[00:00:00] Speaker 02: May it please the court, James Siegel on behalf of Yelp. [00:00:04] Speaker 02: I'd like to reserve three minutes of my time for rebuttal. [00:00:07] Speaker 02: Younger v. Harris sets forth a narrow exception to federal court's virtually unflagging obligation to hear the cases within their jurisdiction. [00:00:15] Speaker 02: But as courts have consistently recognized, Younger must give way when a state action is brought with a desire to harass or is conducted in bad faith. [00:00:25] Speaker 02: That is the case here. [00:00:28] Speaker 02: Attorney General Paxton attacked Yelp for publishing an advisory stating that crisis pregnancy centers typically provide limited medical services and may not have licensed medical professionals on site. [00:00:43] Speaker 02: He did so even though he recognized that that was literally true, even though he had no evidence that any consumer was misled by that statement. [00:00:51] Speaker 02: And even though that statement could not possibly constitute commercial speech to which the Texas DTPA, which is the state statute that he brought his action under, could apply to it. [00:01:03] Speaker 02: Younger's bad faith exception has thus satisfied for two independent reasons. [00:01:08] Speaker 02: First, the Texas action is objectively meritless. [00:01:13] Speaker 02: That is, it was brought without a reasonable expectation of obtaining a valid judgment against Yelp. [00:01:19] Speaker 02: clearly established principles of both First Amendment law and Texas law foreclosed the action. [00:01:26] Speaker 02: Attorney General Paxton's theory is that Yelp's advisory was misleading. [00:01:31] Speaker 02: It was not. [00:01:32] Speaker 02: And even showing that it was would require evidence of consumers being misled, which there is no such evidence. [00:01:38] Speaker 02: But even if it were misleading, Yelp could be punished for that speech only if its warning to consumers was commercial speech. [00:01:47] Speaker 04: So let me ask you a very preliminary question. [00:01:53] Speaker 04: What's going on right now with the Texas appeal? [00:01:56] Speaker 02: So it was dismissed for lack of personal jurisdiction over Yelp. [00:02:00] Speaker 04: Right, that was in the trial court, right? [00:02:02] Speaker 02: Yes, Your Honor, and it was appealed. [00:02:04] Speaker 02: It's fully briefed. [00:02:04] Speaker 02: I believe it's set for argument next week, actually. [00:02:07] Speaker 04: Okay, so that is still pending. [00:02:08] Speaker 04: That is still pending, Your Honor, yes. [00:02:10] Speaker 04: And as far as I can tell, Yelp is not arguing that some of the alleged bad faith is suing Yelp without personal jurisdiction. [00:02:22] Speaker 02: Your Honor, I believe that also contributes to the showing of bad faith and that the Texas Attorney General didn't even attempt to allege why there was personal jurisdiction over Yelp in Texas and the trial court readily dismissed the action in a one-line order. [00:02:36] Speaker 02: That's not our central contention in terms of the bad faith here. [00:02:40] Speaker 04: All right. [00:02:40] Speaker 04: So if we were to disagree with you about [00:02:47] Speaker 04: weather under 17.46. [00:02:57] Speaker 04: We were to find that under the appropriate test, the action was objectively reasonable. [00:03:03] Speaker 04: If we were to reject your claim that it wasn't objectively reasonable under 17.46, what would you then have to show to still show bad faith if you couldn't demonstrate that Attorney General Paxton was objectively unreasonable in bringing the action? [00:03:23] Speaker 02: It would also satisfy the bad faith requirement if it was brought with a retaliatory purpose. [00:03:29] Speaker 04: And how would you establish that? [00:03:31] Speaker 02: Through the ample circumstantial evidence that Yelp provided to the district court. [00:03:36] Speaker 02: The district court recognized constitute a compelling case. [00:03:39] Speaker 02: So first there is, again, I understand your honors question, sort of put aside the meritlessness of the Texas action. [00:03:45] Speaker 02: But even if it's not totally objectively frivolous, which we submit it is, [00:03:50] Speaker 02: Its weakness is certainly indicative of bad faith. [00:03:53] Speaker 02: That's one piece of evidence. [00:03:55] Speaker 02: The second piece of evidence is Attorney General Paxton's press release following the action being brought against Yelp, in which he expressly called out the statements of Yelp CEOs regarding his support for abortion. [00:04:07] Speaker 02: suggesting fairly clearly that those sorts of statements and actually Yelp's actions with respect to abortion are the motivating factor behind this action. [00:04:17] Speaker 02: Third is the lack of any investigation whatsoever, any meaningful investigation into whether any consumers were misled. [00:04:24] Speaker 02: Essentially the sole evidence of any investigation conducted by the Texas Attorney General's Office was reviewing a single email from maybe one, possibly two CPCs. [00:04:33] Speaker 04: You know, counsel, attorneys general bring lots of different actions, lots of different UDAP actions, like maybe not exactly like this one, but under statutes like this one. [00:04:46] Speaker 04: So would any time somebody claimed that, you know, there are some merits problems here, [00:04:55] Speaker 04: They don't like our company. [00:04:57] Speaker 04: They have a political motive for doing this. [00:05:01] Speaker 04: There is some kind of discriminatory aspect here that you automatically get to go into a full blown hearing as to whether there is sufficient evidence [00:05:16] Speaker 04: to show something that gets you to a