In Black v. Mantei & Associates, Ltd.. No. 24-1439 (4th Cir. July 30, 2025), the Fourth Circuit holds that the fee-shifting provision applicable to removal petitions, 28 U.S.C. § 1447(c), does not authorize – let alone mandate – attorney’s fees for defending an award of attorney’s fees on appeal, rejecting decisions in the Seventh Circuit that fees should be automatic in such circumstances.
Section 1447(c) provides that upon a grant of remand to state court from a case removed to federal court, “an order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.”
In this case, defendants twice attempted removal of a securities-fraud case from South Carolina state court. While the defendants were initially successful in having the action removed under the Securities Litigation Uniform Standards Act (“SLUSA”), 15 U.S.C. § 77p. plaintiffs “to eliminate all possibility that SLUSA would apply. The district court accordingly remanded the case, explaining in an opinion how the class action no longer fell within SLUSA and how no other basis for federal jurisdiction was present.”
Three years later, defendants again attempted removal on essentially the same grounds as the original removal petition. Under law-of-the-case, the district court adhered to the original order remanding the action. And under the authority of 28 U.S.C. § 1447(c), “the district court required Defendants to pay Plaintiffs’ attorneys’ fees” for defending the second removal.
On appeal, the Fourth Circuit affirms the award of fees in the district court but denies an award of appellate fees. The panel holds, as to the latter, that § 1447(c) applies expressly to fees incurred in the district court alone.
“Our decision in this appeal will not be an order remanding the case. Indeed, we are not even reviewing an order remanding the case. Instead, we are reviewing the decision to award fees in an order remanding the case. We cannot discern in § 1447(c) any authority to award fees in such a posture . . . . [A]n order remanding the case—and thus an award of fees under § 1447(c)— can only come from the district court, not the court of appeals. This comports with § 1447’s clear and exclusive textual emphasis on the district court.”
“And even if the text of § 1447(c) authorized fee awards on appeal—it doesn’t—a fee award would be discretionary at most” because the statute only provides that a remand order “may” require payment of attorney’s fees, not “shall.” “When Congress wishes to make fee-shifting automatic, it knows how to use mandatory language . . . . It did not do so here.”
“The Seventh Circuit’s contrary interpretation of § 1447(c)” in Garbie v. DaimlerChrysler Corp., 211 F.3d 407 (7th Cir. 2000), and other cases “is impossible to square with the statutory text. This appears to be because the Seventh Circuit has never analyzed the statutory text . . . . The Seventh Circuit may well have been right in Garbie that an automatic fee award on appeal makes good policy sense. But we cannot read such a policy into § 1447(c).”
Paul Mollica's Federal Courts Blog 