USCA4 Appeal: 24-1395 Doc: 63 Filed: 08/05/2025 Pg: 1 of 24
PUBLISHED
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
No. 24-1395
JAMILA GRICE, on behalf of herself and all others similarly situated,
Plaintiff – Appellant,
v.
INDEPENDENT BANK,
Defendant – Appellee.
------------------------------
ANDREW BRADT, Professor of Law,
Amicus Supporting Appellant.
Appeal from the United States District Court for the District of South Carolina, at Spartanburg. Timothy M. Cain, Chief District Judge. (7:30-cv-01948-TMC)
Argued: March 4, 2025 Decided: August 5, 2025
Before DIAZ, Chief Judge, and AGEE and BENJAMIN, Circuit Judges.
Reversed and remanded by published opinion. Judge Benjamin wrote the opinion in which Chief Judge Diaz joined. Judge Agee wrote a separate opinion, concurring in the judgement. USCA4 Appeal: 24-1395 Doc: 63 Filed: 08/05/2025 Pg: 2 of 24
ARGUED: Matthew W.H. Wessler, GUPTA WESSLER LLP, Washington, D.C., for Appellant. Jonathan M. Knicely, NELSON MULLINS RILEY & SCARBOROUGH, LLP, Columbia, South Carolina, for Appellee. ON BRIEF: Sophia Goren Gold, KALIEL GOLD PLLC, Oakland, California; Gregory A. Beck, GUPTA WESSLER LLP, Washington, D.C.; David Matthew Wilkerson, VAN WINKLE LAW FIRM, Asheville, North Carolina, for Appellant. A. Mattison Bogan, Jacob D. Kea, NELSON MULLINS RILEY & SCARBOROUGH LLP, Columbia, South Carolina, for Appellee. Andrew Bradt, Professor of Law, BERKELEY LAW, Berkeley, California; Jonathan M. Streisfeld, KOPELOWITZ OSTROW P.A., Fort Lauderdale, Florida, for Amicus Curiae.
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DEANDREA GIST BENJAMIN, Circuit Judge:
Plaintiff Jamila Grice appeals the district court’s denial of her motion for class
certification. For the reasons stated below, we reverse.
I.
A.
Grice, a South Carolina resident, sued Defendant Independent Bank
(“Independent”), an entity organized under Michigan law, in South Carolina federal district
court. Grice contends Independent engaged in three wrongful overdraft fee assessment
practices. First, Independent considered customer accounts to be overdrawn even when
they had enough money to cover a transaction. Second, Independent generated fees by
charging more than one insufficient-funds fee for a single transaction. Third, Independent
charged two separate out-of-network fees for a single withdrawal from an out-of-network
ATM.
Grice moved to certify nationwide classes for each type of wrongful fee Independent
allegedly assessed. Independent opposed the motion, arguing that S.C. Code Ann. § 15-5-
150 prohibited Grice from representing nationwide classes. The district court agreed and
denied Grice’s motion for class certification. Grice timely petitioned for review of the
district court’s class certification decision. See Fed. R. Civ. P. 23(f). We permitted the
appeal.
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II.
We review a district court’s class certification decision only for “clear abuse of
discretion.” Berry v. Schulman, 807 F.3d 600, 608 (4th Cir. 2015) (quoting Flinn v. FMC
Corp., 528 F.2d 1169, 1172 (4th Cir. 1975)). “A district court per se abuses its discretion
when it makes an error of law or clearly errs in its factual findings.” Thorn v. Jefferson-
Pilot Life Ins. Co., 445 F.3d 311, 317 (4th Cir. 2006).
S.C. Code Ann. § 15-5-150 is nicknamed the “Door Closing Statute.” See, e.g.,
Proctor & Schwartz, Inc. v. Rollins, 634 F.2d 738, 739 (4th Cir. 1980). It “closes” the
courthouse doors to certain actions. The law provides:
An action against a corporation created by or under the laws of any other state, government or country may be brought in the circuit court:
(1) By any resident of this State for any cause of action; or
(2) By a plaintiff not a resident of this State when the cause of action shall have arisen or the subject of the action shall be situated within this State.