younger exception, even in the face of an objectively reasonable claim by an attorney general? [00:05:30] Speaker 02: No, Your Honor. [00:05:30] Speaker 02: I think there needs to be some sort of showing. [00:05:32] Speaker 02: Again, so this is a 12b1 dismissal. [00:05:34] Speaker 02: So the evidence submitted that inferences have to be drawn in Yelp's favor. [00:05:38] Speaker 02: And I would submit that there's ample basis to conclude that this is sort of a particularly egregious example of an attorney general. [00:05:45] Speaker 02: retaliating against the company. [00:05:48] Speaker 04: On your evidence, your view is you should have been able to go forward with full-blown discovery into the Attorney General's motives, all the documents that the Attorney General had gathered in the investigation because they could bear on retaliation and basically go into all of the Attorney General's investigatory and other files [00:06:12] Speaker 04: to be able to prove your bad faith claim. [00:06:15] Speaker 02: Yet we were entitled to at least some sort of discovery, Your Honor, and this court's decision in cases such as Lau recognized that where the facts are controverted regarding a jurisdictional issue, and there's at least some basis to conclude that the sort of the jurisdictional test is met, as there certainly is here, that there should be discovery afforded. [00:06:33] Speaker 02: And Yelp asked for discovery, the district court didn't even address that request. [00:06:37] Speaker 02: not alone as basis to affirm. [00:06:39] Speaker 02: But again, I'd like to push back a little bit on sort of the presumption this suit wasn't objectively meritless. [00:06:45] Speaker 02: I take the Texas Attorney General's argument to largely concede that [00:06:52] Speaker 02: the speech that Yelp made, the consumer warnings they provided, would need to be commercial speech in nature for the DTPA to validly be applied to it. [00:06:59] Speaker 02: There's really no viable argument that Yelp's statements warning consumers about a product that Yelp doesn't offer, that doesn't compete with anything Yelp does, that is essentially the exact same as the reviews in Bose, that's a Supreme Court case recognizing that speech about a speaker [00:07:21] Speaker 02: describing the speaker and criticizing in some ways, was fully protected speech, not commercial speech. [00:07:27] Speaker 03: I think the difficulty here is the significance of what Yalpa is asking in the case, because you're not just saying you win on the merits of this Texas case. [00:07:41] Speaker 03: You're saying you want a federal court to actually enjoin [00:07:44] Speaker 03: a state attorney general from prosecuting that case, from pursuing that case. [00:07:48] Speaker 03: You want to have discovery into the attorney general's thought processes or process for bringing and investigating that case. [00:07:56] Speaker 03: That's a difficult one because it seems to me we're going to have, if you win on this, we're going to have cases filed every week in federal court saying, I do not like what that state attorney general is doing to me. [00:08:06] Speaker 03: in that state, and in this case, you've actually prevailed in Texas. [00:08:10] Speaker 03: You have a Texas legal system that's not alleged to be biased against you. [00:08:14] Speaker 03: You're doing well there so far, and you have arguments on the merits of your claims, which you're free to raise there. [00:08:19] Speaker 03: So that's my broader concern with what your client's asking us to do in the case. [00:08:24] Speaker 02: Well, Your Honor, this exception to Younger has been well recognized essentially since Younger was first set out. [00:08:30] Speaker 02: True, but it's been very narrowly applied. [00:08:32] Speaker 02: Narrowly applied, Your Honor, but this is the sort of exceptional circumstance in which it could be applied. [00:08:36] Speaker 02: And so even the retaliatory motive branch of the Younger Bad Faith Inquiry, there's [00:08:41] Speaker 02: There's four different circuits that have established that. [00:08:43] Speaker 02: The Fifth Circuit, I believe, was the first back in the 70s. [00:08:46] Speaker 02: And there's still just a handful of cases in which the prosecuting authorities were found to have engaged in bad faith. [00:08:53] Speaker 02: And that's because generally district attorneys, attorney generals, they're not acting in bad faith. [00:08:58] Speaker 02: They're not bringing prosecutions for retaliatory motives. [00:09:01] Speaker 02: This is the rare case where we have an attorney general who is consistently reaching out to punish the speech. [00:09:07] Speaker 02: of companies and others that he doesn't approve of and then in fact saying in a press release, calling out the fully First Amendment protected speech of the CEO of the company he's prosecuting and then using that as the basis for bringing suit. [00:09:21] Speaker 02: And that suit again is objectively meritless because this could not possibly constitute commercial speech either under any decision [00:09:28] Speaker 02: In this circuit, in the Texas Court's appeal, we've cited the Reynolds case. [00:09:33] Speaker 02: It's very clear that this is not commercial speech because Yelp is not proposing a transaction of any sort. [00:09:41] Speaker 02: It's describing a product offered by another party and simply warning consumers that they should check and see whether the facts on the ground are in fact what they're being [00:09:52] Speaker 02: represented. [00:09:53] Speaker 02: So Yelp issued this consumer warning because there were concerns raised by a number of different attorney generals about the misrepresentations being made by CPCs. [00:10:03] Speaker 02: So Yelp is