[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 19-13537

________________________

D.C. Docket No. 2:18-cv-00514-ACA

THOMAS E. REYNOLDS, 

 Plaintiff - Appellant,

versus

BEHRMAN CAPITAL IV L.P., 

AXA PRIMARY FUND AMERICA IV LP, 

AXA PRIVATE CAPITAL I, LP, 

CORE AMERICAS/GLOBAL HOLDINGS, LP, 

GLOBAL FUND PARTNERS II, LP, et al.,

 Defendants - Appellees,

BEHRMAN BROTHERS MANAGEMENT CORPORATION, et al.,

 Defendants.

________________________

Appeal from the United States District Court

for the Northern District of Alabama

________________________

(February 23, 2021)

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 1 of 23
2

Before JORDAN, LAGOA, and BRASHER, Circuit Judges.

JORDAN, Circuit Judge:

Thomas Reynolds, the Chapter 7 trustee for the bankruptcy estates of 

Atherotech Inc. and Atherotech Holdings, appeals the dismissal of his complaint for 

lack of personal jurisdiction. The district court, following removal of the case from 

Alabama state court, applied the doctrine of derivative jurisdiction articulated in 

Lambert Run Coal Co. v. Baltimore & O.R. Co., 258 U.S. 377, 382 (1922), and ruled 

that because the state court did not have personal jurisdiction over the defendants 

under Alabama’s long-arm statute, it too lacked personal jurisdiction. In so ruling, 

the district court concluded that Mr. Reynolds could not rely on Bankruptcy Rule 

7004(d) (which looks to a defendant’s national contacts and permits nationwide 

service of process) to establish personal jurisdiction. And it denied as futile Mr. 

Reynolds’ motion to transfer the case to the Southern District of New York under 

28 U.S.C. § 1406, explaining that under the doctrine of derivative jurisdiction a New 

York district court would likewise lack personal jurisdiction over the defendants.

The Supreme Court has applied the doctrine of derivative jurisdiction only 

with respect to subject-matter jurisdiction, so that if a state court lacks subject-matter 

jurisdiction over a case when it is initially filed, a federal court also lacks subjectmatter jurisdiction when the case is removed (even if the federal court would have 

had jurisdiction had the case originally been filed in a federal forum). The main 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 2 of 23
3

question for us in this appeal is whether the doctrine applies when the state court 

from which the case is removed lacks personal jurisdiction over the defendants. 

I

We accept as true, at this stage of the litigation, the facts as alleged in the 

complaint filed by Mr. Reynolds in Alabama state court (and later amended in 

federal court). See Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 130 

(11th Cir. 2013). Given the posture of the appeal, we express no view on the validity 

of the allegations or the merits of the claims.

A

Atherotech operated a laboratory that conducted testing on blood cholesterol 

levels. Atherotech was wholly owned by Atherotech Holdings, which was in turn

owned by three shareholders: Behrman Capital IV LP, Behrman Brothers LLC, and 

Midcap Financial Investment, LP. Behrman Capital was the majority shareholder 

of Atherotech Holdings, owning 94% of its stock and controlling three of five seats 

on its board of directors. Behrman Brothers—which was also Behrman Capital’s 

general partner—and MidCap owned the remaining shares in Atherotech Holdings.

As part of its business, Atherotech paid physicians who ordered blood 

cholesterol levels a processing and handling fee, known as a P&H fee. Although 

Medicare rules and regulations prohibit the payment of P&H fees, Atherotech 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 3 of 23
4

nevertheless submitted claims for those fees to Medicare and other federal healthcare 

programs.

In 2012, the Department of Justice began to investigate Atherotech’s 

payments of P&H fees as a potential violation of the False Claims Act, 31 U.S.C. §§

3729–3730, and the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b. Violations of the 

False Claims Act can result in a per-claim penalty of between $5,500 and $11,000, 

in addition to treble damages. See 31 U.S.C. § 3729(a). 

