Argued: November 12, 2019
Appeal from the United States District Court for the Eastern
District of Pennsylvania (D.C. No. 2:18-cv-02082) District
Judge: Honorable Petrese B. Tucker
P. Lentz [ARGUED] Jeffrey W. Ogren Bochetto & Lentz
Counsel for Appellant
Jonson Montgomery Rennie & Jonson, Anthony P. McNamara
Thompson Hine, Tejinder Singh [ARGUED] Goldstein &
Russell, Ammar S. Wasfi Killino Firm Counsel for Appellees
Before: AMBRO, KRAUSE, and BIBAS, Circuit Judges
to federal court changes the field of play, but not the game
being played. Two law firms, Danziger and Morgan Verkamp,
spent almost a year and a half in Pennsylvania state court
disputing and ultimately taking discovery over a referral fee
before any complaint was filed. After Morgan Verkamp removed
the case to federal court, it successfully challenged
personal jurisdiction. Danziger now argues that either there
is specific personal jurisdiction over Morgan Verkamp in
Pennsylvania or that Morgan Verkamp waived that objection.
is no specific jurisdiction because Danziger's claims
neither arise out of nor relate to Morgan Verkamp's
activities in Pennsylvania. Nor did Morgan Verkamp consent to
personal jurisdiction by merely taking part in pre-complaint
discovery, because Pennsylvania law does not let defendants
object to jurisdiction until the plaintiff files a complaint.
And as we clarify today, a defendant who chooses to remove to
federal court does not thus consent to personal jurisdiction;
the defendant carries the defenses it had in state court with
it to federal court.
the District Court need not find Danziger a new playing
field. When the parties suggest transferring a case with a
jurisdictional defect, a district court should ordinarily
balance the equities of doing so before deciding to dismiss
the case with prejudice. But at oral argument, Danziger
conceded that it does not need the District Court to transfer
its case; it could timely refile its claims in another forum.
So we need not remand to let the District Court consider
transferring this case, but will instead affirm.
Morgan and Jennifer Verkamp worked together at an Ohio law
firm. In 2008, they left that firm and founded their own Ohio
law firm, Morgan Verkamp LLC.
& De Llano, LLP, is a Texas law firm. Danziger says that
it has referred potential qui tam clients to Mr.
Morgan and Ms. Verkamp since they were at their old firm. One
of those referred clients was Michael Epp. According to
Dan-ziger, it formed an oral contract with Mr. Morgan and Ms.
Ver-kamp to collect one-third of the attorney's fees from
the Epp suit as a referral fee. Epp, who was living outside
the United States, later retained Morgan Verkamp as counsel.
But he never promised Danziger, orally or in writing, a
Verkamp brought a qui tam action on Epp's behalf
under the False Claims Act against foreign defendants in the
U.S. District Court for the Eastern District of Pennsylvania.
After more than four years of litigation, the U.S. Government
intervened and settled for hundreds of millions of dollars.
As a result, Morgan Verkamp collected several million dollars
in attorney's fees.
Danziger heard about the settlement, it wanted the referral
fee that Morgan Verkamp had allegedly promised. It sued
Morgan Verkamp, Mr. Morgan, and Ms. Verkamp (collectively
Morgan Verkamp) in Pennsylvania state court. Rather than file
a complaint, Danziger filed something called a writ of
summons. In Pennsylvania, a plaintiff can file a writ of
summons and seek discovery before filing a complaint.
See Pa. R. Civ. P. 4003.8.
then moved to compel Morgan Verkamp to take part in
pre-complaint discovery. The parties fought over the scope of
discovery, and the Pennsylvania court held a ...