Jan 30 (Reuters) - Texas Attorney General Ken Paxton must face an ethics lawsuit by state attorney regulators over a case he brought challenging results of the 2020 election, according to a court ruling posted on Monday.

Judge Casey Blair on Friday denied Paxton's bid to dismiss the case on jurisdictional grounds. Blair said he was not ruling on the merits of the case......

The ruling is a setback for Paxton, who had argued that his work as the top Texas state lawyer was beyond the reach of Texas attorney ethics regulators. Potential penalties if the case succeeds could include suspension or disbarment.

The Texas State Bar, an agency that oversees licensed attorneys in the state, filed the lawsuit against Paxton in state court in Dallas last May. The complaint said Paxton made "dishonest" statements in a lawsuit that sought to toss 2020 election votes in four states.