2:20-cv-04267
D.S.C.Mar 18, 2021Background:
- Thirty named homeowners filed a construction-defect putative class action in Charleston County (Aug 27–Dec 4, 2020) alleging roof defects and asserting negligence, breach of implied warranties, and SCUTPA claims on behalf of a proposed 388-member class.
- Plaintiffs’ counsel had filed a nearly identical state-court suit (Smiley) one day earlier as a duplicate/back-up to avoid potential arbitration by Eastwood; plaintiffs admitted the duplicative filings were strategic.
- Eastwood removed the later-filed action to federal court under CAFA; plaintiffs moved to remand arguing CAFA jurisdiction is lacking because the actions are duplicative.
- The district court raised Colorado River abstention sua sponte, invited briefing, and analyzed whether parallel state and federal proceedings and extraordinary circumstances justified dismissal.
- The court concluded the suits were parallel, the circumstances (risk of piecemeal litigation, purely state-law claims, tactical duplicative filings, and adequacy of the state forum) were exceptional, and therefore abstained and dismissed the federal action rather than resolving the remand/CAFA dispute.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the state and federal suits "parallel" for Colorado River purposes? | The suits are duplicates and involve the same class and claims (so parallel). | Previously called them duplicates for CAFA; later contended differences exist to oppose abstention. | Yes — substantially the same issues and class; procedural amendments do not defeat parallelism. |
| Do "exceptional circumstances" justify Colorado River abstention? | Federal court should exercise jurisdiction; remand sought under CAFA. | Abstention is inappropriate; federal forum should decide. | Yes — risk of piecemeal litigation, state-law claims, first-filed state action, tactical duplicative filings, and adequate state forum weigh in favor of abstention. |
| Does CAFA removal supply federal jurisdiction given the earlier/duplicate state action? | No — duplicative state action defeats CAFA’s similar-action exception, so remand required. | Yes — Smiley counts as a similar action within 3 years; removal proper. | Court did not resolve CAFA remand; instead dismissed on Colorado River abstention grounds. |
| Do plaintiffs’ duplicative filings and defendants’ removal constitute procedural gamesmanship affecting analysis? | The duplicative filing was a legitimate strategy to protect claims. | Removal was proper and not gamesmanship. | Plaintiffs’ counsel admitted tactical duplicative filings; removal viewed as procedural fencing — this conduct weighed heavily in favor of abstention. |
Key Cases Cited
- Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976) (establishes narrow doctrine permitting abstention where parallel state proceedings and extraordinary circumstances exist)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (abstention factors and guidance on prioritizing progress and tactical filing issues)
- Chase Brexton Health Servs., Inc. v. Maryland, 411 F.3d 457 (4th Cir. 2005) (Fourth Circuit articulation of Colorado River factors)
- New Beckley Min. Corp. v. Int’l Union, United Mine Workers of Am., 946 F.2d 1072 (4th Cir. 1991) (definition of "parallel" proceedings)
- Gannett Co. v. Clark Const. Grp., Inc., 286 F.3d 737 (4th Cir. 2002) (Fourth Circuit precedent applying Colorado River analysis)