simply warning consumers, essentially, buyer beware, check and see that this is in fact what you're looking for. [00:10:09] Speaker 02: That couldn't possibly be commercial speech. [00:10:12] Speaker 02: If it's not commercial speech, the DTPA does not apply, could not apply either because it would violate the First Amendment. [00:10:19] Speaker 02: And so given that, [00:10:21] Speaker 02: there's really no way to conclude that this action was brought in good faith. [00:10:26] Speaker 02: It is fully objectively meritless. [00:10:27] Speaker 02: And that also holds true if you look at the individual counts in the actual complaint against Yelp. [00:10:34] Speaker 02: And so I think in these respects, it closely mirrors the recent case in the Fifth Circuit, the Netflix case. [00:10:42] Speaker 02: That case concerned, there was a somewhat controversial Netflix film called Cuties that some people believe involved child pornography. [00:10:52] Speaker 02: A single Texas prosecutor brought suit. [00:10:55] Speaker 02: And after Netflix raised a First Amendment issue, he then multiplied the indictment, brought four separate claims against Netflix. [00:11:06] Speaker 02: And the Fifth Circuit said that there was a mosaic of circumstantial evidence that established that that action was brought in bad faith. [00:11:14] Speaker 02: And it didn't hold that the suit itself was objectively meritless, but it said one of the four [00:11:21] Speaker 02: indictments, one of the four counts against Netflix, was clearly foreclosed because it alleged that there was child pornography associated with an actress who was verifiably over 18. [00:11:31] Speaker 02: So that was one factor. [00:11:32] Speaker 02: A second factor was that no other prosecutor nationwide had brought any similar action against Netflix. [00:11:40] Speaker 02: That's also the case here. [00:11:41] Speaker 02: No other attorney general, no other prosecutor has challenged Yelp's use of these CBCs in any sort of court action. [00:11:48] Speaker 02: And then third was the timing of the suit. [00:11:50] Speaker 02: that was brought after Netflix asserted its First Amendment rights. [00:11:54] Speaker 02: That's again, the timing here is similarly suspicious in that Yelp took down its notice, six months passed, and then finally, after Attorney General Paxton returned from impeachment, without any investigation having been conducted, his first action was to announce this lawsuit against Yelp in Texas. [00:12:16] Speaker 02: So I think that the circumstances here closely parallel those in Netflix. [00:12:20] Speaker 02: And so again, turning to the actual complaint here in Texas, there's four separate counts under the DTPA, and three of them obviously are inapplicable. [00:12:30] Speaker 02: So the first two are under subsections B2 and B3, and they involve causing confusion or misunderstanding as the source, sponsorship, approval, or certification of goods or services. [00:12:42] Speaker 02: Yelp hasn't done anything like that. [00:12:43] Speaker 02: That's essentially a trademark infringement type claim where there's a question as to whether a product is from one entity or another. [00:12:52] Speaker 02: Yelp has done nothing of the sort that could possibly violate that provision. [00:12:57] Speaker 00: I have a question about the standard. [00:13:01] Speaker 00: The no expectation of success prong of bad faith. [00:13:04] Speaker 00: Do you see that as coextensive with rule 11? [00:13:07] Speaker 02: I think it's probably similar to Rule 11. [00:13:09] Speaker 02: I think the slight difference, I don't know that it needs to be so frivolous as to warrant sanctions, but because the other sort of, there can be this mosaic circumstantial type evidence of bad faith that also contributes to the conclusion that it's objectively meritless and was brought without a reasonable expectation of success. [00:13:27] Speaker 00: But I guess sort of parsing your answer, then you think it's something a little less [00:13:31] Speaker 02: We would say it's a little less, or at least, certainly if a lawsuit is frivolous in the Rule 11 sense, that would be objectively meritless and that would establish bad faith. [00:13:40] Speaker 02: We think there's sort of a, that it could be a little less than the Rule 11 sanctions standard if there's other evidence suggesting bad faith and that it was not actually brought to secure a valid section. [00:13:51] Speaker 00: Has Yelp sought sanctions in the Texas case? [00:13:54] Speaker 02: No, Your Honor, Yelp is simply, I don't know exactly what the term is in Texas, but it's moved to dismiss for lack of personal jurisdiction. [00:14:01] Speaker 02: It's entered a special appearance, so it hasn't done anything other than seek to dismiss for lack of personal jurisdiction. [00:14:08] Speaker 02: So again, I recognize, Your Honor's question, that it's an exceptional case that could satisfy the bad faith standard, but that we submit that those circumstances are met here. [00:14:18] Speaker 00: So picking up on a point that Judge Press raised, I mean, given the nature of the cases that we see on this court with frequency, [00:14:27] Speaker 00: I mean, it's not out of question for me to expect that if something like this works, then we're going to see a case brought by folks in California challenging the attorney general in California for enforcing gun laws or something like this in a parallel circumstance. [00:14:45] Speaker 00: So I'm curious. [00:14:47] Speaker 00: I guess I'm not clear what you think the limiting principle is if your theory here works. [00:14:53] Speaker 00: And I'm thinking about that because the Supreme Court, in setting out the exceptions to younger, was really clear that these are