Despite knowing of the investigation, Atherotech continued to make P&H fee 

payments and submit Medicare claims for those payments. From January of 2011 

through June of 2013, Medicare reimbursed Atherotech about $35,691,000 for tests 

associated with P&H fee payments. The complaint alleges that, by June of 2013, 

Atherotech had up to $107,073,000 in contingent liabilities for violations of the False 

Claims Act. 

In 2013, as the DOJ investigation was ongoing, Atherotech borrowed $40.5 

million under a credit agreement. Atherotech then executed a dividend 

recapitalization under which it paid Atherotech Holdings’ shareholders—Behrman 

Capital, Behrman Brothers, and MidCap—dividends totaling $31,872,860.75.

Behrman Capital received $31,433,596.05; Behrman Brothers received $87,374.00; 

and MidCap received $351,890.70. Behrman Capital distributed its portion of the 

dividend to its limited partners and its general partner, Behrman Brothers. Behrman 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 4 of 23
5

Brothers in turn distributed its share of the dividends to its members, along with the 

portion it received from Behrman Capital as its general partner.

By July of 2014, Atherotech could no longer pay P&H fees, and its revenues 

decreased significantly. From July through October of 2015, Behrman Capital

invested $6.9 million in Atherotech to keep the business afloat. Despite the influx 

of funds, Atherotech and Atherotech Holdings filed for bankruptcy in March of 

2016. The bankruptcy court appointed Mr. Reynolds as the Chapter 7 trustee for 

both companies, and he eventually sold Atherotech’s assets for $19.6 million. 

B

In March of 2018, Mr. Reynolds, as trustee for the bankruptcy estates of 

Atherotech and Atherotech Holdings, filed a complaint in Alabama state court. The 

initial complaint named 30 defendants: Behrman Capital; Behrman Capital’s 15

limited partners; Behrman Brothers; Behrman Brothers’ 12 members; and MidCap. 

Mr. Reynolds asserted several federal and state law claims stemming from the 

dividend issued by Atherotech Holdings to its shareholders.

The defendants removed the case to the district court under 28 U.S.C. § 1441, 

asserting that the complaint implicated significant federal issues, and alternatively 

under 28 U.S.C. § 1452(a), asserting that pursuant to 28 U.S.C. § 1334 the district 

court had subject-matter jurisdiction under the Bankruptcy Code. The district court 

concluded that the case did not implicate a significant federal issue under § 1441, 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 5 of 23
6

but held that Mr. Reynolds’ claims “arose under” the Bankruptcy Code or were 

“related to” the bankruptcy proceedings of Atherotech and Atherotech Holdings. As 

a result, it ruled that removal was proper under § 1452(a).

The defendants moved to dismiss for lack of personal jurisdiction under Rule 

12(b)(2). The district court granted their motions. It concluded that Bankruptcy 

Rule 7004(d), which allows for nationwide service of process, see, e.g., Double 

Eagle Energy Services, L.L.C. v. MarkWest Utica EMG, L.L.C., 936 F.3d 260, 264 

(5th Cir. 2019), did not apply because its jurisdiction was derivative of the Alabama 

state court. Turning to Alabama’s long-arm statute, the district court ruled that the 

defendants did not have minimum contacts with Alabama that would permit it to 

exercise personal jurisdiction over them. The district court, however, allowed Mr. 

Reynolds to file a motion to amend his complaint and explain why doing so would 

not be futile. 

In his motion to amend, Mr. Reynolds asserted that the proposed amended 

complaint would “remedy the deficiencies cited” by the district court, and would 

drop MidCap and the limited partners and members as defendants. See D.E. 109 at 

2–3. He further stated that “[t]he only two defendants named in the [a]mended 

[c]omplaint” were Behrman Capital and Behrman Brothers. See id. Consistent with 

this representation, Mr. Reynolds’ amended complaint listed Behrman Capital and 

Behrman Brothers as the sole defendants.

