By Nate Raymond

May 15 (Reuters) - Republican Texas Attorney General Ken Paxton may continue to pursue a case in state court accusing Yelp YELP.N of posting misleading notices on its online review site about anti-abortion crisis pregnancy centers, a federal appeals court ruled on Thursday.

A panel of the San Francisco-based 9th U.S. Circuit Court of Appeals composed of three judges appointed by U.S. President Donald Trump during his first term cited a legal principle that federal courts should not intervene in state court disputes.

Yelp called the ruling disappointing. While a Texas judge has dismissed Paxton's case, Yelp noted he is appealing that decision, meaning the case remains "a troubling attempt by a government official to punish speech with which he disagrees."

The San Francisco-based company had argued that its lawsuit was covered by an exception to the usual rule against blocking state court cases because Paxton had brought his lawsuit in bad faith in order to retaliate against it over its views about abortion.

But the panel rejected those arguments and said abstention was warranted under the U.S. Supreme Court's 1971 ruling in Younger v. Harris, which limits federal courts' ability to interfere with state court proceedings.

U.S. Circuit Judge Daniel Bress, writing for the panel, said a core premise of Younger was that a defendant could raise defenses in state court and Yelp had not sufficiently established that Paxton's case was without merit on its face.

Bress said Yelp likewise failed to establish that Paxton pursued the case out of a desire to retaliate against the company's support of abortion rights, which the attorney general has fought hard against for years.

"Although Yelp takes issue with Attorney General Paxton’s efforts to regulate abortion and abortion-related matters, state Attorneys General and other state officials are entitled to have enforcement priorities and policy positions," Bress said.

Paxton's office did not respond to a request for comment.

Crisis pregnancy centers offer pregnant women counseling but usually do not clearly advertise their anti-abortion stance.

In August 2022, Yelp began posting a notice on crisis pregnancy centers' pages stating: "This is a Crisis Pregnancy Center. Crisis Pregnancy Centers typically provide limited medical services and may not have licensed medical professionals onsite."

Yelp began posting those notices after the 6-3 conservative majority U.S. Supreme Court in June 2022 overturned its landmark 1973 ruling Roe v. Wade that had guaranteed abortion rights nationwide.

Following the Supreme Court's ruling, Yelp CEO Jeremy Stoppelman issued a public statement that the ruling made clear it was up to Congress to codify Roe and for business leaders to step up to ensure women "have access to the care they need."

Months after it began posting the notices, Yelp sued Paxton in Oakland federal court in September 2023 after learning that the Republican planned to sue the company, which he did the next day in Texas.

Paxton alleged that the notices Yelp posted on the review pages for crisis pregnancy centers violated a Texas law against unfair business practices and sought unspecified money damages.

A federal judge dismissed Yelp's lawsuit last year, citing Younger. Not long after, a Texas trial court judge dismissed Paxton's own civil enforcement action against Yelp on jurisdictional grounds. Paxton is appealing.

Yelp has since changed the notices to state that crisis pregnancy centers "do not offer abortions or referrals to abortion providers." Paxton has called the new language accurate.

The case is Yelp v. Paxton, 9th U.S. Circuit Court of Appeals, No. 24-581.

For Yelp: James Sigel of Davis Wright Tremaine

For Paxton: Lanora Pettit of the Office of the Texas Attorney General

Read more:

Yelp urges appeals court to end Texas lawsuit over crisis pregnancy center reviews

US judge won't shield Yelp from Texas lawsuit over crisis pregnancy center notices