limited exceptions. [00:15:01] Speaker 00: And so if your theory works, how do we keep the bad faith exception to be limited? [00:15:08] Speaker 02: Your Honor, the standard is high. [00:15:10] Speaker 02: We don't deny that. [00:15:11] Speaker 02: But again, an objectively meritless suit, that itself is a high standard to me. [00:15:15] Speaker 02: It's only rarely met. [00:15:16] Speaker 02: It's met here because, again, both the First Amendment and Texas law preclude the actions being brought against Yelp. [00:15:23] Speaker 02: But I'm not aware of many other circumstances in which a [00:15:26] Speaker 02: a prosecutor or attorney general would bring a claim of this sort that is objectively meritless. [00:15:31] Speaker 02: And then that's coupled, again, with the ample circumstantial evidence of bad faith. [00:15:35] Speaker 02: Again, you don't normally have a prosecutor or an attorney general putting out a statement that accompanies a prosecution, calling out the CEO of the company for setting forth statements regarding abortion that are fully First Amendment protected, and they're not even the subject of the lawsuit. [00:15:53] Speaker 02: I think that is sort of the real exceptional circumstance here. [00:15:57] Speaker 02: And it's that sort of evidence that could warrant a finding of bad faith. [00:16:01] Speaker 02: So it won't be the sort of the mind run of prosecutions that are based on speech or that, you know, otherwise. [00:16:08] Speaker 04: Although there are plenty of motions to dismiss various claims brought by attorneys general. [00:16:16] Speaker 04: that cites state equivalents of 12b6, which says, as a matter of law, this claim fails. [00:16:25] Speaker 04: It is objectively meritless, because as a matter of law, this claim fails. [00:16:31] Speaker 04: That is routine. [00:16:33] Speaker 02: I think what we're arguing here is it goes well beyond sort of the 12b6 Twombly type standard. [00:16:39] Speaker 02: There's just obviously no way that this Texas action could proceed. [00:16:42] Speaker 02: Again, there's [00:16:43] Speaker 02: four counts, three of them, they are simply categorically inapplicable to Yelp's consumer warning. [00:16:49] Speaker 02: And the third one, the only one they're actually, excuse me, the fourth one, the only one they're actually citing here is whether it causes confusion or misunderstanding as to affiliation, connection or association with or certification by another. [00:16:59] Speaker 02: Again, none of these provisions could have any possible application. [00:17:03] Speaker 04: Although, of course, the district court disagreed with you. [00:17:07] Speaker 02: What the district court said, the district court didn't look at the actual language of the DTPA. [00:17:12] Speaker 02: The district court didn't consider the First Amendment at all. [00:17:13] Speaker 02: The district court simply said that perhaps these statements could be considered misleading. [00:17:18] Speaker 04: Well, I mean, but basically your claim is objectively unreasonable, thoughtful district judge disagrees with you. [00:17:27] Speaker 02: Well, no, Your Honor, the district court didn't consider sort of the key factors that actually foreclose this claim. [00:17:32] Speaker 04: So even assuming you have speech. [00:17:33] Speaker 04: The district judge, in your view, just got it wrong. [00:17:37] Speaker 02: Well, yes, Your Honor. [00:17:38] Speaker 04: So his decision was objectively unreasonable. [00:17:41] Speaker 02: Well, no, Your Honor, the district court recognized that we were very close to the line of bad faith, and she was incorrect in concluding that we had it wrong. [00:17:49] Speaker 04: Sorry, she was objectively unreasonable. [00:17:51] Speaker 04: This was Judge Freeman, right? [00:17:53] Speaker 02: It was Judge Thompson. [00:17:54] Speaker 02: Judge Thompson, sorry, got it all wrong. [00:17:56] Speaker 02: That's all right, Your Honor. [00:17:57] Speaker 02: But the point is not, no, she was not objectively unreasonable. [00:18:00] Speaker 02: She recognized that this lawsuit likely has relatively little merit, and she recognized that there was substantial evidence of bad faith. [00:18:09] Speaker 02: She seemed to focus on the fact that our evidence was circumstantial, and she said it was therefore not concrete. [00:18:16] Speaker 04: But that's not the- Well, she also said whether the first notice is true or misleading is open to interpretation. [00:18:21] Speaker 02: Yes, Your Honor, but even if that's right, we submit that's wrong, but even if that's right, it doesn't answer the question of whether the suit is objectively meritless because it's clearly foreclosed by the First Amendment. [00:18:30] Speaker 03: Can I ask you quickly, the district court applied the test, you know, facially meritless? [00:18:34] Speaker 03: Yes, Your Honor. [00:18:35] Speaker 03: Do you agree that's a sensible test? [00:18:36] Speaker 03: You just think you meet it or do you disagree with the test? [00:18:39] Speaker 03: We think we meet that test, Your Honor. [00:18:41] Speaker 03: But that's one of the two possible tests for showing that. [00:18:43] Speaker 03: No, I understand that, but how about on this objectively unreasonable, you know, the [00:18:47] Speaker 03: the merits of the lawsuit and whether they're frivolous or whatever we're going to label this. [00:18:51] Speaker 03: Do you think facially meritless is a fair way to describe that? [00:18:54] Speaker 02: Yes, Your Honor. [00:18:54] Speaker 03: I think facially meritless is a fair way to describe it. [00:18:57] Speaker 02: This Court has no further questions. [00:18:58] Speaker 02: I reserve the remainder of my time for a bottle. [00:19:00] Speaker 02: All