DOJ’s Apple Suit Filed in New Jersey for Friendly Third Circuit

The US Justice Department’s choice of New Jersey to file its landmark antitrust lawsuit against Apple Inc. was likely motivated by driving any future appeals to a circuit court relatively open to cracking down on monopoly power.

Regulators are gearing up for a lengthy battle against the tech behemoth with their complaint last week in US District Court for the District of New Jersey, which targets a range of allegedly illegal practices the iPhone maker has employed to maintain a smartphone monopoly. The lawsuit against Apple is part of the Biden administration’s broader push to use antitrust law to rein in the power of Big Tech companies—an effort whose fate is still tied up in court battles.

The court stands out as a favorable one for the government, antitrust professors and researchers say. That’s because the state is within the jurisdiction of the US Court of Appeals for the Third Circuit, where there’s precedent for plaintiff-friendly rulings in antitrust lawsuits.

The suit, which New Jersey joined along with 14 other states and the District of Columbia, likely wouldn’t reach an appeals stage for a year or more. Apple has vowed to “vigorously” defend itself against the government’s allegations.

See also: Apple Shares Wobble as Antitrust Suit Takes Aim at Growth Pillar

“Historically, the Third Circuit Court of Appeals has been a decent venue, especially when it comes to monopolization cases and monopolistic conduct,” said Daniel Hanley, senior legal analyst at the Open Markets Institute, an anti-monopoly advocacy group.

In another antitrust lawsuit brought by the DOJ, the Third Circuit ruled in 2005 that Dentsply, a manufacturer and supplier of dental supplies, used its exclusive dealing policy to restrict competition with its rivals in violation of the Sherman Act, the bedrock antitrust law. The court similarly upheld a monopolization verdict against consumer goods conglomerate 3M Co. in 2003, a private case also centered on the company’s exclusive dealing arrangements.

This Third Circuit precedent “reaffirms the idea that a monopolist is held to a higher standard” under Section 2 of the Sherman Act, Hanley said. The DOJ’s complaint accuses Apple of Section 2 violations, underscoring the relevance of Third Circuit rulings to the sweeping suit against Apple’s business model.

Other appeals courts, such as the Fifth and Seventh Circuits, have a reputation for being comparatively favorable for defendants in antitrust suits.

“If I were to make a big map, from a plaintiff viewpoint, I’d rather be in the Third,” said Christine Bartholomew, a professor at the University at Buffalo School of Law who teaches antitrust.

‘Blank Canvas’

The Ninth Circuit Court of Appeals is also viewed as relatively friendly toward plaintiffs, antitrust scholars said. And it encompasses California, home to Silicon Valley and Apple’s Cupertino headquarters.

But Fortnite maker Epic Games already brought its high-profile antitrust lawsuit against Apple in the Ninth Circuit, which mostly sided with Apple and rejected Epic’s App Store monopoly claims. Filing another antitrust case against Apple in that same appeals court could work against the DOJ’s interests.

“You may come across judges that are familiar with that case,” Hanley said, referring to the Ninth Circuit’s Epic decision. “You’re not working on a blank canvas.”

The DOJ would rather opt for a court that will look at its Apple suit “with fresh eyes,” Hanley said.

DOJ officials said the agency could have brought the lawsuit in almost any jurisdiction and didn’t try to avoid locations like California or Washington, D.C., another common venue for Washington-based federal regulators. The agency simply looked to file the suit based on where consumers are affected and Apple products are sold, said the officials, who spoke to reporters at a background briefing to provide additional details about the lawsuit.

Geographic Considerations

Subpoena power may have played a role in the New Jersey decision, too, said Roger Alford, a professor at Notre Dame Law School who worked in the Justice Department’s antitrust division.

Under federal civil procedure rules, trial subpoenas are limited to third party witnesses within 100 miles of where the trial takes place. A trial in Newark, New Jersey, court gives the DOJ subpoena power covering all of New York City, which could broaden the evidence the DOJ can bring to court, Alford said.

The DOJ brought its cases against Alphabet Inc.‘s Google—one over online search, the other over advertising technology—in Washington, D.C., and Virginia federal courts, respectively.

“It might be helpful to spread around the jurisprudence,” Hanley, of the Open Markets Institute, added, about the choice of New Jersey. “You don’t want all your eggs in one district basket.”