McKenna said unless Congress makes changes to that federal rule, an appeal to uphold the state law would have been lengthy and costly.
"We disagree with Judge Martinez," McKenna said in a statement. "We do not believe that advertisements for a service illegal in every state — prostitution — are protected by the Constitution. That part of his decision would likely be overturned upon appeal."
Contrary to McKenna's statement, prostitution is legal in Nevada in licensed brothels.
As part of the settlement, Washington state will pay $200,000 to cover legal fees of Backpage.com and the Electronic Frontier Foundation.
Phoenix-based Village Voice Media Holdings LLC owns Backpage.com. It also owned free arts weekly newspapers across the country, including New York's Village Voice and the Seattle Weekly, but the newspapers were sold to a separate company earlier this year.