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 6 of 23
7

Behrman Capital and Behrman Brothers moved to dismiss the amended 

complaint for lack of personal jurisdiction under Rule 12(b)(2). Mr. Reynolds 

asserted that there was personal jurisdiction under the Alabama long-arm statute,

and alternatively requested that the district court transfer the case to the Southern 

District of New York pursuant to 28 U.S.C. § 1406 if it concluded that it lacked 

personal jurisdiction over the defendants. The district court ruled that, under 

Alabama’s long-arm statute, it could not exercise personal jurisdiction over 

Behrman Capital and Behrman Brothers. It also concluded that transfer would be 

futile “because the derivative removal jurisdiction bars any federal court from 

acquiring personal jurisdiction over this suit after its removal from a state court that 

lacked such personal jurisdiction.” The district court therefore dismissed Mr. 

Reynolds’ amended complaint without prejudice. 

On September 9, 2019, Mr. Reynolds filed a notice of appeal in which he 

included all the original defendants, including MidCap. In his notice of appeal, Mr. 

Reynolds sought to appeal the district court’s dismissal of both his original and 

amended complaints.

II

As noted, Mr. Reynolds dropped MidCap as a defendant in his amended 

complaint. MidCap now argues that this constituted a waiver by Mr. Reynolds of 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 7 of 23
8

any argument that the district court erred by initially dismissing it for lack of 

personal jurisdiction. We are not persuaded. 

An amended complaint supersedes and replaces the original complaint. See 

Hoefling v. City of Miami, 811 F.3d 1271, 1277 (11th Cir. 2016); Dresdner Bank AG 

v. M/V Olympia Voyager, 463 F.3d 1210, 1215 (11th Cir. 2006); Fritz v. Standard 

Sec. Life Ins. Co. of N.Y., 676 F.2d 1356, 1358 (11th Cir. 1982). We have held, 

however, that a plaintiff does not waive his right to appeal the dismissal of a claim 

in the original complaint by amending the complaint and omitting the dismissed 

claim. “[W]e do not require a party to replead a claim following a dismissal under 

Rule 12(b)(6) to preserve objections to the dismissal on appeal” where repleading 

“would have been futile and would have resulted in a second dismissal[.]” Dunn v. 

Air Line Pilots Ass’n, 193 F.3d 1185, 1191 n.5 (11th Cir. 2001). See also Varnes v. 

Local 191, Glass Bottle Blowers Ass’n of the United States and Canada, 674 F.2d 

1365, 1370 (11th Cir. 1982) (“Varnes was not barred, by consenting to the dismissal 

and filing the amended complaint, from raising on appeal the correctness of the 

dismissal order.”).

1

 

1 We had come to a similar conclusion in Wilson v. First Hous. Inv. Corp., 566 F.2d 1235, 1238 

(5th Cir. 1978), but that decision was vacated by the Supreme Court, see 444 U.S. 959 (1979), and 

as a result it does not have any precedential force. See United States v. Sigma Int’l, Inc., 300 F.3d 

1278, 1280 (11th Cir. 2002) (en banc).

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 8 of 23
9

As the Tenth Circuit has explained, “a rule requiring plaintiffs who file 

amended complaints to replead claims previously dismissed . . . in order to preserve 

those claims merely sets a trap for unsuspecting plaintiffs with no concomitant 

benefit to the opposing party.” Davis v. TXO Prod. Corp., 929 F.2d 1515, 1518

(10th Cir. 1991). We agree. “Without more, the action of the amending party should 

not result in completely denying the right to appeal the court’s ruling.” 6 Arthur R. 

Miller, Mary Kay Kane, & Benjamin Spencer, Federal Practice & Procedure § 1476 

(3d ed. 2020 update). 

Applying Dunn, we conclude that Mr. Reynolds did not waive his right to 

appeal the district court’s dismissal of MidCap for lack of personal jurisdiction by 

failing to name MidCap in the amended complaint because amendment would have 

been futile. In dismissing MidCap, the district court rejected Mr. Reynolds’ 

arguments that MidCap had the requisite minimum contacts under Alabama’s longarm statute, and, alternatively, that Bankruptcy Rule 7004(d) could be used to obtain 

personal jurisdiction over the defendants. Apparently, Mr. Reynolds had no 

additional facts that could establish minimum contacts for MidCap under Alabama’s 

long-arm statute, and requesting for a second time that the district court apply 

Bankruptcy Rule 7004(d) therefore would have been futile. Under these

circumstances, Mr. Reynolds did not waive his right to appeal the district court’s 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 9 of 23
10

dismissal of MidCap from the original complaint for lack of personal jurisdiction.

