His withdrawal came after a Commonwealth Court hearing in which Schwartz's supporters questioned some of the 1,500 signatures Kleinman secured to appear on the ballot.
State law requires candidates collect 1,000 to secure a ballot position.
Within days of petition filing last month, a group of Schwartz supporters challenged the validity of more than 500 of Kleinman's signatures. They also questioned the eligibility of one of his deputy campaign managers to circulate nominating petitions, as he was not a registered voter in the district when the process began.
Representing himself in court Friday, Kleinman never countered those claims. Instead, he sought to have the challenge thrown out on the ground that he had never been personally served with legal documents about the Schwartz camp's objections.
Attorneys representing the congresswoman's backers maintained that the documents had been delivered to Kleinman's campaign address and that he was there at the time. They later sent electronic copies of the filings to him over a series of e-mails to which he responded.
Ultimately, Judge Rochelle S. Friedman found Kleinman's arguments unconvincing.
"You did everything possible to avoid being served," she said.
After Friday's hearing, several of Kleinman's supporters gathered in a hallway outside the courtroom to heckle the legal team representing Schwartz's backers. Hurling accusations that the congresswoman was afraid to face a challenge at the polls, they questioned a request that Kleinman pay legal fees associated with the court challenge.
Schwartz has a campaign war chest of $2.3 million, according to her latest campaign filings. Kleinman said Friday his campaign has about $5,000 to $10,000 cash on hand.
"I'll strip for you to raise the money," one of his female supporters said.
Neil Deegan, Schwartz's political director, declined to comment as he rushed from the courtroom Friday.
Although Kleinman has often been identified as "the Occupy candidate," the Occupy Philadelphia movement declined to back him or any other political candidates at an endorsement meeting last month. He spent months last year camped on Dilworth Plaza with dozens of other protesters.
The district he and Schwartz are campaigning to represent includes Jenkintown, Abington, and portions of Northeast Philadelphia.
Contact Jeremy Roebuck at 267-564-5218 or firstname.lastname@example.org, or follow on Twitter @jeremyrroebuck.