§ 15-5-150. Section 15-5-150 forbids, for example, a non-South Carolina plaintiff from
suing a non-South Carolina corporate defendant for claims which do not “arise[]” out of or
concern a “subject . . . situated within” South Carolina. See id.
In Szantay v. Beech Aircraft Corp., 349 F.2d 60 (4th Cir. 1965), this court
considered, pursuant to Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), and its
progeny, whether South Carolina federal district courts must apply the Door Closing
Statute in diversity actions. Szantay, 349 F.2d at 62–63; see also Gasperini v. Ctr. for
Humans., Inc., 518 U.S. 415, 427 (1996) (describing the Erie doctrine’s command that
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federal district courts sitting in diversity apply state substantive law and federal procedural
law). The court answered in the affirmative and held that South Carolina federal courts
exercising diversity jurisdiction must apply the Door Closing Statute “unless there are
affirmative countervailing federal considerations.” Szantay, 349 F.2d at 62–64.
Over the following decades, with little to no fanfare, we intermittently reaffirmed
this holding. See, e.g., Proctor, 634 F.2d at 739–40 (“In Szantay . . . this court held that a
South Carolina federal court exercising diversity jurisdiction must apply § 15-5-150
‘unless there are affirmative countervailing federal considerations.’ ” (quoting Szantay,
349 F.2d at 64)).
In Farmer v. Monsanto Corp., 579 S.E.2d 325 (S.C. 2003), the Supreme Court of
South Carolina reinterpreted the Door Closing Statute. First, the court overruled its own
precedent and held that § 15-5-150 did not concern jurisdiction but regulated the “capacity
to sue.” Id. at 327–28 (citation omitted); see Szantay, 349 F.2d at 62–63 (“It is conceded
that South Carolina state courts do not have jurisdiction over a suit brought by a nonresident
against a foreign corporation on a foreign cause of action.”). Second, and more important
here, the court held that the Door Closing Statute’s requirements applied to unnamed class
members. Farmer, 579 S.E.2d at 328. This means that “the class itself cannot include
members who would not be able to bring the action in their individual capacities under the
door-closing statute.” Id.
Many district courts in South Carolina have applied Farmer to putative class actions
as an extension of Szantay. See, e.g., Tomczak v. United Servs. Auto. Ass’n, No. 5:21-cv-
01564, 2022 WL 1022647, at *2 (D.S.C. Mar. 31, 2022); see also Moore v. Equitrans, L.P.,
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27 F.4th 211, 220 (4th Cir. 2022) (“When sitting in diversity, a federal court must ‘apply
the law of the forum state as it is interpreted by the state’s highest court.’ ” (quoting
Adamson v. Columbia Gas Transmission, LLC, 579 F. App’x 175, 177 (4th Cir. 2014) (per
curiam))). For our part, we have not opined on whether and how Farmer affects Szantay’s
command that district courts apply § 15-5-150 in diversity actions absent a countervailing
federal interest. See Ward v. Dixie Nat’l Life Ins. Co., 257 F. App’x 620, 628 (4th Cir.
2007) (per curiam) (declining to address “what effect the reinterpreted door-closing statute
has on class membership in suits being heard in South Carolina federal courts sitting in
diversity”).
B.
Independent opposed Grice’s motion for class certification. Independent contended
that under § 15-5-150 and Farmer, nonresidents whose claims arose outside of South
Carolina could not be included in Grice’s proposed classes. By extension, Independent
concluded, if nonresidents were excluded from the proposed classes, then Grice could not
meet Rule 23(a)’s numerosity requirement. Grice, of course, disagreed. Also citing
Farmer, Grice argued that the Door Closing Statute did not apply in federal court. In the
alternative, Grice argued that Rule 23 directly conflicted with the Door Closing Statute
such that, under Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., 559
U.S. 393 (2010), the district court should decline to apply § 15-5-150.