right. [00:19:15] Speaker 01: Thank you. [00:19:17] Speaker 01: I apologize for my voice. [00:19:18] Speaker 01: Judge Bennett, Lenora Pettit for Attorney General Paxton and may it please the court. [00:19:24] Speaker 01: It was Yelp's burden to prove bad faith. [00:19:26] Speaker 01: and as the district court properly found, as Judge Bennett just noted, that the truth of their 2022 descriptions of crisis pregnancy centers was open to interpretation. [00:19:37] Speaker 01: They can't meet that burden by speculating as to the subjective motivations behind the Texas Attorney General's underlying fraud claims. [00:19:45] Speaker 01: Since we haven't heard anything else from Yelp today, [00:19:48] Speaker 01: We respectfully suggest that the easiest way to resolve this appeal is to affirm the district court's dismissal under Younger. [00:19:55] Speaker 01: In the alternative, the court should hold that California is not the appropriate place to be litigating the merits of the Texas Attorney General's efforts to enforce Texas law in Texas. [00:20:06] Speaker 01: Starting with a number of the comments, since there doesn't seem to be a dispute that the general standard for Younger has been met here, [00:20:14] Speaker 01: Unlike the last case that we heard this morning, they start turning to a number of the bad faith claims. [00:20:20] Speaker 01: And I've heard a lot of conflating two different concepts. [00:20:23] Speaker 01: And Judge Bress, I think this goes to your point at the end about the standard between objective between the claim that is being brought and objectively bad faith or object or facially invalid and one that is brought for a retaliatory purpose. [00:20:36] Speaker 01: Respectfully, in this particular context, those two topics often merge. [00:20:41] Speaker 01: because as their primary authority, the Wilson case on page 1388 of that decision, noted that there is a difference between lawful deterrence [00:20:53] Speaker 01: and retaliation. [00:20:54] Speaker 01: And the difference between those two is often, and I would respect almost always, about whether or not you have an objectively reasonable basis to bring this claim. [00:21:03] Speaker 04: So counsel, whatever the test for that part that we adopt, objectively reasonable or something similar to that, let's assume that the particular state actor in this case, General Paxton, [00:21:19] Speaker 04: But let's say there was strong evidence that the reason the state actor brought the suit was because the business that they were suing had contributed to his political opponent. [00:21:37] Speaker 04: Would that work? [00:21:39] Speaker 01: I respectfully would suggest it probably would not, but I would need to know some more about the facts of that particular allegations. [00:21:45] Speaker 04: What about if it was brought because of the race of the business owner? [00:21:52] Speaker 01: That gets into a very tricky question, and the reason why I need more facts about this is because there are instances, and race I think would be an instance where that would be inappropriate, a number of this court's sister circuits have said. [00:22:06] Speaker 01: But the problem that I see here gets into questions of immunity. [00:22:10] Speaker 01: that haven't really been briefed here. [00:22:11] Speaker 01: And it goes to questions of malicious prosecution. [00:22:15] Speaker 01: And I point this court to the Neves decision from the Supreme Court from a few years ago and the Gonzales case that followed up on it that acknowledged that there are times when First Amendment protected activity can be legitimate considerations in determining whether to pursue someone. [00:22:30] Speaker 01: And so therefore that particular case required, typically speaking, there to be no probable cause because that one involved an arrest as opposed to a lawsuit. [00:22:42] Speaker 01: But I would suggest that that's relatively similar to . [00:22:45] Speaker 01: . [00:22:45] Speaker 01: . [00:22:46] Speaker 04: What if, to pick up on one of Judge Forrest's questions, what if the lawsuit [00:22:51] Speaker 04: was brought, and there was clear evidence of it because the entity involved was a vocal supporter of Second Amendment rights, and the Attorney General decided [00:23:07] Speaker 04: You know, we never bring these cases. [00:23:09] Speaker 04: Yeah, it's objectively reasonable, but there was strong evidence that the Attorney General only brought the case because the entity had supported Second Amendment rights. [00:23:23] Speaker 01: And then I would think this court would... Does that work? [00:23:25] Speaker 01: I believe it would, under that set of facts. [00:23:28] Speaker 01: And I would point this court to the Gonzalez against Trevino case that I just mentioned that talks about the exception to the rule that you need to have the probable cause for retaliatory arrest claim, which goes to... And my friend complained about the phrase, concrete, the phrase that the U.S. [00:23:44] Speaker 01: Supreme Court has suggested is objective. [00:23:46] Speaker 01: And there, if there is a close comparator that did not involve in a, that was not involved in a First Amendment claim who was First Amendment protected or in that instance Second Amendment protected activity that was not prosecuted for the same activity, then that would be evidence of retaliation and an improper motive. [00:24:04] Speaker 01: We lack that here because as both of the Attorney General and Yelp admitted to the District Court, [00:24:10] Speaker 01: And I would point this court to page 29 and 31 of the excerpts of the record. [00:24:16] Speaker 01: This is a unique case. [00:24:17] Speaker 01: There are no similarly situated individuals, so there isn't that objective