See Dunn, 674 F.2d at 1191 n.5.

2

III

“We review de novo the district court’s dismissal for lack of personal 

jurisdiction.” Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 

1357, 1360 (11th Cir. 2006). 

A

The parties dispute whether the doctrine of derivative jurisdiction prevents the 

post-removal use of Bankruptcy Rule 7004(d) to establish personal jurisdiction over 

the defendants. Mr. Reynolds contends that the doctrine applies only to subjectmatter jurisdiction, and not personal jurisdiction. Behrman Capital and Behrman 

Brothers argue that the doctrine applies to both types of jurisdiction, and urge 

affirmance. We provide some background on the doctrine of derivative jurisdiction, 

and then turn to the parties’ arguments.

“[W]hen a federal court has jurisdiction, it also has a ‘virtually unflagging 

obligation . . . to exercise’ that authority.” Mate v. Lynch, 576 U./s. 143, 150 (2015) 

(citation omitted). But almost a century ago, in Lambert Run Coal Co., the Supreme 

2 Given our precedent in Dunn, we need not address MidCap’s reliance on United States ex rel. 

Atkinson v. PA. Shipbuilding Co., 473 F.3d 506, 516 (3d Cir. 2007) (explaining that “[i]f a party 

omits a claim from an amended complaint that it would not have been futile to replead, that party 

can still preserve the claim for appellate review by standing on the dismissed claim despite leaving 

it out of the amended complaint”).

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 10 of 23
11

Court explained that “[t]he jurisdiction of the federal court on removal is, in a limited 

sense, a derivative jurisdiction. If the state court lacks jurisdiction of the subjectmatter or of the parties, the federal court acquires none, although it might in a like 

suit originally brought there have had jurisdiction.” 258 U.S. at 382. The complaint 

in that case, which was filed in state court and then removed to federal court, sought 

to challenge and set aside an order of the Interstate Commerce Commission. 

Because federal courts had exclusive jurisdiction over such claims, and because the 

United States had not consented to be sued in state courts, the Supreme Court held 

that the state court did not have subject-matter jurisdiction to entertain the complaint. 

And so, when the case was removed to federal court, that court also lacked subjectmatter jurisdiction. See id. (“As the state court was without jurisdiction over either 

the subject-matter or the United States, the District Court could not acquire 

jurisdiction over them by the removal.”).

The Supreme Court has kept the doctrine of derivative jurisdiction alive over 

the years by sporadically applying it or discussing it. See, e.g., Gen. Inv. Co. v. Lake 

Shore & M.S. Ry. Co., 260 U.S. 261, 288 (1922) (“When a cause is removed from a 

state court into a federal court, the latter takes it as it stood in the former. A want of 

jurisdiction in the state court is not cured by the removal, but may be asserted after 

it is consummated.”); Minnesota v. United States, 305 U.S. 382, 389 (1939) 

(applying the doctrine of derivative jurisdiction to dismiss an action because the state 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 11 of 23
12

court lacked subject-matter jurisdiction); Freeman v. Bee Machine Co. Inc., 319 U.S. 

448, 449–51 (1943) (discussing the doctrine of derivative jurisdiction and refusing 

to extend it to bar the post-removal amendment of the complaint); Arizona v. 

Manypenny, 451 U.S. 232, 242 n.17 (1981) (describing the doctrine of derivative 

jurisdiction as well-settled). The doctrine, according to the Supreme Court, applies 

“even where the federal court would have had jurisdiction if the suit were brought 

there.” Freeman, 319 U.S. at 449. See, e.g., Fed. Nat. Mortg. Ass’n v. LeCrone, 

868 F.2d 190, 192 (6th Cir. 1989); Reid v. United States, 715 F.2d 1148, 1153–54 

(7th Cir. 1983). 