The district court sided with Independent, applied the Door Closing Statute to
putative class members, and limited membership in Grice’s proposed classes to only South
Carolina residents. Consequently, the district court held that Grice could not meet Rule
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23’s numerosity requirement and denied Grice’s motion for class certification. See Grice
v. Indep. Bank, No. 7:20-cv-1948, 2024 WL 1287203, at *9, 11–12 (D.S.C. Mar. 26, 2024).
III.
Grice first argues that the Supreme Court of South Carolina’s reinterpretation of the
Door Closing Statute in Farmer “forecloses the law’s application in federal court.”
Appellant’s Br. at 17. 1
In Farmer, the Supreme Court of South Carolina held that the Door Closing
Statute’s requirements applied to class members. See 579 S.E.2d at 328. In so ruling, the
court rejected the plaintiff’s and the trial court’s contention that this court’s decision in
Central Wesleyan College v. W.R. Grace & Co., 6 F.3d 177 (4th Cir. 1993), 2 was
“controlling.” 3 Farmer, 579 S.E.2d at 328. The Farmer court then went a step further and
rebuffed the idea that the Door Closing Statute even applied in federal court: “By its terms,
. . . § 15-5-150 applies only to actions brought in the circuit court. The statute clearly does
not apply to federal suits . . . . ” Id. Grice argues that this statement represents an
authoritative interpretation of South Carolina law that we are bound to follow. See
1 Citations to the parties’ briefs refer to the ECF header at the top of each page. 2 In a footnote in Central Wesleyan College v. W.R. Grace & Co., 6 F.3d 177 (4th Cir. 1993), we declined to apply the Door Closing Statute because of the “countervailing federal policy in favor of consolidating asbestos litigation.” Id. at 186 n.3. 3 It is not clear to us why our interpretation of a South Carolina law would be “controlling” on the Supreme Court of South Carolina in this context. Nevertheless, this is what the Farmer plaintiff argued. 7 USCA4 Appeal: 24-1395 Doc: 63 Filed: 08/05/2025 Pg: 8 of 24
Appellant’s Br. at 18 (“The South Carolina Supreme Court’s holding in Farmer should
have ended the issue. The state’s highest court ‘plainly’ has the ‘power and prerogative’
to ‘narrow statutes so as to limit the statute’s scope’ as it did here.” (quoting Toghill v.
Clarke, 877 F.3d 547, 557 (4th Cir. 2017))).
Grice’s argument is a nonstarter. First, the quoted language is not Farmer’s holding.
It’s dictum. See, e.g., Lennear v. Wilson, 937 F.3d 257, 273 (4th Cir. 2019) (“Dictum is
‘statement in a judicial opinion that could have been deleted without seriously impairing
the analytical foundations of the holding[.]’ ” (alteration in original) (quoting Pittston Co.
v. United States, 199 F.3d 694, 703 (4th Cir. 1999))). Second, the quoted language is not
an authoritative interpretation of state law, but a view on how Erie may apply here. Federal
courts, however, decide such questions—not state supreme courts. Cf. Guar. Tr. Co. of
N.Y. v. York, 326 U.S. 99, 109 (1945) (“It is . . . immaterial whether statutes of limitation
are characterized either as ‘substantive’ or ‘procedural’ in State court opinions in any use
of those terms unrelated to the specific issue before us. Erie R. Co. v. Tompkins was not
an endeavor to formulate scientific legal terminology. It expressed a policy that touches
vitally the proper distribution of judicial power between State and federal courts.”); Harter
v. Vernon, 101 F.3d 334, 342 (4th Cir. 1996) (“Our holdings on questions of state law do
not bind state courts, nor do state court determinations on questions of federal law control
us.”). If we were to mechanically apply Farmer’s suggestion that the Door Closing Statute
does not apply in federal court, as Grice urges, we would create an end-run around Erie.