evidence that allows us to get past the presumption of prosecutorial regularity. [00:24:25] Speaker 01: Instead, to the contrary, [00:24:27] Speaker 01: My friend noted the mothers and unborn children's case from 1988. [00:24:32] Speaker 01: When crisis pregnancy centers were holding themselves out as abortion clinics, which was the facts of that case, the attorney general did in fact prosecute them. [00:24:40] Speaker 01: And that is the only comparator they pointed to. [00:24:42] Speaker 01: And I think that's particularly important in responding to a number of my friend's arguments about whether or not this is commercial speech within the definition of the DTPA as well as the First Amendment. [00:24:55] Speaker 01: To start with, the fact that we're sitting here debating about the meaning of Texas provision goes to our personal jurisdiction argument about why this should be litigated in Texas. [00:25:03] Speaker 01: But leaving that aside for a moment, the mothers and unborn children's decisions found that the type of activity at crisis pregnancy centers was commercial in nature for the purposes of Texas state law. [00:25:15] Speaker 01: And what is good for the goose is good for the gander. [00:25:17] Speaker 01: If Yelp is talking about the types of activities that were commercial, then it is commercial speech for the purpose of the DTPA. [00:25:25] Speaker 01: And I don't hear them to be challenging it. [00:25:27] Speaker 01: And to the contrary, I hear them to be relying upon that decision. [00:25:30] Speaker 01: It's also consistent with the First Amendment under Central Hudson, and I would point this court to, I believe it's page 531 of that decision, where it's talking about the economic interests of the people involved. [00:25:40] Speaker 01: And my friend, immediately after saying it doesn't meet the definition for commercial interest, starts talking about how his client is talking about the products of another. [00:25:50] Speaker 01: That is the economic interest of another. [00:25:52] Speaker 01: It doesn't become any less commercial just because Yelp is disparaging [00:25:56] Speaker 01: somebody else's products just because they aren't proposing a transaction of their own, as I believe the way that his test was running. [00:26:05] Speaker 01: So it is commercial for both the First Amendment and the Texas law perspective. [00:26:12] Speaker 01: which gets us to the question about whether or not it is open to interpretation. [00:26:16] Speaker 01: And we think that it was misleading. [00:26:19] Speaker 01: And my friend also pointed to the fact that we said it was literally true. [00:26:23] Speaker 01: The actual full text of that sentence is literally true, at least as to some of them. [00:26:28] Speaker 01: And that's really what's problematic about a lot of what's going on in this case, is they made a generalized statement about a [00:26:36] Speaker 01: spectrum of businesses and they put it on every single businesses page even when that one of those businesses came back and said what you're saying about me is not true. [00:26:46] Speaker 01: And that particular business complained to the Texas Attorney General. [00:26:49] Speaker 01: The Texas Attorney General looked into the issue as the District Court found. [00:26:53] Speaker 01: Now, the District Court, who is very clearly far from sympathetic to my client, acknowledged that it was a thin investigation, but unlike what my friend just said, not a nonexistent one, which satisfies whether or not this was brought in bad faith. [00:27:06] Speaker 01: There was an investigation here. [00:27:08] Speaker 01: It was [00:27:13] Speaker 01: brought about statements that are open to interpretation, and it was brought in a larger context that I think is important in analyzing the bad faith question. [00:27:23] Speaker 04: Was the district court right that the only evidence was that the state corresponded with only one or two CPCs? [00:27:32] Speaker 01: The only evidence that's currently in the record is the declaration of Mr. Hanlon in which he described how he communicated with those particular entities and that comes to a very tricky question and it goes to a number of the questions the court asked about the implications of Yelp's argument. [00:27:48] Speaker 01: Because to describe much more than what Mr. Hanlon put in here gets into really tricky privilege questions. [00:27:53] Speaker 01: And if this court is going to start asking every time a state attorney general brings a fraud lawsuit, what their evidence is going in, it's going to be an inquiry that's never going to end. [00:28:04] Speaker 01: And respectfully to my friend, this is the second time I've argued one of these cases in a month. [00:28:08] Speaker 01: They're a lot more common than he seems to think. [00:28:11] Speaker 01: And if this court were to accept, particularly to allow wide ranging discovery on allegations like this, [00:28:17] Speaker 01: You're never going to finish. [00:28:19] Speaker 03: What's the other case you're referencing that you argued this month? [00:28:22] Speaker 01: Media Matters in the DC Circuit, which is the equivalent of the Twitter case that I heard you guys talking about a few minutes ago. [00:28:28] Speaker 01: But any time a fraud, because the question of whether or not it is retaliation for a First Amendment protected activity and whether or not it is deterrence of fraud is a very close question of fact in many instances. [00:28:43] Speaker 01: It is a question that would, that it is an allegation that could be made in any case. [00:28:49] Speaker 01: And that's why the Neves Court set such a high standard in a retaliatory arrest context, which we suggest ought to be at least as high in retaliatory