Wolf Block Claims N.J. Roots in Move to Exit Federal Court

, The Legal Intelligencer

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Wolf Block

Wolf Block, the defunct firm that had its headquarters in Philadelphia, has said in court papers it is a New Jersey firm for purposes of diversity jurisdiction.

The firm, a Philadelphia legal icon that dissolved in 2009 and is still winding up its affairs, is trying to get a suit it filed against its insurer brought back to state court in Philadelphia. And in an effort to negate diversity of citizenship for federal jurisdiction, the firm says that, like its insurer, Federal Insurance Co., it too is a New Jersey resident.

In Wolf Block v. Federal Insurance, the firm sued its insurer for denying coverage of an underlying case—Budin v. Wolf Block—in which a former partner sued the firm when it stopped paying him his severance payments post-dissolution. The Budin matter has since settled for undisclosed terms.

Federal Insurance removed the case against it from the Philadelphia Court of Common Pleas to the U.S. District Court for the Eastern District of Pennsylvania, noting it was an Indiana corporation with its principal place of business in New Jersey, according to Wolf Block's motion for remand.

Now Wolf Block wants to head back to the state court of its choice—Philadelphia Court of Common Pleas—and is attempting to get there by arguing both it and its insurer are New Jersey citizens.

"Since Wolf Block had at least 29 partners who were New Jersey residents at the time of dissolution, Wolf Block submits that it is a citizen of New Jersey for diversity jurisdiction purposes," the firm said in the motion to remand. "Accordingly, there is no complete diversity of the parties ... and this case should be remanded to the Philadelphia Court of Common Pleas."

In order to achieve complete diversity for purposes of federal jurisdiction, every partner must be "completely diverse from its opponent," Wolf Block argued in its motion. The firm further noted that it is still in the process of winding up its affairs, which means the court must look at the partnership as of Nov. 18, when Federal Insurance removed the case to federal court. Wolf Block said all of the partners at the time of the dissolution are still partners now for certain purposes and all of their states of citizenship must be examined for purposes of determining jurisdiction.

The firm said Federal Insurance misunderstood partnership law when it said Wolf Block was a partnership in dissolution with no current partners. The firm said case law has determined a partnership in dissolution continues until all pre-existing matters are terminated.

"Because Wolf Block's affairs are not wound up and because Wolf Block's future affairs are directed by a wind-down committee comprised (in part) of two partners who are residents of New Jersey [Patrick Matusky and Stuart Pachman], Wolf Block is a citizen of New Jersey for federal diversity jurisdiction purposes," the firm said in its motion.

The firm is seeking costs and expenses it incurred in fighting the removal and seeking remand.

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