This cannot be the law.
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The sole case Grice relies on to support her argument is Toghill v. Clarke, 877 F.3d
547 (4th Cir. 2017). Grice argues that Toghill stands for the proposition that the Supreme
Court of South Carolina had the “power and prerogative” in Farmer to “narrow” and
“limit” the Door Closing Statute’s scope. Appellant’s Br. at 18 (quoting Toghill, 877 F.3d
at 557). Grice therefore concludes that we are “ ‘bound to accept the state supreme court’s
construction’ ” of the Door Closing Statute—namely Farmer’s assertion that § 15-5-150
does not apply in federal court. See id. (quoting Toghill, 877 F.3d at 558). Grice, however,
cites Toghill completely out of context.
In Toghill, the court reviewed the district court’s denial of a habeas petition. 877
F.3d at 549. Toghill was convicted under Virginia’s anti-sodomy statute. Id. at 550. While
his appeal was pending, we held that Lawrence v. Texas, 539 U.S. 558 (2003), rendered
that law unconstitutional. Id. In response to Toghill’s facial challenge, the Supreme Court
of Virginia issued a limiting interpretation of the law in question and upheld Toghill’s
conviction. Id. at 554–56. Toghill then filed a habeas petition, arguing that the Supreme
Court of Virginia’s narrowing interpretation was contrary to or an unreasonable application
of Lawrence. Id. at 550.
The district court denied the petition and this court affirmed. See id at 556. We
observed that where “the state court has provided an authoritative, narrowing construction
of a state statute, the ‘federal court must . . . consider [the] limiting construction that a state
court . . . has proffered’ when evaluating a facial challenge.” Id. at 558 (alterations in
original) (quoting Village of Hoffman Ests. v. The Flipside, Hoffman Ests., Inc., 455 U.S.
489, 494 n.5 (1982)); see id. at 557 (“Federal courts ‘have long respected the State Supreme
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Courts’ ability to narrow state statutes so as to limit the statute’s scope to unprotected
conduct.’ ” (quoting Osborne v. Ohio, 495 U.S. 103, 120 (1990))).
Toghill is inapposite. Grice is not bringing a facial challenge to a state law. Nor
did the Supreme Court of South Carolina in Farmer attempt to “narrow” the Door Closing
Statute to avoid a constitutional conflict. It just expressed its disagreement with our
application of federal law—the Erie doctrine. See Farmer, 579 S.E.2d at 558. Farmer
therefore does not settle the question before us.
IV.
Grice next argues that the Door Closing Statute and Federal Rule of Civil Procedure
23 conflict such that, under Shady Grove, Rule 23 displaces the Door Closing Statute
entirely.
“[T]he Supreme Court has provided us with a well-established, two-step framework
for mediating any potential conflict” between a Federal Rule of Civil Procedure and a state
rule of law. See Pledger v. Lynch, 5 F.4th 511, 518 (4th Cir. 2021) (first citing Hanna v.
Plumer, 380 U.S. 460 (1965); and then citing Shady Grove, 559 U.S. 393). “We first ask
whether the Federal Rules ‘answer[] the question in dispute.’ ” Id. at 518–19 (alteration in
original) (quoting Shady Grove, 559 U.S. at 398). “If the Federal Rules do answer that
question, then they govern, notwithstanding [the Door Closing Statute]—unless, at step
two of the analysis, we find the relevant Federal Rule[] invalid under the Constitution or
the Rules Enabling Act.” Id. at 519 (first citing Shady Grove, 559 U.S. at 398; and then
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citing Hanna, 380 U.S. at 471) (cleaned up). “But if there is a valid Federal Rule that
answers the ‘same question’ as the [Door Closing Statute], then our work is done, and we
apply the Federal Rules without wading into the ‘murky waters’ of Erie . . . and its distinct
choice-of-law rules.” Id. (quoting Shady Grove, 559 U.S. at 398–99).
