Danziger & De Llano LLP v. Morgan Verkamp LLC
948 F.3d 124
| 3rd Cir. | 2020Background
- Danziger & De Llano (Texas firm) claims an oral agreement with Ohio firm Morgan Verkamp to pay one‑third of fees as a referral for a qui tam client (Epp); dispute arose after a government settlement produced multimillion-dollar fees for Morgan Verkamp.
- Danziger initiated Pennsylvania proceedings by filing a writ of summons and pursued nearly 18 months of pre‑complaint discovery under Pa. R. Civ. P. 4003.8 before filing a complaint with six counts (fraud, conversion, unjust enrichment, breach of contract, and tortious interference).
- Morgan Verkamp moved to compel Danziger to file the complaint; after Danziger filed, Morgan Verkamp removed the case to federal court and promptly moved to dismiss for lack of personal jurisdiction (alternatively seeking transfer to Ohio); Danziger proposed transfer to Texas.
- The District Court dismissed with prejudice for lack of personal jurisdiction without addressing transfer; Danziger appealed, arguing specific jurisdiction, waiver of the jurisdiction defense, and that the court should have transferred instead of dismissing.
- The Third Circuit treated Danziger’s jurisdictional allegations as true (no evidentiary hearing), reviewed dismissal de novo, and affirmed: no specific jurisdiction in Pennsylvania, no waiver by Morgan Verkamp (including by removal), and no abuse of discretion in declining to transfer given Danziger’s concession it could timely refile in Ohio or Texas.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pennsylvania has specific personal jurisdiction over Morgan Verkamp | Danziger: Pennsylvania has specific jurisdiction because Morgan Verkamp litigated the Epp qui tam in the Eastern District of PA and created the fee pool there | Morgan Verkamp: The referral agreement and alleged breaches/communications occurred outside PA (Ohio/Texas/abroad); any connection is only but‑for causation | No specific jurisdiction: Danziger’s claims do not arise out of or sufficiently relate to Morgan Verkamp’s Pennsylvania contacts |
| Whether Morgan Verkamp waived personal‑jurisdiction defense by participating in pre‑complaint discovery in PA state court | Danziger: Participation in pre‑complaint discovery amounted to consent/waiver of jurisdictional objection | Morgan Verkamp: Under PA procedure, jurisdictional challenges await a complaint; taking part in discovery on a writ does not waive the defense | No waiver in state court: PA rules permit jurisdictional objection only after complaint; participation in pre‑complaint discovery did not waive the defense |
| Whether removal to federal court waived personal‑jurisdiction defense | Danziger: Removing instead of raising a preliminary objection in state court amounted to consent to jurisdiction | Morgan Verkamp: Removal carries defenses into federal court; removal does not cure jurisdictional defects or waive Rule 12(b) defenses | No waiver by removal: A defendant preserves personal‑jurisdiction defenses upon removal and may raise them via Rule 12(b)(2) in federal court |
| Whether the District Court should have transferred rather than dismissed for lack of jurisdiction | Danziger: Court should have transferred to an appropriate district (Texas or Ohio) under 28 U.S.C. § 1631 | Morgan Verkamp: Transfer not required; dismissal appropriate given forum defect and other considerations | Transfer not required: Court must consider transfer generally, but given Danziger’s concession it can timely refile in Ohio/Texas, refusing transfer was not an abuse of discretion; dismissal affirmed |
Key Cases Cited
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (due‑process test for purposeful availment and relatedness of claims to forum contacts)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945) (personal jurisdiction must comport with fair play and substantial justice)
- Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) (distinction between general and specific jurisdiction)
- Freeman v. Bee Mach. Co., 319 U.S. 448 (1943) (jurisdiction on removal is original; removal does not cure jurisdictional defects)
- O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312 (3d Cir. 2007) (standards for specific jurisdiction and relatedness analysis)
- Gen. Elec. Co. v. Deutz AG, 270 F.3d 144 (3d Cir. 2001) (restrictive standard for contract claims: contacts must be instrumental to formation or breach)
- Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) (district court discretion in transfer analysis and forum non‑conveniens considerations)