Fourth Circuit Affirms Dual Appellate Pathways for CAFA Remand Orders and Clarifies the “Local-Controversy” Exception

Introduction

The consolidated appeals in Elizabeth Goldberg v. Skyline Tower Painting, Inc., No. 24-141 (and related numbers), arise out of a large-scale environmental contamination allegedly caused by the hydro-blasting of a 1,300-foot Baltimore television tower coated with lead-based paint. Property owners living within a 4,000-foot radius of the tower sued the tower owner, Television Tower, Inc. (“TTI”), and the contractor, Skyline Tower Painting, Inc. (“Skyline”), in Maryland state court for negligence and strict liability. Defendants removed the putative class action under the Class Action Fairness Act of 2005 (“CAFA”), prompting the plaintiffs to seek remand under CAFA’s “local-controversy” exception. The district court granted the motion.

In a published opinion authored by Judge Wynn, a Fourth Circuit panel (Chief Judge Diaz, and Judges Wynn and Thacker) tackled two large questions:

1. How may defendants obtain appellate review of a CAFA remand order—through an as-of-right appeal under 28 U.S.C. § 1291, through a discretionary petition under 28 U.S.C. § 1453(c), or both?
2. What evidentiary and substantive showings must a plaintiff make to invoke the local-controversy exception?

Summary of the Judgment

• Appellate Jurisdiction: The court held that an ordinary notice of appeal under § 1291 provides a valid basis for review of CAFA remand orders that fall outside 28 U.S.C. § 1447(c), so petitions under § 1453(c) are optional rather than exclusive. The petitions here were dismissed as “unnecessary.”
• Standard of Proof: A party seeking remand under a CAFA exception must establish the exception by a preponderance of the evidence.
• Citizenship Showing: For the “>⅔ local citizens” element, the court adopted a rebuttable presumption that residency equals citizenship when supported by reliable evidence such as state real-property records.
• Significance of Local Defendant: The local defendant need only be “a significant” basis for, and source of relief in, the litigation—not the most significant. Comparative, not superlative, importance suffices.
• Outcome: All elements of the local-controversy exception were satisfied; therefore, the district court’s remand to state court was affirmed.

Analysis

1. Precedents Cited and Their Influence

• Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336 (1976)—First limited § 1447(d) by tying its bar on appellate review to orders based on § 1447(c) grounds. The Fourth Circuit relied on this narrow construction to find that § 1447(d) did not preclude § 1291 review here.
• Things Remembered, Inc. v. Petrarca, 516 U.S. 124 (1995) & Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (1996)—Reaffirmed Thermtron; served as the “statutory backdrop” against which Congress enacted CAFA. The court presumed Congress was aware of these decisions when drafting § 1453(c).
• Circuit Consensus (5th, 8th, 11th)—Cases such as Cheapside Minerals (5th Cir. 2024), Jacks (8th Cir. 2012), and Simring (11th Cir. 2022) already allowed § 1291 appeals of CAFA remand orders. The Fourth Circuit joined them, deepening the emerging consensus and rejecting dicta from the Tenth Circuit (Reece).
• Quicken Loans Inc. v. Alig, 737 F.3d 960 (4th Cir. 2013)—Explained that multiple defendants can collectively satisfy the “significant basis” / “significant relief” test. This precedent underpinned the court’s refusal to require that the local defendant be the single primary wrongdoer.
• Out-of-Circuit Guidance—The panel drew on Kaufman v. Allstate (3d Cir.), Mason v. LAN (6th Cir.), and Kress Stores (1st Cir. 2024) to flesh out standards for “significant basis,” citizenship, and evidentiary burdens.