Over the years, the doctrine has been criticized by some courts and 

commentators. See, e.g., Washington v. Am. League of Pro. Baseball Clubs, 460 

F.2d 654, 658 (9th Cir. 1972) (describing the doctrine as a “kind of legal tour de 

force that most laymen cannot understand, particularly in a case where the federal 

court not only has subject matter jurisdiction, but has exclusive subject matter 

jurisdiction”); 14C Charles Alan Wright, Arthur R. Miller, Edward H. Cooper et al., 

Federal Practice & Procedure § 3722 (Rev. 4th ed. 2020) (collecting cases criticizing 

the doctrine of derivative jurisdiction and characterizing the criticism as 

“deserved”). In 1985, Congress partially abrogated the doctrine of derivative 

jurisdiction by adding a new subsection (e) to 28 U.S.C. § 1441. The amended § 

1441(e) provided that a federal court on removal was “not precluded from hearing 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 12 of 23
13

and determining any claim” simply “because the State court from which such civil 

action is removed did not have jurisdiction over that claim.” 28 U.S.C. § 1441(e)

(1986). In 2001, we said that the amended § 1441(e) “abrogated the theory of 

derivative jurisdiction.” Hollis v. Florida State University, 259 F.3d 1295, 1298 

(11th Cir. 2001). 

The 1985 amendment to § 1441 resulted in some disagreement as to whether 

Congress had abrogated the doctrine of derivative jurisdiction for all removal 

statutes or just for § 1441. See generally Palmer v. City Nat. Bank, 498 F.3d 236, 

245 (4th Cir. 2007) (explaining the different views of the Fourth and Eighth 

Circuits). The disagreement proved to be relatively short-lived, for in 2002 Congress 

again amended § 1441, “creating a new § 1441(e) and redesignating the prior § 

1441(e) as § 1441(f) and slightly changing its language.” Id. The new (and current) 

§ 1441(f) now reads as follows (emphasis ours): “Derivative removal jurisdiction.--

The court to which a civil action is removed under this section is not precluded from 

hearing and determining any claim in such civil action because the [s]tate court from 

which such civil action is removed did not have jurisdiction over that claim.”3

Following the 2002 amendments to § 1441, several of our sister circuits have 

held that the “under this section” language in the new § 1441(f) abrogates the 

3 Congress has also abrogated the doctrine of derivative jurisdiction in “patent, plant variety 

protection, and copyright cases.” See 28 U.S.C. § 1454(c). But this is not one of those types of 

cases.

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 13 of 23
14

doctrine of derivative jurisdiction only in cases removed to federal court pursuant to 

§ 1441. These circuits have therefore continued to apply the doctrine in cases 

removed under other federal statutes, such as 28 U.S.C. § 1442. See Palmer, 498 

F.3d at 244–46; Rodas v. Seidlin, 656 F.3d 610, 615–25 (7th Cir. 2011); Bullock v. 

Napolitano, 666 F.3d 281, 286 (4th Cir. 2012); Lopez v. Sentrillon Corp., 749 F.3d 

348, 350–51 (5th Cir. 2014); Conklin v. Kane, 634 F. App’x 69, 73 (3d Cir. 2015). 

Accord 14C Federal Practice & Procedure § 3726. But cf. North Dakota v. 

Fredericks, 940 F.2d 333, 337 (8th Cir. 1991) (holding, before the 2002 

amendments, that the “policy of Congress underlying new § 1441(e) supports the 

complete abandonment of the derivative-jurisdiction theory”). These decisions, 

however, are of limited value here because they all involved scenarios where the 

state court lacked subject-matter (not personal) jurisdiction.

B

The question for us is whether the doctrine of derivative jurisdiction applies 

to removed cases in which the state court lacked personal jurisdiction over the 

defendants. Our answer, at least in this case, is that it does not.