Independent claims that we do not reach Shady Grove at all because our decision in
Szantay binds us. Appellee’s Br. at 25. We disagree. In Szantay, this court considered—
under Erie—whether the Door Closing Statute applies in diversity actions. Szantay, 349
F.2d at 63–64. Szantay did not consider whether the Door Closing Statute conflicted with
a federal procedural rule. That is the separate (and preliminary) Shady Grove question we
face today.
Because Szantay answered an Erie question, it cannot bind us with respect to the
Shady Grove question. And because Szantay did not consider a conflict with a federal
procedural rule, it cannot permit (much less command) us to skip over the analysis Shady
Grove requires.
With that, we turn to Shady Grove.
In Shady Grove, the Supreme Court considered whether a New York plaintiff could
file a federal class action lawsuit for statutory penalties despite a state statute that
prohibited “class actions in suits seeking penalties or statutory minimum damages.” 559
U.S. at 396 (citing N.Y. Civ. Prac. Law Ann. § 901 (West 2006)). The Court held that the
New York statute did not trump Rule 23.
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The Court reasoned that Rule 23 “creates a categorical rule entitling a plaintiff
whose suit meets the specified [class-action] criteria to pursue his claim as a class action.”
Id. at 398. Put differently, “Rule 23 provides a one-size-fits-all formula for deciding the
class-action question.” Id. at 399. Given that the New York law “attempt[ed] to answer
the same question” as Rule 23—when a class action could be maintained—Rule 23
controlled. See id. at 399–401 (noting that the New York law “prevents the class actions
it covers from coming into existence at all”).
In sum, the Court held that Rule 23 “explicitly” “empowers a federal court to certify
a class in each and every case” where Rule 23’s criteria are met. Id. at 399 (cleaned up);
id. at 399–400 (emphasizing that “may” in Rule 23 places discretion in the plaintiff’s
hands—“[h]e may bring his claim in a class action if he wishes”); id. at 406 (“Rule 23
unambiguously authorizes any plaintiff, in any federal civil proceeding, to maintain a class
action if the Rule’s prerequisites are met. We cannot contort its text, even to avert a
collision with state law that might render it invalid.” (citing Walker v. Armco Steel Corp.,
446 U.S. 740, 750 n.9 (1980))).
C.
We turn to Grice’s case.
And we consider whether Rule 23 answers the same question as the Door Closing
Statute: when may a class action be maintained? “For these purposes, the Federal Rules
may ‘answer’ the question without speaking to it expressly.” Pledger, 5 F.4th at 518
(quoting Burlington N. R.R. Co. v. Woods, 480 U.S. 1, 4–5 (1987)). If the Rule’s scope “is
‘sufficiently broad’ either to ‘cause a direct collision’ with [the Door Closing Statute] or
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‘implicitly, to control the issue,’ then the Federal Rules govern notwithstanding state law.”
Id. (quoting Burlington N. R.R. Co., 480 U.S. at 4–5); see also Shady Grove, 559 U.S. at
399 (finding that Federal Rule providing “one-size-fits-all formula” displaces more
specific state rule addressing same question).
The federal standard for maintaining a class action is Federal Rule of Civil
Procedure 23. Rule 23(a) requires that the prospective class comply with four
prerequisites: (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of
representation. See Fed. R. Civ. P. 23(a). “[T]he class action must [also] fall within one
of the three categories enumerated in Rule 23(b).” Gunnells v. Healthplan Servs., Inc., 348
F.3d 417, 423 (4th Cir. 2003). Where a plaintiff meets these requirements, “Rule 23
permits [the] class action[] . . . and a State cannot limit that permission by structuring one
part of its statute to track Rule 23 and enacting another part that imposes additional
requirements.” Shady Grove, 559 U.S. at 401. The Door Closing Statute, however,
requires more. In South Carolina state court, a plaintiff must meet the requirements of
South Carolina Rule of Civil Procedure 23(a) (similar to those of Rule 23) and the Door
Closing Statute—for herself and each class member. See Farmer, 579 S.E.2d at 328.
