The tech industry group NetChoice is weighing in against Texas Attorney General Ken Paxton in his battle against Yelp over warning labels the review site placed on "crisis pregnancy
centers."
In a friend-of-the-court brief
filed last week with the Texas Supreme Court, NetChoice says the California-based Yelp shouldn't be required to face charges in Texas, arguing that the warnings -- placed on crisis pregnancy centers
throughout the country -- didn't specifically target Texas residents.
NetChoice's papers come in a dispute dating to 2023, when Paxton sued Yelp over warnings stating that crisis
pregnancy centers "typically provide limited medical services and may not have licensed medical professionals onsite."
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Yelp added those warnings in August 2022, soon after the
Supreme Court overturned Roe v Wade, paving the way for states to outlaw abortion. Yelp later revised its notifications to state: “Crisis Pregnancy Centers do not
offer abortions or referrals to abortion providers.”
Paxton alleged in a complaint filed in Bastrop County District Court that Yelp violated a state consumer protection
statute -- the Deceptive Trade Practices Act, which outlaws deceptive business practices.
Yelp sought dismissal of the lawsuit on several grounds. Among other arguments, the
company said it couldn't be sued in Texas over warning labels placed on crisis pregnancy centers throughout the country.
A judge in Bastrop County threw out Paxton's suit, but
he appealed to the 15th District of Texas in Austin, which reinstated the
matter.
That court said in an October ruling that Paxton could proceed with the case because Yelp "does substantial business in Texas," including by sending residents
targeted ads.
"The record reflects that Yelp derives benefits in the form of revenue from the sales of customizable location specific advertising, and from any reservations or
other purchases made through Yelp," the judges wrote.
They also said Paxton established that Yelp "purposefully directs tailored advertisements to Texas users," and that Yelp
"tracks consumers’ keyword searches and uses that information to facilitate paid advertisements."
Earlier this month, Yelp asked the Texas Supreme Court to hear an
appeal, arguing that the lower-court opinion could "open the floodgates for plaintiffs to sue out-of-state defendants in Texas for online content that does not target this state."
NetChoice is now backing Yelp's request. The group says the appellate judges' opinion could expose a broad swath of web companies to lawsuits in Texas for "disseminating content that
is available nationwide."
The organization adds that the appellate judges' reasoning, if adopted by other courts, could result in other states suing Texas-based businesses over
content.
"Texas has become home to numerous technology companies precisely because of its business-friendly legal environment," NetChoice writes.
"But
under the Fifteenth Court’s reasoning, those same companies ... could be haled into any other state for any speech disseminated on their services, so long as they conduct general commercial
activities in those states," the group adds. "The decision thus risks a race to the bottom in which all 50 states expand their jurisdictional reach at the expense of businesses headquartered
elsewhere."