We begin by acknowledging the obvious—though the Supreme Court has 

applied the doctrine of derivative jurisdiction only in cases where the state court 

lacked subject-matter jurisdiction, it has described the doctrine as encompassing 

both subject-matter and personal jurisdiction. See, e.g., Manypenny, 451 U.S. at 242 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 14 of 23
15

n.17 (“[I]f the state court lacks jurisdiction over the subject matter or the parties the 

federal court acquires none upon removal.”); Freeman, 319 U.S. at 449 (“[W]here a 

state court lacks jurisdiction of the subject matter or of the parties, the federal District 

Court acquires none on removal of the case.”); Lambert Run Coal Co., 258 U.S. at 

382 (“ If the state court lacks jurisdiction of the subject-matter or of the parties, the 

federal court acquires none, although it might in a like suit originally brought there 

have had jurisdiction.”). These characterizations are dicta, but Supreme Court dicta 

“is not something to be lightly cast aside.” F.E.B. Corp. v. United States, 818 F.3d 

681, 690 n.10 (11th Cir. 2016) (noting that “there is dicta . . . and then there is 

Supreme Court dicta”). 

Moreover, over the years a number of circuits have applied the doctrine of 

derivative jurisdiction to require dismissal in cases where the state court, prior to 

removal, lacked personal jurisdiction over the defendants (usually due to ineffective 

service of process). See Aanestad v. Beech Aircraft Corp., 521 F.2d 1298, 1300 (9th 

Cir. 1974); Meyer v. Indian Hill Farm, Inc., 258 F.2d 287, 290 (2d Cir. 1958); 

Garden Homes, Inc. v. Mason, 238 F.2d 651, 653 (1st Cir. 1956); Block v. Block, 

196 F.2d 930, 933 (7th Cir. 1952). We can therefore understand why the district 

court here applied the doctrine of derivative jurisdiction. 

Giving the Supreme Court’s dicta the respect and consideration it is due, and 

acknowledging the cases cited above, we choose to go in a different direction. We 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 15 of 23
16

hold, for several reasons, that the doctrine of derivative jurisdiction does not apply 

in cases where the state court lacks personal jurisdiction over the defendants.

First, having acknowledged the importance of the Supreme Court’s dicta, we

note that there are specific reasons in each of the derivative jurisdiction cases cited

above for the Court to have included the “of the parties” language in its dicta (i.e., 

language that appears to encompass personal jurisdiction). In Lambert Run Coal 

Co., for example, the question at issue involved federal sovereignty. Thus, the issue 

of jurisdiction in that case largely hinged on who the party was. The same is true in 

Manypenny, which was a criminal case between a state and a federal officer. And 

in Manypenny, the “of the parties” language was not relevant to the outcome of the 

case and appears only in a footnote. 

Second, in Freeman, the Supreme Court acknowledged that Lambert Run 

Coal Co. had rejected the idea that jurisdictional defects were cured or waived by 

removal, but nonetheless held that district courts have the power to cure or fix 

whatever jurisdictional defects existed. 319 U.S. at 452. The Court explained that 

the Lambert Run Coal Co. line of cases stands for the proposition that removal, in 

and of itself, does not cure any state court jurisdictional defects: “The Lambert Co. 

case and those which preceded and followed it merely held that defects in the 

jurisdiction of the state court either as respects the subject matter or the parties were 

not cured by removal but could thereafter be challenged in the federal court.” Id. at 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 16 of 23
17

451. The Court held that, although removal “does not cure jurisdictional defects 

present in the state court action,” federal courts have “the full arsenal of authority 

with which they have been endowed.” Id. at 452. Accordingly, the Court held that 

a plaintiff could add a claim after removal—even though that claim could not have 

been added in state court—because the federal rules allow such an amendment.

Under Freeman, defendants who remove their action to federal court do not 

waive their challenge to personal jurisdiction. But Freeman also means that the 

district court to which the case is removed has the “full arsenal of authority with 

which [it has] been endowed” to establish personal jurisdiction over the defendants. 

Id. Part of that “arsenal of authority,” as relevant here, is Bankruptcy Rule 7004(d), 

which looks to a defendant’s national contacts and permits nationwide service of 

process to establish personal jurisdiction.

