court for the District of Massachusetts, No. 1:26-cv-11986.

For ActBlue: Felicia Ellsworth, Amanda Masselam Strachan and Timothy Perla of Wilmer Cutler Pickering Hale and Dorr

For Paxton: Wade Johnson, Brian Tung and Lauren Saeger of the Office of the Attorney General of Texas

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