In Danziger & De Llano, LLP v. Morgan Verkamp LLC, the US Court of Appeals for the Third Circuit held, in an issue of first impression, that removal to federal court does not waive any available FRCP 12(b) defenses or objections.
On January 15, 2020, in Danziger & De Llano, LLP v. Morgan Verkamp LLC, the US Court of Appeals for the Third Circuit held, in an issue of first impression, that removal to federal court does not waive any available FRCP 12(b) defenses or objections. ( (3d Cir. Jan. 15, 2020)).
Danziger & De Llano, LLP, a Texas law firm, sued Morgan Verkamp LLC, an Ohio law firm, in Pennsylvania state court, alleging breach of a case referral agreement. Morgan Verkamp removed the case to the US District Court for the Eastern District of Pennsylvania and then moved to dismiss for lack of personal jurisdiction. The district court granted the motion and dismissed the complaint with prejudice.
Danziger appealed, arguing, among other things, that Morgan Verkamp waived any objection to personal jurisdiction by participating in pre-complaint discovery and not raising lack of personal jurisdiction before removing federal court. The US Court of Appeals for the Third Circuit affirmed the district court, holding that Morgan Verkamp did not waive its objection to personal jurisdiction by taking part in pre-complaint discovery because it could not challenge personal jurisdiction until after Danzinger filed its complaint. The Third Circuit also held that the act of removal itself did not waive the lack of personal jurisdiction defense, joining the US Courts of Appeals for the First, Second, and Eighth Circuits. The court explained that a defendant removing a case to federal court brings its defenses with it, because federal jurisdiction based on removal is original jurisdiction, not appellate jurisdiction. Because Morgan Verkamp could have objected to jurisdiction in state court, it could also object to jurisdiction after removal.