Third, the Supreme court has consistently held that once a case has been 

removed from state court to federal court, federal law “govern[s] the mode of 

procedure[.]” Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck 

Drivers Local No. 70, 415 U.S. 423, 438 (1974). See also Willy v. Coastal Corp., 

503 U.S. 131, 134–35 (1992) (explaining that the Federal Rules of Civil Procedure, 

pursuant to the language in Rule 81(c), “govern procedure after removal”); Freeman, 

319 U.S. at 452 (“The jurisdiction exercised on removal is original not appellate. . . 

. The forms and modes of proceeding are governed by federal law.”) (citations 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 17 of 23
18

omitted). It is therefore difficult to understand why a federal statute or rule 

governing personal jurisdiction (including one providing for nationwide service of 

process) would not control following the removal of a case from state court. 

Indeed, we have suggested for this reason that the doctrine of derivative 

jurisdiction does not apply to defects in personal jurisdiction. In Aguacate 

Consolidated Mines, Inc., of Costa Rica v. Deeprock, Inc., 566 F.2d 523 (5th Cir. 

1978), the plaintiff filed suit in Georgia state court, and the defendant removed the 

action to federal court. The Georgia district court, applying the Georgia long-arm 

statute, concluded that it lacked personal jurisdiction over the defendant and 

dismissed the case. See id. at 524. The plaintiff filed a motion for reconsideration, 

asking the Georgia district court to transfer the case to an Alabama district court with 

personal jurisdiction over the defendant, and the Georgia district court decided that 

transfer was appropriate. See id. The Alabama district court nevertheless dismissed 

the case, concluding that the Georgia district court “could not transfer a case under 

28 U.S.C. § 1406(a) without first acquiring personal jurisdiction.” Id. On appeal, 

we reversed and rejected the defendant’s argument based on the doctrine of 

derivative jurisdiction: “Although the jurisdiction of a federal court after removal is, 

in a limited sense, derivative, removed actions become subject to federal rather than 

state rules of procedure.” Id. at 525. We therefore allowed the transfer to take place 

even though the Georgia district court (and presumably the Georgia state court prior 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 18 of 23
19

to removal) did not have personal jurisdiction over the defendant. See id. See also 

Bentz v. Recile, 778 F.2d 1026, 1027 (5th Cir. 1985) (“Precedent of this court 

supports transfer of a case pursuant to section 1406(a) or section 1404(a) from a 

federal Court lacking personal jurisdiction to one possessing it, even if the case was 

removed from a state court that itself lacked personal jurisdiction.”).

Fourth, we agree with the Third Circuit’s decision in Witherow v. Firestone 

Tire & Rubber Co., 530 F.2d 160, 168–69 (3d Cir. 1976) (reasoning that the doctrine 

of derivative jurisdiction requires dismissal only when the state court lacks subjectmatter jurisdiction over the case, but holding that the plaintiff’s failure to comply 

with the applicable state statute of limitations could not be cured or remedied in 

federal court after removal). As the Third Circuit explained, a “clear purpose of the 

derivative limitation” is that “federal courts not entertain, on removal, actions that 

the state court could not entertain in the first instance.” Id. at 168. Cf. Welsh v. 

Cunard Lines, Ltd., 595 F. Supp. 844, 845–46 (D. Ariz. 1984) (stating that the 

doctrine of derivative jurisdiction is “an archaic and unhelpful principle,” and 

limiting its application by noting that “while [it is] still the law, [it] should be 

carefully confined to cases where precedent unquestionably compels that it be 

applied”).

Fifth, the leading federal court treatises take the position that the doctrine of 

derivative jurisdiction is limited to cases in which the state court lacks subject-matter 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 19 of 23
20

jurisdiction. See 14C Federal Practice & Procedure § 3722 (“The derivativejurisdiction principle pertains only to subject-matter jurisdiction.”); 16 Daniel 

Coquillette et al., Moore’s Federal Practice § 107.23 (3d ed. 2020) (“Prior to the 

Judicial Improvements Act of 1985, a case could not be removed to federal court if 

the state court in which it had been initiated would not have had subject-matter 

jurisdiction over the action.”); 1A Federal Procedure, Lawyers Edition § 1.723 (Oct. 