Requiring that Grice satisfy Rule 23 and the Door Closing Statute to maintain her
putative class action violates Shady Grove. See 559 U.S. at 399, 401 (holding that “a State
cannot limit [Rule 23’s ‘one-size-fits-all formula’] by structuring one part of its statute to
track Rule 23 and enacting another part that imposes additional requirements”); see also
id. 399–400 (“Allstate asserts that Rule 23 neither explicitly nor implicitly empowers a
federal court ‘to certify a class in each and every case’ where the Rule’s criteria are met.
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But that is exactly what Rule 23 does: It says that if the prescribed preconditions are
satisfied ‘[a] class action may be maintained’—not ‘a class action may be permitted.’ ”
(cleaned up)). “[F]airly construed,” Rule 23 is broad and permits a representative to sue
on behalf of a class if its requirements are met. See Burlington N. R.R. Co., 480 U.S. at 5;
Shady Grove, 559 U.S. at 399 (“Rule 23 provides a one-size-fits-all formula for deciding
the class-action question.”). Rule 23, as interpreted by Shady Grove, and the Door Closing
Statute directly conflict, so Rule 23 alone controls.
Independent struggles to fight this straightforward conclusion. Independent
acknowledges that the Door Closing Statute bars nationwide class actions. Nevertheless,
it contends that Rule 23 and the Door Closing Statute do not conflict. To Independent, the
Door Closing Statute regulates the “eligibility of . . . class members to bring suit in [either
state or federal court in] South Carolina.” Appellee’s Br. at 33. Rule 23, on the other hand,
permits a representative “to sue on behalf of a class if certain requirements are met,” but
does not “grant a class representative the right to represent a nationwide class.” Id. at 32
(emphasis added).
To state Independent’s argument is to refute it. Independent asks us to hold that
Rule 23 permits a class representative to maintain suit “on behalf of [the] class” at the same
time that the Door Closing Statute regulates—and in this case would forbid—the class’s
very participation. Under Shady Grove, we cannot accept this reasoning. Rule 23
“implicitly . . . control[s]” the scope of the prospective class, “leaving no room for the
operation of” the Door Closing Statute. See Burlington N. R.R. Co., 480 U.S. at 5 (first
quoting Walker, 446 U.S. at 749–50 & n.9; and then citing Hanna, 380 U.S. at 471–72).
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Rule 23 leaves no room because it “permits all class actions that meet its requirements [to
proceed], and a State cannot limit that permission” by “impos[ing] additional
requirements”—as the Door Closing Statute does. See Shady Grove, 559 U.S. at 401.
D.
This leaves the step-two question: whether Rule 23 is “ultra vires,” “that is, outside
Congress’s constitutional rule making power or the statutory authorization provided by the
Rules Enabling Act.” 4 Pledger, 5 F.4th at 520–21 (first quoting Shady Grove, 559 U.S. at
398–99; and then citing Hanna, 380 U.S. at 471).
A federal rule is constitutionally valid if it is “rationally capable of classification”
as procedural. Burlington N. R.R. Co., 480 U.S. at 5 (quoting Hanna, 380 U.S. at 472).
And it is valid under the Rules Enabling Act if it does not “abridge, enlarge or modify any
substantive right.” Id. (quoting 28 U.S.C. § 2072(b)). “The Federal Rules of Civil
Procedure enjoy ‘presumptive validity under both the constitutional and statutory
constraints,’ and the Supreme Court has ‘[s]o far . . . rejected every challenge to the Federal
Rules that it has considered under the Rules Enabling Act.’ ” Pledger, 5 F.4th at 521 (first
quoting Burlington N. R.R. Co., 480 U.S. at 6; and then quoting Abbas v. Foreign Pol’y
Grp., LLC, 783 F.3d 1328, 1336 (D.C. Cir. 2015)).