prosecution, which is effectively what they're asserting. [00:28:59] Speaker 03: Is the media matter just because, you know, when someone raises what's pending in another court, I'm always trying to make sure there's not some other lawsuit out there that's relevant to what we're doing. [00:29:08] Speaker 03: Is that case of all the civil investigative demand, like a request for documents, just like in Twitter versus Paxton? [00:29:14] Speaker 01: Yes, Your Honor. [00:29:15] Speaker 03: Okay, so it's a little different than what we have here? [00:29:16] Speaker 01: Yes, it is a little different in the sense that we have not yet gotten to the lawsuit aspect of it. [00:29:21] Speaker 01: And then that's, so the younger did not apply there. [00:29:24] Speaker 01: It's a very, very close analog to Twitter. [00:29:27] Speaker 01: But the same general allegations are present, which is that the attorney general doesn't like something I said in public, and so therefore he's retaliating against me as opposed to [00:29:38] Speaker 01: The attorney general is, and that's the plaintiff's allegation. [00:29:42] Speaker 01: Our allegation is, you said something that was fraudulent in public, and therefore we are bringing a fraud claim against you. [00:29:48] Speaker 01: And those are two very, very similar things that get into difficult questions of fact. [00:29:52] Speaker 01: And why this and the federalism concerns that are behind the younger line of decisions say that the Texas courts should be the ones who should be resolving those questions, as long as the plaintiff has a legitimate, reasonable way to raise them. [00:30:06] Speaker 01: And as Your Honor pointed out, they do. [00:30:07] Speaker 01: They're actually succeeding at the moment in Texas. [00:30:10] Speaker 01: We think that the trial court has misapplied Texas law. [00:30:14] Speaker 01: And I would like to clarify one thing. [00:30:16] Speaker 01: The fact that this is a one-sentence order in the Texas trial court is not an indication about whether the trial court thought this case was frivolous. [00:30:23] Speaker 01: And they did not actually allege the lack of personal jurisdiction as a basis for their younger argument. [00:30:30] Speaker 01: A one-line sentence order like this is common in state court. [00:30:33] Speaker 01: In fact, it's very rare to actually get a reasoned opinion. [00:30:37] Speaker 01: So it just says that the court concluded there was no personal jurisdiction. [00:30:45] Speaker 01: Going back to the deterrence versus retaliation, Younger stated on, I think it's about page 43 of its opinion, that the standard or that the exceptions need to be rare because our federal system depends on the notion that the state and the federal government are different sovereigns and the system works better when they can pursue their own actions and their own processes without interference with each other. [00:31:13] Speaker 01: The allegations that Yelp brought here can be brought in most other cases, and tellingly, a lot of their cases that they cite to show that this is bad faith all start with the presumption that the speech at issue is true. [00:31:26] Speaker 01: That is true for Bartnicki. [00:31:28] Speaker 01: That is true for Daily Mail. [00:31:30] Speaker 01: It is true for quite a few of their other cases, actually. [00:31:35] Speaker 01: those are just in opposite because our dispute here is where or not where you should be litigating the question about whether they're true. [00:31:44] Speaker 01: And under Younger we submit that question is Texas. [00:31:48] Speaker 01: We also submit that that question is Texas for personal jurisdiction reasons because as this court has recognized in a number of different instances including Thomas P. Gonzalez that the simple sending of a letter is [00:32:02] Speaker 01: is insufficient to establish personal jurisdiction. [00:32:05] Speaker 01: In their reply, Yelp responded, well, it's not just a letter, it's also a lawsuit. [00:32:09] Speaker 01: But there are a lot of different doctrines that that is going to run smack into, for example, Nora Pennington, the Anti-Injunction Act, Younger itself, if you're all of a sudden establishing personal jurisdiction based on something that's immediately going to implicate abstention. [00:32:23] Speaker 01: Plus, it's not actually all that different for the purposes of the chill. [00:32:28] Speaker 01: And this goes back to the Twitter and the Media Matters cases because the chill can be alleged if we send a CID or if not. [00:32:34] Speaker 01: In fact, they complained that they were chilled because we sued them without sending a CID. [00:32:38] Speaker 01: So we're sort of damned if we do and damned if we don't. [00:32:41] Speaker 01: So unless the court has any particular questions on the personal jurisdiction, I'm just going to touch one point on the timing issue that my friend [00:32:49] Speaker 01: made a big deal of about the fact that this was right after General Paxton was acquitted from his impeachment. [00:32:55] Speaker 01: And their own timeline doesn't work. [00:32:58] Speaker 01: They point to the fact that Mr. Hanlon said that he knew on September 1st of last year that we were going to sue. [00:33:06] Speaker 01: Well, Attorney General Paxton was legally unable to make any decisions on behalf of Texas on September 1st because he was not acquitted until September 16th and was suspended from performing his duties. [00:33:17] Speaker 01: So they complain that if this were really a real investigation, Attorney General Colmanaro would have continued it. [00:33:26] Speaker 01: It appears based on their theory that she did. [00:33:29] Speaker 01: But the most important thing here is that we're sitting here