2. Legal Reasoning

1. Statutory Interplay: The panel read §§ 1291, 1447(d), and 1453(c) “in pari materia.” Because CAFA removals based on local-controversy abstention do not involve a jurisdictional defect or procedural removal defect (the only § 1447(c) grounds), § 1447(d)’s bar does not apply. Therefore § 1291 review is available unless § 1453(c) is exclusive—which the court concluded it is not.
2. Canon Against Surplusage & Harmonization: Allowing dual pathways does not render § 1453(c) surplusage because that provision still uniquely (i) permits immediate review of denials of remand and (ii) imposes an expedited 10/60-day timeline that litigants may prefer.
3. Burden & Standard: Drawing on default evidentiary norms (E.M.D. Sales, 2025) the court imposed a preponderance standard on plaintiffs invoking CAFA exceptions—high enough to avoid gamesmanship but no higher than defendants’ burden to establish jurisdiction.
4. Residency Presumption: Recognising practical difficulties in proving the domicile of thousands of unknown class members, the court invoked centuries-old common-law presumptions that residence prima facie equals domicile. Reliable state records showing principal residence were deemed sufficient, subject to rebuttal.
5. “Significant” Defined: The court rejected any “superlative” or “plus-factor” requirement. It adopted the comparative test of Kaufman—does the local defendant’s alleged conduct constitute an important ground for relief relative to all defendants? Plaintiffs’ allegations that TTI owned the tower, directed the work, failed to vet Skyline, and failed to obtain permits made TTI plainly significant.

3. Likely Impact of the Decision

• Appellate Strategy under CAFA: Counsel can now file a standard notice of appeal in the Fourth Circuit without the tight 10-day petition window, but may still optionally file a § 1453(c) petition if expedited treatment is desired.
• Litigation Over Local-Controversy Exception: Plaintiffs gain a clearer evidentiary roadmap:
  • Use state property, tax, or voter records for domicile.
  • Emphasize ownership + residence to bolster citizenship ratios.
  • Frame allegations so that at least one local defendant’s role is independently substantial.
• Removal/Remand Motions: Defendants must be ready to rebut the residency-citizenship presumption with concrete evidence (e.g., affidavits showing temporary occupancy). Simply challenging plaintiffs’ methodology without counter-evidence will likely fail.
• Statutory Interpretation Trend: The ruling strengthens a nationwide convergence that § 1453(c) is non-exclusive, potentially setting the stage for Supreme Court resolution if a circuit split deepens.

Complex Concepts Simplified

• CAFA (Class Action Fairness Act): A 2005 statute easing removal of large, interstate class actions to federal court by lowering the jurisdictional hurdles.
• Local-Controversy Exception: A mandatory “safety valve” returning a case to state court when:
  1. > ⅔ of class members are local citizens;
  2. At least one in-state defendant’s acts form a significant basis for the claims and significant relief is sought from it;
  3. The principal injuries occurred in the forum state;
  4. No similar class action was filed in the prior three years.
• § 1291 vs. § 1453(c):
  • § 1291—traditional “as-of-right” appeal of any final district-court order; 30/60 day deadline; no word limit; normal briefing schedule.
  • § 1453(c)—special CAFA vehicle; 10-day petition; court must rule within 60 days of accepting; suited for urgent review but more demanding.
• § 1447(d) Bar: Generally forbids appeals of remand orders, but only when the order is based on a removal defect or lack of subject-matter jurisdiction under § 1447(c). Not triggered here.
• Preponderance of Evidence: Proof that something is more likely than not (i.e., >50% probability).
• Rebuttable Presumption: A default rule accepted unless the opposing party produces evidence showing it is probably untrue.
• “Significant Basis/Relief”: The defendant’s alleged wrongdoing and potential liability must be important in the context of the whole case, but need not dominate.

Conclusion

Goldberg v. Skyline establishes two doctrinal guideposts in the Fourth Circuit:

1. Parties may pursue a CAFA remand order through the ordinary § 1291 route; § 1453(c) remains a parallel, not exclusive, option.
2. Plaintiffs invoking the local-controversy exception carry a preponderance burden that can be met by:
   • Using reliable residency data, triggering a rebuttable citizenship presumption;
   • Showing that a single in-state defendant’s conduct and potential liability are important, even if shared with others.

By clarifying both procedural and substantive facets of CAFA practice, the opinion equips lower courts, litigants, and amici with a cohesive framework for evaluating future removal and remand battles in the Eastern seaboard and beyond.