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A judge ordered that X and xAI’s lawsuit accusing Apple and OpenAI of trying to keep up monopolies in artificial intelligence markets must remain in federal court in Fort Price, Texas, despite “at best minimal connections” to that geographic area by any of the businesses.
Judge Mark Pittman, in a sharply ironic four-page order on Thursday, encouraged the businesses to relocate their headquarters to Fort Price, given their preference for the antitrust lawsuit to be heard there.
In a footnote, he even flagged the businesses to the web site of the Business Services unit of the City of Fort Price “to get the method began” of relocating there.
Pittman’s order implicitly goals on the tendency of some plaintiffs of a conservative bent to file lawsuits within the Fort Price division of the U.S. Northern District of Texas courts to extend their probabilities of winning favorable rulings from the 2 lively judges there, each of whom were appointed by Republicans.
Those plaintiffs have included X and Tesla, each controlled by mega-billionaire Elon Musk, who, until earlier this yr, was a top advisor to President Donald Trump.
Pittman was appointed by Trump, but has been critical of the practice of targeting lawsuits to specific judicial districts, often called forum-shopping.
In his order on Thursday, Pittman said that the Fort Price division’s docket is 2 to 3 times busier than the docket of the Dallas division, which has more judges.
Pittman’s order noted that neither Apple nor OpenAI has a robust connection to Fort Price, apart from several Apple stores.
“And, after all, under that logic, there isn’t a district and division in your entire United States that will not be an appropriate venue for this lawsuit,” Pittman wrote.
X Corp. is headquartered in Bastrop, Texas — roughly 200 miles south of Fort Price — while each Apple and OpenAI are headquartered in California. Musk’s xAI acquired his social media company X in March in an all-stock transaction.
“Given the current desire to have venue in Fort Price, the many high-stakes lawsuits previously adjudicated within the Fort Price Division, and the vitality of Fort Price, the Court highly encourages the Parties to contemplate moving their headquarters to Fort Price,” the judge wrote.
“Fort Price has rather more going for it than simply the unique artwork on the fourth floor of its historic federal courthouse,” Pittman said.
The judge had asked the three corporations to elucidate why the case belonged within the Fort Price court.
But neither Apple nor OpenAI requested that the case be moved before the judge’s Oct. 9 deadline, Pittman noted within the order.
Still, Pittman opted to maintain the case within the Fort Price division.
“The incontrovertible fact that neither Defendant filed a motion to transfer venue serves as a consideration for the Court,” the judge wrote. “And the Court ‘respect[s]’ Plaintiffs’ selection of venue.”
“However the Court doesn’t make its decision calmly or without reservations. This case comprises at best minimal connections to the Fort Price Division of the Northern District of Texas,” Pittman wrote. “Possibly considered one of the strongest points made by Plaintiffs is the mere incontrovertible fact that ‘Apple sell[s] iPhones [in this Division] (and plenty of other products) and OpenAI offer[s] ChatGPT nationwide.'”
“After greater than a decade of service presiding over 1000’s of cases in three different courts, the undersigned continues to feel strongly that ‘[v]enue isn’t a continental breakfast; you can not pick and select on a Plaintiffs’ whim where and the way a lawsuit is filed,'” the judge sniped.
But Pittman noted that he had little, if any, selection in the choice to maintain the suit in his courthouse.
The U.S. fifth Circuit Court of Appeals, whose jurisdiction includes federal courts in Texas, has raised “the usual for transferring venue to latest heights,” Pittman wrote.
Last yr, the fifth Circuit twice slapped down orders by Pittman to transfer to Washington, D.C., a lawsuit by trade groups representing large banks difficult a rule issued by the Consumer Financial Protection Bureau, which capped bank card late fees at $8 per 30 days.
The fifth Circuit said Pittman’s court “clearly abused its discretion” in attempting to move the case.
OpenAI declined to comment to CNBC, referring a reporter to its public filings within the lawsuit. X and Apple didn’t immediately reply to a request for comment.
Musk’s X and xAI sued Apple and OpenAI in August, alleging the businesses of an “anticompetitive scheme” to keep up monopolies in artificial intelligence markets.
The lawsuit accused Apple of favoring OpenAI’s ChatGPT on its App Store rankings and deprioritizing other competitors, similar to xAI’s Grok.
Earlier this month, a judge in Washington, D.C., blocked Musk’s request to maneuver the Securities and Exchange Commission’s lawsuit over his alleged improper disclosure of his stake in Twitter to Texas. Musk renamed Twitter to X after purchasing the corporate.