speculating about why and who did what. [00:33:37] Speaker 01: And that is not sufficient to bring this case within the narrow confines of the younger exemption. [00:33:43] Speaker 03: Mr. Siegel referenced a few times [00:33:44] Speaker 03: Attorney General Paxson's press release. [00:33:46] Speaker 03: Do you want to address that? [00:33:47] Speaker 01: Certainly, Your Honor. [00:33:48] Speaker 01: So the press release very, very strongly stated that the Texas Attorney General's office recognized the CEO's ability to and right to say whatever he wants about abortion. [00:34:00] Speaker 01: And as my friend acknowledged, that statement isn't the basis of this lawsuit. [00:34:04] Speaker 01: It was just a statement in a press release. [00:34:06] Speaker 01: What the press release also says is that what he cannot do is to lie about these facilities. [00:34:14] Speaker 01: and we have alleged that they have done so, that they have made misleading statements both that are actually literally false as to facilities that have medical care and misleading as to others, and that is the basis of our lawsuit. [00:34:28] Speaker 01: And I can go into really briefly why we think that those are misleading, including the fact that literally every gynecological clinic would appear to lack [00:34:37] Speaker 01: provide limited medical services under the definition Yelp's putting forward, because about the same time that they issued their original notice, the so-called trigger brand in Texas went into effect, and so nobody can provide abortion. [00:34:48] Speaker 01: So if providing abortion is necessary to provide medical services, nobody's doing it, and that can't really be true. [00:34:57] Speaker 01: But by putting these particular statements on the pages of facilities of CPCs, [00:35:03] Speaker 01: They're saying CPCs are doing something other than not providing abortion, and that's misleading, if not entirely false. [00:35:12] Speaker 01: There are no other questions. [00:35:13] Speaker 01: We respectfully request you affirm. [00:35:14] Speaker 04: Thank you. [00:35:21] Speaker 04: Counsel will give you two minutes. [00:35:23] Speaker 02: Thank you, Your Honor. [00:35:23] Speaker 02: So just a few points. [00:35:24] Speaker 02: First, on the objectively meritless question, so I took counsel's argument to be what's good for the goose is good for the gander. [00:35:33] Speaker 02: That's their take on commercial speech. [00:35:34] Speaker 02: And effectively, that because Yelp's speech affected the commercial interests of CPCs, that makes it commercial speech. [00:35:42] Speaker 02: That's so far removed from the actual doctrine on commercial speech that it, again, confirms the objective meritlessness of this suit. [00:35:49] Speaker 02: That CPCs advertisements are commercial speech. [00:35:52] Speaker 02: is well established, that Yelp's statements about the product of another provider are not commercial speech is also well established. [00:36:01] Speaker 02: It's the Bose case, Lowe, this court's decision, IMDB. [00:36:05] Speaker 02: There's just any number of cases that foreclose that as a matter of clearly established First Amendment law. [00:36:10] Speaker 02: It's a federal question. [00:36:10] Speaker 02: The federal courts are certainly [00:36:12] Speaker 02: well qualified to hear and decide. [00:36:15] Speaker 02: Second, on the question of whether this was retaliatory, I heard counsel acknowledge that if there was evidence that similarly situated individuals are treated differently, that would be basis for finding retaliatory motive for what there is, and we've cited in our brief that [00:36:28] Speaker 02: When Attorney General Paxton agrees with the speech of parties, like he did in the 303 Creative case, where he submitted an amicus brief, arguing that simply because the purveyor of a website had a commercial interest in selling those websites didn't make it unprotected speech. [00:36:42] Speaker 02: He makes that argument. [00:36:43] Speaker 02: He knows that that law is out there. [00:36:45] Speaker 02: But nevertheless, when Yelp does the same sort of speech, he condemns it and seeks to bring a state court action. [00:36:50] Speaker 02: That, again, confirms the retaliatory motive here. [00:36:53] Speaker 02: And at the very least, even if the evidence submitted by Yelp in the district court proceeding didn't clearly establish the bad faith of this action, it was at least enough to withstand a motion to dismiss to entitle Yelp to discovery. [00:37:07] Speaker 02: Again, this court's decisions in Laub and other similar cases make clear that when there's controverted facts, facts that if proven could actually lead to a conclusion of bad faith, discovery is warranted. [00:37:19] Speaker 02: So counsel in her argument even referenced some of those facts that could be warranted for discovery here, including sort of the nature of the decision making with respect to the investigation. [00:37:29] Speaker 02: There's a single declaration in the record here from Hanlon in which he says at some point in the beginning of September he was informed [00:37:37] Speaker 02: that the prosecution against Yelp would go forward. [00:37:39] Speaker 02: It's not really clear who informed him or why. [00:37:41] Speaker 02: It certainly is indicative of bad faith that the person who was purportedly doing the investigation was not even aware of whether that investigation had led to anything or would result in an actual prosecution against Yelp. [00:37:55] Speaker 02: If the court has no further questions, we ask that it reverse. [00:37:58] Speaker 04: I thank counsel for their arguments and the case just argued is submitted. [00:38:02] Speaker 04: With that, we are done for the day.