Derivative Jurisdiction Doctrine Does Not Apply to Personal Jurisdiction

In the category of legal doctrines that have outlived whatever usefulness that they once had falls the doctrine of “derivative jurisdiction”—that a federal district court must dismiss a removed case if the state court from which it was removed lacked subject-matter jurisdiction. The doctrine was repealed by statute for cases removed under the general removal provision, 28 U.S.C. § 1441(f), but the question remains whether it has any viability with respect to cases removed under other provisions. In Reynolds v. Behrman Capital IV L.P., 2021 WL 683997 (11th Cir. Feb. 23, 2021), the court considered whether the doctrine has any applicability to personal jurisdiction. Following removal of the case from an Alabama state court, the district court had ruled that because the Alabama court lacked personal jurisdiction under the state’s long-arm statute, it too lacked personal jurisdiction. In reversing, Judge Jordan’s opinion for the court painstakingly disentangled the procedural web; reviewed the history of the doctrine of derivative jurisdiction; and concluded that the doctrine had no applicability to personal jurisdiction—at least in most cases. On remand, the district court was instructed that it is free to consider whether personal jurisdiction might be conferred by the nationwide service of process provision in Bankruptcy Rule 7004(d) (the plaintiff being a bankruptcy trustee). The district court was also permitted to consider the plaintiff’s alternative transfer motion under 28 U.S.C. § 1406, because federal procedure governed.

Posted by Tom Byrne.

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