By Khorri Atkinson

Law360 (May 17, 2021, 10:42 PM EDT) -- A coronavirus-tracking app developer rebuked a New Hampshire federal court for granting Apple's bid to transfer a case accusing it of violating antitrust law by barring the app from its store, arguing Saturday that the decision "is unacceptable and warrants immediate reversal."

Coronavirus Reporter filed a four-page motion for reconsideration a day after the court agreed with Apple that the case belongs in the Northern District of California. The order stated in part that Coronavirus Reporter had conceded that before it submitted its application to Apple for distribution through the App Store, it entered a legal agreement that said litigation between the parties must take place in the Northern District of California.

In Saturday's filing, Coronavirus Reporter took issue with the court construing its first amended complaint as its operative pleading and for denying its second amended complaint. The court said Coronavirus Reporter did not seek leave or ask for Apple's consent, as required under Federal Rule of Civil Procedure, to file a second amended complaint.

Because the April 26 second amended complaint "contains plaintiff's most fully developed account of the facts underlying its claims," the court said it did consider the developer's claims "in stating the factual background." But Coronavirus Reporter ripped into that decision, saying the court should have gone further than accepting mere facts from the second complaint because under the Federal Rules of Civil Procedure, "an amended pleading is an absolute right once as a matter of course, so long as it is filed within 21 days after service of a motion under Rule 12."

"Plaintiffs timely filed the [second amended complaint] after being served with a 12(b)(6) motion," the filing contended. "Plaintiffs had filed the [first amended complaint] with leave from the court, and as such, had never exhausted their right to file once as a matter of course."

The developer reinforced its argument by citing the Ninth Circuit's 2015 holding in Ramirez v. County of San Bernardino suggests that "a party does not need to exhaust the right to file an amended complaint once as a matter of course under Federal Rule of Civil Procedure (FRCP) 15(a)(1) before amending based on the opposing party's written consent or leave of the court under FRCP 15(a)(2). No specific sequence is required for amendment Under FRCP 15(a)."

Coronavirus Reporter further maintained it never signed a forum selection clause and that the second amended complaint removed "an erroneously-construed statement" indicating it had.

Another debate over whether Coronavirus Reporter has standing to bring its complaint remains to be decided.

The district court noted in Friday's ruling that Apple offers evidence that the Coronavirus Reporter app was developed, not by the plaintiff, but rather by Calid Inc. In its original suit filed in January and its first amended version, Coronavirus Reporter said it had done business under the name Calid, according to court papers. The developer conceded it executed license and developer agreements with Apple, but it did not specify under what name it did so, court papers said.

The district court said it's unclear "as a factual matter whether it was plaintiff or Calid that developed the app and submitted it to Apple as a candidate for distribution through the App Store."

"Further complicating the issue, the license agreement contains a provision prohibiting assignment of a developer's rights and obligations under the agreement absent Apple's advance written consent," the court said. "There is therefore an open question as to whether plaintiff is the real party in interest with standing to bring this action. This question will require resolution prior to determination of the merits of plaintiff's claims."

For the purposes of resolving the motion to transfer, the court said it had to assume the truth of the plaintiff's claims that it developed and submitted the app to Apple in March 2020 for possible distribution, was harmed by the complained-of conduct, and has standing to bring its claims.

Coronavirus Reporter had also argued, among other things, that because it claimed that Apple engaged in anti-competitive behavior, the court should presume that the forum selection clause was the product of fraud or overreaching and that juries in California would be reluctant to issue a verdict against Apple due to the company's influence on the local economy.

But the court on Friday rejected these claims. It said the developer cited "no cases in support of the proposition that allegations of conduct in violation of the Sherman Act constitute sufficient ground, without more, for deeming a forum selection clause unenforceable. "

"Courts to have considered the question have squarely rejected that theory," the order said, citing the Second Circuit's 2011 holding in TradeComet.com v. Google and 1982 ruling in Bense v. Interstate Battery Systems . "Plaintiff's speculation falls well short of meeting its 'heavy burden' to make a 'strong showing' that the forum selection clause should be set aside on grounds of unreasonableness or injustice."

Counsel for the parties did not immediately reply Monday to request for comment on the court's ruling and Coronavirus Reporter's motion for reconsideration.

The developer's lawsuit claims there was "no good reason" for Apple to block its app from being made available in the App Store just as the virus was beginning its deadly march across the country — except that Apple knew it had its own application in the pipeline.

The rejection, according to the suit, was couched in Apple's decision to permit coronavirus-related applications from only "recognized institutions such as government, hospital, insurance company, NGO, or a university." Apple purportedly found the Coronavirus Reporter app lacked "deeply rooted medical credentials," despite the developer's chief medical officer being Robert Roberts, inventor of "the gold-standard test" for detecting heart attacks and head NASA cardiologist during the Space Race.

The lawsuit includes a claim that Apple violated Section 1 of the Sherman Act, which bars unreasonable agreements to restrain trade, but Apple said Tuesday that those allegations are based on its own, independent actions and not some concerted activity.

In a recent filing, Apple said it had to ensure coronavirus-related apps were reliable and safe at the onset of the pandemic, and that it was not trying to suppress competition by refusing to offer Coronavirus Reporter in its App Store. The tech giant also asserted that the Sherman Act claims failed because the developer does not describe the market Apple is accused of having power over.

Coronavirus Reporter is represented by Keith Mathews of Associated Attorneys of New England.

Apple is represented by Kevin M. O'Shea and Allyson L. Moore of Sulloway & Hollis PLLC, and Jessica E. Phillips and Martha L. Goodman of Paul Weiss Rifkind Wharton & Garrison LLP.

The case is Coronavirus Reporter v. Apple Inc., case number 1:21-cv-00047, in the U.S. District Court for the District of New Hampshire.

--Additional reporting by Matthew Perlman, Bryan Koenig and Nadia Dreid. Editing by Adam LoBelia.

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