2020 update) (the doctrine of derivative jurisdiction “is properly applied, if to 

anything, to cases involving a defect in the state court’s subject-matter jurisdiction 

over the case”). Their view is not, of course, dispositive, but it is certainly 

informative, and we find it persuasive. 

Sixth, subject-matter jurisdiction and personal jurisdiction differ in an 

important respect. The former (which is structural) cannot be waived or conferred 

by the parties, while the latter (which is personal) can. Compare Commodity Futures 

Trading Comm’n v. Schor, 478 U.S. 833, 850–51 (1986), with Ins. Co. of Ireland, 

Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982). We realize 

that this difference is not a game-breaker, for it does not adequately explain why the 

doctrine of derivate jurisdiction would deprive a federal court of jurisdiction in a 

case where subject-matter jurisdiction is exclusively federal. But it does provide an 

additional reason for not extending the doctrine to the realm of personal jurisdiction. 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 20 of 23
21

The district court, then, could exercise jurisdiction following removal 

notwithstanding the state court’s lack of personal jurisdiction over the defendants 

under Alabama’s long-arm statute. And it could look to Bankruptcy Rule 7004(d)

to decide whether personal jurisdiction existed.4

C

Bankruptcy Rule 7004(d) permits nationwide service of process: “The 

summons and complaint and all other process except a subpoena may be served 

anywhere in the United States.” In this circuit, when a federal statute or rule 

“provides for nationwide service of process, it becomes the . . . basis for federal 

jurisdiction.” Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 

935, 942 (11th Cir. 1997). 

When the district court applies Bankruptcy Rule 7004(d) on remand, it will 

need to ensure that the exercise of jurisdiction over the defendants is “not 

unconstitutionally burdensome” under the Fifth Amendment. See id. at 947. The 

court must “examine a defendant’s aggregate contacts with the nation as a whole 

rather than [its] contacts with the forum state in conducting the Fifth Amendment

analysis.” Id. (citation omitted). Although a defendant’s contacts with the United 

States do “not automatically satisfy the due process requirements of the Fifth 

4 Given our conclusion about the inapplicability of the doctrine of derivative jurisdiction, we need 

not address Mr. Reynolds’ argument that there was personal jurisdiction over the defendants under 

Alabama’s long-arm statute.

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 21 of 23
22

Amendment,” the burden is on a defendant “to demonstrate that the assertion of 

jurisdiction in the forum will make litigation so gravely difficult and inconvenient 

that [it] unfairly is at a severe disadvantage in comparison to [its] opponent.” Id. at 

947–48 (citations and internal quotation marks omitted). If a defendant “makes a 

showing of constitutionally significant inconvenience, jurisdiction will comport with 

due process only if the federal interest in litigating the dispute in the chosen forum 

outweighs the burden imposed on the defendant.” Id. at 948 (describing the factors 

a court should consider). See also Managed Care Advisory Group, LLC v. Cigna 

Healthcare, Inc., 939 F.3d 1145, 1158 (11th Cir. 2019) (articulating the same 

standard).

There is one final matter. Our decision in Aguacate Consolidated Mines, 566 

F.2d at 525, makes it clear that the district court could consider Mr. Reynolds’

alternative request for a transfer to the Southern District of New York pursuant to 

28 U.S.C. § 1406 even if there was no personal jurisdiction over the defendants under 

Alabama’s long-arm statute. So, if the district court on remand decides that the 

exercise of personal jurisdiction under Bankruptcy Rule 7004(d) would violate the 

Fifth Amendment as to some or all of the defendants, it will need to turn to the § 

1406 motion to transfer. The defendants are correct that Aguacate Consolidated 

Mines does not mandate a transfer, but it doesrequire consideration of Mr. Reynolds’ 

motion. 

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 22 of 23
23

IV

The district court’s dismissal of Mr. Reynolds’ complaint pursuant to the 

doctrine of derivative jurisdiction is reversed, and the case is remanded for further 

proceedings consistent with this opinion. 

REVERSED AND REMANDED.

USCA11 Case: 19-13537 Date Filed: 02/23/2021 Page: 23 of 23