Fourth Circuit Clarifies Limits of § 1447(c): No Appellate Fee-Shifting and Stricter Policing of Successive Removals

Introduction

Donald Black v. Mantei & Associates, Ltd., No. 24-1439 (4th Cir. Jul. 30 2025) concerns a securities class action that ricocheted between state and federal court—twice. After a second, unsuccessful attempt to remove the case, the district court awarded the plaintiffs $63,007.50 in fees under 28 U.S.C. § 1447(c). Defendants appealed that award; plaintiffs cross-moved for additional fees incurred on appeal. Writing for a unanimous panel, Judge Richardson affirmed the district court’s fee award but held that § 1447(c) does not authorize a court of appeals to grant fees for defending the appeal itself. The opinion simultaneously underscores the impropriety of “re-removal” on grounds previously rejected—an issue with growing practical importance in complex litigation.

Summary of the Judgment

District court fee award affirmed. The panel agreed that defendants’ second removal lacked an "objectively reasonable" basis, justifying a fee award under § 1447(c).
No appellate fees. The Fourth Circuit rejected plaintiffs’ request for additional attorneys’ fees for work performed on appeal, concluding that § 1447(c) authorizes fee-shifting only in the district court’s remand order.
Key holdings:
1. Successive removals on identical grounds—absent new, jurisdiction-creating facts—are objectively unreasonable and sanctionable.
2. Section 1447(c) does not confer authority on appellate courts to award fees; any fee request on appeal must rely on other sources (e.g., Fed. R. App. P. 38).

Analysis

1. Precedents Cited and Their Influence

Martin v. Franklin Capital Corp., 546 U.S. 132 (2005) – Established that fees under § 1447(c) are warranted where removal lacks an objectively reasonable basis. The Fourth Circuit applied Martin to gauge defendants’ bad-faith re-removal.
Kircher v. Putnam Funds Trust, 547 U.S. 633 (2006) – Clarified that SLUSA’s removal provision is coextensive with its preclusion provision. Kircher anchored the court’s conclusion that, once plaintiffs amended their complaint to exclude all “covered securities,” SLUSA no longer supported jurisdiction.
Royal Canin U.S.A., Inc. v. Wullschleger, 604 U.S. 22 (2025) – Reaffirmed that jurisdiction is determined by the well-pleaded complaint. The panel relied on Royal Canin to discount defendants’ attempt to invoke expert testimony to manufacture federal jurisdiction.
Quackenbush v. Allstate Ins., 517 U.S. 706 (1996) & In re Lowe, 102 F.3d 731 (4th Cir. 1996) – Both cases underscored the non-reviewability of remand orders and prohibition on district-court reconsideration, reinforcing why a second removal was impermissible.
Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975) – Cited for the “American Rule” on attorneys’ fees; the absence of explicit fee authority at the appellate level doomed plaintiffs’ request.
Seventh Circuit line (Garbie, MB Financial, PNC Bank) – Used by plaintiffs but rejected by the Fourth Circuit as inconsistent with statutory text.

2. The Court’s Legal Reasoning

a. Impropriety of the Second Removal

The panel dissected defendants’ two asserted grounds:

SLUSA. Because the operative, amended complaint expressly disclaimed any claim “in connection with” covered securities, § 77p(b) preclusion—and hence § 77p(c) removal—did not apply. Subsequent expert testimony could not rewrite the complaint.
Federal-question jurisdiction under § 1441. The only arguable federal issue was whether the Barclays notes were “covered securities,” a question the court deemed non-substantial under Gunn v. Minton. No standalone federal cause of action existed.

With both pathways blocked, the panel held the second removal lacked any objectively reasonable basis—especially given an earlier remand order that squarely addressed the same arguments.

b. Successive Removals and Objective Unreasonableness

Quoting Seventh Circuit dicta and Wright & Miller, the court stressed that “multiple removals” after an initial remand, on the same grounds, border on bad faith. Section 1447(d) bars reconsideration “on appeal or otherwise”; an attempt to re-remove is functionally an end-run around that bar. This ruling strengthens deterrence against tactical “ping-pong” removal practice.

c. Textual Limits of § 1447(c) Fee-Shifting

Turning to plaintiffs’ cross-request, the panel performed a straightforward textual analysis:

“An order remanding the case may require the payment of…expenses…incurred as a result of the removal.” § 1447(c) (emphasis added).

Because the court of appeals neither issues a remand order nor determines removal in the first instance, it lacks statutory authority to shift fees. The panel also emphasized the “American Rule” presumption and refused to import a policy-based exception pioneered by the Seventh Circuit.

3. Impact of the Decision

Appellate practice: Litigants in the Fourth Circuit can no longer rely on § 1447(c) for appellate fees when defending a district-court fee award. Counsel must instead invoke Rule 38 or § 1912 and satisfy the higher “frivolousness” threshold.
Removal strategy: Defendants contemplating a second removal must articulate a genuinely new basis—not merely re-argue points implicitly or explicitly decided in the first remand. Failure invites fee sanctions.
SLUSA litigation: The opinion confirms plaintiffs’ ability to “plead around” SLUSA through binding stipulations and cements that factual disputes over whether particular securities are “covered” belong in state court once SLUSA is out of the case.
Inter-circuit tension: The decision deepens a split with the Seventh Circuit on appellate fee-shifting under § 1447(c), potentially inviting Supreme Court review or legislative clarification.

Complex Concepts Simplified

Removal vs. Remand. “Removal” means transferring a lawsuit from state to federal court; “remand” sends it back. 28 U.S.C. § 1447 governs what happens after removal.
SLUSA. The Securities Litigation Uniform Standards Act bars large state-law securities class actions involving nationally traded securities and allows defendants to remove such cases so federal courts can dismiss them.
Well-pleaded complaint rule. Jurisdiction is decided by what the plaintiff says in the complaint—not by the defendant’s defenses or later evidence.
Objective reasonableness standard. Even an incorrect removal avoids fee sanctions if a reasonable lawyer could have thought removal proper. Repeat removals on identical grounds usually flunk this test.
American Rule on fees. Each side generally pays its own lawyers unless a statute clearly says otherwise or the court imposes sanctions for misconduct.

Conclusion

Donald Black delivers two significant clarifications: (1) Successive removals recycling previously rejected jurisdictional theories are not merely erroneous but sanctionably unreasonable; and (2) § 1447(c)’s fee-shifting power ends at the district-court door—appellate courts must look elsewhere to shift fees. Practitioners in the Fourth Circuit must now calibrate removal decisions with heightened caution and calibrate fee applications on appeal with this new limitation firmly in mind. Beyond its immediate parties, the opinion fortifies comity between state and federal courts, promotes litigation efficiency, and sets the stage for a potential resolution of the emerging circuit split on appellate fee-shifting under § 1447(c).