Federal Removal

Successes in 2023

The Lane Law Letter

We look back at some of our successes in 2023.

Summary Judgment in Quadriplegic Accident

A severe accident on the Cross-Bronx Expressway involved a Jeep Grand Cherokee, a Honda Odyssey, and two tractor-trailers. An occupant of the Jeep was rendered a quadriplegic and brought suit in Bronx County against the operators of the other vehicles. The Court granted summary judgment for our trucking company client after seven years of litigation. This high-exposure case will proceed against the owners of the Honda and the other tractor-trailer.

Summary Judgment, Indemnity and Insurance Coverage

An accident on a state highway in New Jersey led to debilitating injuries to the driver of a small delivery truck when his vehicle impacted a truck operated by a company retained by our client, a broker. The injured man sued our broker client and the trucker involved in the accident. The trucker’s insurer denied additional-insured coverage for our client and commenced a declaratory judgment action to avoid that coverage. We represented the broker in both actions. In the personal injury action we obtained summary judgment dismissing the complaint and enforcing contractual indemnity against the trucker. That double victory led to a settlement of both actions. The insurer settled the personal injury claim in full and made reimbursement to our client for legal fees and expenses incurred in both cases.

Voluntary Dismissal in Alleged Roadway Distraction Claim

Plaintiff’s car was struck in the rear by co-defendant’s vehicle, from which plaintiff suffered spinal injuries requiring surgery. Co-defendant claimed he had been distracted by a truck that was weaving from lane to lane, and even coming close to tipping over. His identification of the truck, which he said bore the name of our client, a popular food service transporter, started out as very sketchy and became virtually worthless after depositions. Plaintiff was persuaded that the phantom truck, if it existed, was not owned by our client. Plaintiff voluntarily dismissed the claim against our client.

Settlement, Exoneration, and Insurance Coverage

A small outdoor recreation business was sued by a young man injured in a rope incident in a state park in New Jersey. The man suffered spinal fractures and had a lengthy hospital and treatment course. He sued our client in state court. Our client made timely notification to its general liability insurer, but the insurer reserved rights as to coverage and commenced a federal declaratory judgment action. We defended that suit, counterclaimed for coverage, and impleaded the client’s insurance broker. After nearly seven years of litigation, the insurers moved for summary judgment. We defeated those motions and a motion to amend the complaint. The insurers succumbed. Together they settled the personal injury case in the high six figures, and then paid the majority of our legal fees and expenses incurred over nearly seven years of federal court litigation.

Summary Judgment Under Graves Amendment and Independent Contractor Doctrine, Indemnification against Subcontractor

An accident at an intersection in Yonkers, New York resulted in shoulder and back injuries. Both injuries resulted in surgical intervention. The injured party brought suit against our client, a freight forwarder, and its subcontractor, who was operating a tractor-trailer involved in the subject accident. The trailer was owned by our client. We obtained summary judgment under both the Graves Amendment and an independent contractor defense. We also obtained summary judgment for contractual indemnity on our cross-claim against the subcontractor.

Voluntary Dismissal in Severe Injury Case

A New Jersey municipal employee was injured while unloading cargo from a trailer, allegedly caused by an ice condition on the product being unloaded. The injured employee sued several parties, including our client, a freight broker. After completion of discovery, and without the need for motion practice, we persuaded our client’s subcontractor to settle the case and obtain a release for our client, while also agreeing to reimburse our client for attorneys’ fees and expenses incurred defending the case.

Plaintiff’s Bad Faith Delay of Defendant’s Removal to Federal Court

Plaintiff sued in state court in New York after an accident on the Cross-Bronx Expressway. His injuries were not serious and treatment was scant. His attorney refused to negotiate a settlement, but he wanted to avoid a federal removal. When we obtained an order that plaintiff provide a written demand, the attorney delayed as long as he could and then provided a written demand of $74,000, just below the $75,000-plus minimum for jurisdiction. Later, counsel served discovery responses that surreptitiously increased the demand to $2,000,000, but that was beyond the one-year limitation for removal. We removed anyway, citing an exception in the statutory deadline provision. The federal court retained jurisdiction, finding that “plaintiff acted in bad faith in order to prevent or delay defendants from removing this action.” The case settled in two weeks for what it was worth – next to nothing.

Moral: Never give up!

The Lane Law Letter will continue to bring you updates on matters of pertinent law in New York and New Jersey.

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

John C. Lane
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.