777 F.Supp.3d 533
D.S.C.2025Background
- Homeowners in the Legacy at Pine Forest subdivision in Dorchester County, South Carolina, allege defective installation of roofing and exterior vinyl siding on 207 single-family homes by D.R. Horton, Inc. (DRH) and various subcontractors.
- Plaintiffs filed a putative class action in state court alleging negligence, gross negligence, and breach of implied warranties against DRH and subcontractors Archer Exteriors, Professional Exteriors II, and others.
- DRH removed the case to federal court under the Class Action Fairness Act (CAFA), asserting federal jurisdiction based on minimal diversity and amount in controversy.
- Plaintiffs filed a motion to remand under CAFA's local controversy exception, while DRH filed motions to compel arbitration and stay proceedings.
- The court considered whether the local controversy exception to CAFA applied, focusing on citizenship of the class, local defendants, nature of relief and claims, and whether a similar class action had been filed in the past three years.
- The court granted plaintiffs' motion to remand, finding the local controversy exception fully satisfied and thus mooting other motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held (Court's Ruling) |
|---|---|---|---|
| Whether >2/3 of class are SC citizens | 98% of homeowners have SC address & tax records; residency/domicile presumption applies | Residency alone insufficient; class not narrowly defined; evidence lacking for citizenship | Plaintiffs met burden; presumption reasonable based on residency, tax, vehicle registrations |
| Whether local defendants form significant basis | SC-based subcontractors' conduct central; relief sought directly from locals, not just DRH | DRH as out-of-state main actor; unclear local defendants are primary targets | Local subcontractors' alleged conduct forms significant basis; aggregation of locals appropriate |
| Whether significant relief is sought from locals | All class members seek repairs/damages directly from local subcontractors for construction defects | Plaintiffs haven’t quantified or allocated relief among defendants | Seeking joint/several relief for all; local defendants' work affects all homes, meeting “significant relief” requirement |
| Whether similar class action was previously filed | Vriens action involves different subdivisions, building codes, and class members (not Legacy subdivision) | Vriens covers same types of defects in the region, overlaps defendants/class definition | Vriens factually/analytically distinct—different locations, harms, issues; local controversy exception not barred |
Key Cases Cited
- In re Blackwater Sec. Consulting, LLC, 460 F.3d 576 (4th Cir. 2006) (party seeking removal bears burden of establishing jurisdiction)
- Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148 (4th Cir. 1994) (removal doubts resolved in favor of state jurisdiction)
- Scott v. Cricket Commc'ns, LLC, 865 F.3d 189 (4th Cir. 2017) (CAFA exception analysis; citizenship requirements)
- Quicken Loans Inc. v. Alig, 737 F.3d 960 (4th Cir. 2013) (aggregation of local defendant conduct for CAFA exception)
- Kaufman v. Allstate N.J. Ins. Co., 561 F.3d 144 (3d Cir. 2009) (significant basis/significant relief standard for CAFA local controversy exception)