Our Courts Are Closed But We Will Be Working

The courts in New York and New Jersey have closed for hearings, conferences, and jury trials.  Our friends in Pennsylvania report many similar closings.  We even had a Philadelphia mediation postponed. Meetings of 50 or more are prohibited in New York and New Jersey, restaurants and bars are closed, and other non-essential businesses are encouraged to follow suit.  We will continue to work in the office unless ordered to stay home. We are fully able to work remotely without interruption.  Court filings in most of our courts are done electronically, and we receive orders and notifications from the courts in the same manner.  We will receive our emails, of course.  If we are out, or at night, our phones will route your calls to John (Press 2) or Peter (Press 3) at any time, with immediate connection to our cell phones.

We hope this will not last long.  Most important, we hope you all remain safe and healthy.

“Removal to Federal Court Changes the Field of Play, but not the Game Being Played.”

James A. Byrne U.S. Courthouse
Philadelphia, PA

With those words the Third Circuit rules that removal to federal court does not cure jurisdictional defects or waive any other defenses available in state court. Danziger & DeLlamo, LLP v. Morgan Verkamp, LLP, (January 15, 2020) is a battle between two law firms over a purported referral fee worth millions of dollars. Morgan Verkamp, an Ohio firm, succeeded in a qui tam action in Pennsylvania federal court. Danziger, a Texas law firm, says it referred the case to Morgan, for an orally agreed referral fee made by telephone between Texas and Ohio.

In a qui tam action a party, called a relator, pursues a claim on behalf of a government, which is deemed the real party in interest. If the government succeeds, the relator receives a share of the award. In this case, Morgan brought the case under the federal False Claims Act, and the U.S. government received a settlement for hundreds of millions of dollars; Morgan received several million dollars in attorneys’ fees. Danziger wants a share of those fees.

The two firms spent a year and a half conducting discovery in a procedure permitted by Pennsylvania state court rules before the filing of a complaint. When Danziger finally filed its complaint, Morgan Verkamp promptly removed the lawsuit to federal court and moved to dismiss, arguing that it was immune from personal jurisdiction in Pennsylvania. The district court agreed and dismissed the complaint. Danziger appealed, arguing that Morgan consented to personal jurisdiction by removing the case to federal court.

The Third Circuit disagreed:

We now adopt this rule.  On removal, a defendant brings its defenses with it to federal court. * * * Removal does not cure jurisdictional defects, so defendants can still challenge jurisdiction after removal.

The Third Circuit, which includes New Jersey, now joins the First, Second, and Eighth Circuits. “[T]he federal court takes up where the state court left off.” Nationwide Eng’g & Control Sys., Inc. v. Thomas (8th Cir. 1988). The governing case in the Second Circuit, which includes New York, is Cantor Fitzgerald, L.P. v. Peaslee (2nd Cir. 1996) (“Removal does not waive any Rule 12(b) defenses.”). Cantor continues to be cited by the New York federal courts.

We routinely remove cases to federal court in New York and New Jersey, with the confidence that our clients’ defenses to personal jurisdiction will remain intact in the federal forum.

Does Admiralty Law Permit Punitive Damages in a Seaman’s Injury Claim Based on Unseaworthiness?

The Supreme Court rules that it does not, in Dutra Group v. Batterton, decided on June 24, 2019.

“This case asks whether a mariner may recover punitive damages on a claim that he was injured as a result of the unseaworthy condition of the vessel.” With that introduction, Justice Alito began a fascinating history of maritime personal injury claims on behalf of merchant seamen. In maritime and admiralty cases, the federal courts sitting as courts of admiralty “proceed in the manner of a common law court,” as instructed by the Constitution. In Batterton, the Court exercised its jurisdiction to decide that punitive damages are not available in a mariner’s personal injury claim based upon unseaworthiness of the vessel.

Christopher Batterton worked as a deckhand on vessels owned by Dutra Group. His hand was injured when it was caught between a bulkhead and a hatch that blew off as a result of unventilated air accumulating and pressurizing with the compartment.

Continue reading

Is PIP Reimbursement Arbitration Mandatory for a Self-Insured in New Jersey?

An appellate court in New Jersey says that it is. In Liberty Mut. Ins. Co. v. Penske Truck Leasing, Co., CEVA Freight, LLC, and Michael Kika, a recently published decision, the Appellate Division ruled that a self-insured must submit to mandatory arbitration in regard to a PIP reimbursement claim. An arbitrator, not a court, will decide whether the self-insured was negligent and must reimburse the PIP carrier. The decision is important because it is the first such published opinion.

Continue reading

On This Date in SCOTUS History – June 13

photo by Jennifer Enberg

​In 1966, the landmark case of Miranda v. State of Arizona, 384 U.S. 436 (1966), was decided.  The 5-4 majority held that a person in custody must be informed of his right to counsel before and during questioning, and the right to not self-incriminate.  It further held that the suspect must not only understand these rights but, should the suspect choose to waive these rights, that it be done voluntarily.  While most are familiar with the case of Miranda v. Arizona, which gave rise to the term “Miranda rights,” did you know that three additional cases fell under this SCOTUS ruling?  Westover v. United States, Vignera v. New York, and California v. Stewart, had been consolidated with Miranda.


In 1967, Thurgood Marshall was nominated to the Court by President Johnson. He was confirmed on August 30, 1967, by a vote of 69-11, becoming the first African American to serve as an Associate Justice.  Justice Marshall, himself, won 29 out of the 32 cases he argued before the Supreme Court, the most famous being Brown v. Board of Education of Topeka, 347 U.S. 483 (1954).

Supreme Court Resolves Maritime Product Duty-to-Warn Issue

The United States Supreme Court is the final arbiter of the Maritime Law, a unique and large body of federal common law, tempered by any controlling Congressional enactments. So, in recently decided Air & Liquid Sys. Corp. v. DeVries, the Court addressed the scope of the duty of a marine product manufacturer to warn of a potential harm from a part that is required to be incorporated into its product. Here, the part to be added contained asbestos, and it allegedly led to the deaths of two Navy sailors. Their families sued the manufacturer of pumps, blowers, and turbines, but not the manufacturer of the asbestos-containing added part that actually caused the harm. The Supreme Court sided with the families.

Continue reading

Care, Custody, or Control, Water Damage Exclusion, Dominate Recent New Jersey Insurance Decisions

Mix a safe, a blowtorch, and $4,000,000 in pearls, and you have a dandy insurance coverage fight. Companion Trading Company, a New York business, purchased a safe from Mega Security Company, in New Jersey. Companion used the safe to store semi-precious jewelry, including pearls at its New York location. For some reason the safe door became immovable, and Companion called Mega in to investigate. Mega’s technician could not open the door, and so arranged to ship the safe back to New Jersey for further work. Over several days Mega employees and an outside technician worked on the safe in vain at Mega’s headquarters. Finally, they opened the safe by using a blowtorch. When Companion got it back and checked the contents, they saw that a valuable cache of pearls had been damaged.

Continue reading