Case X against Apple, OpenAI remains in Fort Worth, Texas

A judge ordered that the lawsuit filed by X and xAI accusing Apple and OpenAI, which attempt to maintain monopolies in artificial intelligence markets, must remain in federal court in Fort Worth, Texas, despite “minimal ties at best” to that geographic area by one of the companies.

Judge Mark Pittman, in a tongue-in-cheek four-page order issued Thursday, encouraged the companies to move their headquarters to Fort Worth, given their preference for the antitrust lawsuit to be heard there.

In a footnote, he even pointed businesses to the City of Fort Worth’s Business Services Unit website “to begin the process” of relocating there.

Implicit in Pittman’s order is the tendency of some conservative-leaning plaintiffs to file lawsuits in the Fort Worth division of the U.S. Northern District Courts in Texas to increase their chances of winning favorable rulings from the two serving judges, both Republican appointees.

These plaintiffs include Teslaboth controlled by megabillionaire Elon Musk, who until earlier this year was a top adviser to President Donald Trump.

Pittman was appointed by Trump, but has criticized the practice of targeting lawsuits to specific judicial districts, known as forum-shopping.

In his order Thursday, Pittman said the Fort Worth division’s docket is two to three times as busy as the Dallas division’s docket, which has more judges.

Pittman’s order stated that neither Apple nor OpenAI had any close ties to Fort Worth, with the exception of several Apple stores.

“And, of course, by this logic, there is not a district or division in the entire United States that would not be an appropriate venue for this trial,” Pittman wrote.

X Corp. is headquartered in Bastrop, Texas – about 200 miles south of Fort Worth – while Apple and OpenAI are headquartered in California.

“Given the current desire to take place in Fort Worth, the numerous high-stakes trials previously tried by the Fort Worth Division, and the vitality of Fort Worth, the Court strongly encourages the parties to consider moving their headquarters to Fort Worth,” the judge wrote.

“Fort Worth has much more to offer than the unique works of art located on the fourth floor of its historic federal courthouse,” Pittman said.

The judge had asked the three companies to explain why the case should be brought before the Fort Worth court.

But neither Apple nor OpenAI requested that the case be moved before the judge’s Oct. 9 deadline, Pittman noted in the order.

Pittman nevertheless chose to keep the case in the Fort Worth division.

“The fact that none of the defendants has filed a motion to transfer venue constitutes a consideration for the Court,” the judge wrote. “And the Court ‘respect(s)’ Plaintiffs’ choice of venue.”

“But the Court does not make its decision lightly or without reservation. This case contains at best minimal connections to the Fort Worth Division of the Northern District of Texas,” Pittman wrote. “Perhaps one of the strongest arguments made by plaintiffs is the simple fact that ‘Apple sells iPhones (in this division) (and many other products) and OpenAI offers ChatGPT nationwide.'”

“After more than a decade of service presiding over thousands of cases in three different courts, the undersigned continues to believe that ‘(v)enue is not a continental breakfast; you cannot cherry-pick where and how a lawsuit is filed,'” the judge said.

But Pittman noted he had little, if any, choice in deciding to keep the trial at his courthouse.

The 5th U.S. Circuit Court of Appeals, whose jurisdiction includes the Texas federal courts, has raised “the standards for venue transfer to new heights,” Pittman wrote.

Last year, the 5th Circuit twice rejected Pittman’s transfer orders to Washington, D.C., in a lawsuit brought by trade groups representing big banks challenging a rule issued by the Consumer Financial Protection Bureau that capped late fees on credit cards at $8 per month.

The 5th Circuit said the Pittman court “clearly abused its discretion” in trying to move the case forward.

OpenAI declined to comment to CNBC, referring a reporter to its public filings as part of the lawsuit. X and Apple did not immediately respond to a request for comment.

Musk’s X and xAI sued Apple and OpenAI in August, accusing the companies of an “anti-competitive scheme” to maintain monopolies in artificial intelligence markets.

The lawsuit accused Apple of favoring OpenAI’s ChatGPT in its App Store rankings and deprioritizing other competitors, such as xAI’s Grok.

Earlier this month, a Washington, D.C., judge blocked Musk’s request to move the Securities and Exchange Commission’s lawsuit over his alleged improper disclosure of his Twitter stake to Texas. Musk renamed Twitter to X after buying the company.