Independent does not dispute Rule 23’s validity under the Constitution. Instead, it
argues that the rule runs afoul of the Rules Enabling Act. But on that point, the Shady
4 Of course, if we were to conclude that Rule 23 is invalid, the Door Closing Statute wouldn’t automatically apply. Instead, we’d “wade into Erie’s murky waters.” Shady Grove, 559 U.S. at 398. Fortunately, we have no need to do so today, given our conclusion that Rule 23 is valid. 15 USCA4 Appeal: 24-1395 Doc: 63 Filed: 08/05/2025 Pg: 16 of 24
Grove majority fractured: Justice Stevens parted ways with Justice Scalia (now writing for
a plurality) on the proper approach for deciding whether a federal rule abridges, enlarges,
or modifies a substantive right. Some circuits have concluded that Justice Stevens’s
concurrence, as the narrowest opinion supporting the judgment, controls. E.g., Whitlock v.
FSL Mgmt., LLC, 843 F.3d 1084, 1091 n.2 (6th Cir. 2016) (applying “Marks rule,” Marks
v. United States, 430 U.S. 188, 193 (1977)). We have not addressed the question. And
Independent has ignored the issue altogether. But because Rule 23 is valid under either
approach, we do not decide which opinion controls.
Independent argues that Rule 23 is invalid for two reasons. First, Independent
contends that applying Rule 23 enlarges substantive rights and encourages forum shopping.
See Appellee’s Br. at 34 (arguing that Rule 23 “permit[s] non-South Carolina residents to
circumvent the Door Closing Statute” and bring cases in South Carolina federal district
court which they could not bring in South Carolina state court). Second, Independent
argues that Rule 23 abridges its substantive rights by permitting “out-of-state plaintiffs who
have not suffered injury in” South Carolina to sue it in South Carolina federal district court.
See id. These arguments are unconvincing.
Under the plurality’s view, “[t]he test” is not whether Rule 23 “affects
[Independent’s] substantive rights.” See Shady Grove, 559 U.S. at 407 (plurality opinion).
Nor is it whether Rule 23, to some degree, “produce[s] forum shopping.” Id. at 415–16
(“The short of the matter is that a Federal Rule governing procedure is valid whether or not
it alters the outcome of the case in a way that induces forum shopping. To hold otherwise
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would be to ‘disembowel either the Constitution’s grant of power over federal procedure’
or Congress’s exercise of it.” (quoting Hanna, 380 U.S. at 473–74)).
In other words, “[w]hat matters is what the rule itself regulates: If it governs only
‘the manner and the means’ by which the litigants’ rights are ‘enforced,’ it is valid; if it
alters ‘the rules of decision by which [the] court will adjudicate [those] rights,’ it is not.”
Id. at 407 (quoting Miss. Publ’g Corp. v. Murphree, 326 U.S. 438, 446 (1946)).
The rule at issue here—Rule 23—is procedural. It “leaves the parties’ legal rights
and duties intact and the rules of decision unchanged.” See id. at 408. Or said slightly
differently, “insofar as [Rule 23] allows willing plaintiffs to join their separate claims
against the same defendants in a class action,” it “falls within [the Rules Enabling Act]’s
authorization” and is valid. See id.
And we reach the same conclusion under Justice Stevens’s approach. The Door
Closing Statute is procedural and not “so intertwined with a state right or remedy that it
functions to define the scope of the state-created right.” Id. at 423 (Stevens, J., concurring
in part and concurring in the judgment).
Accordingly, Rule 23 governs Grice’s claims, and the district court erred by
applying the Door Closing Statute. See Pledger, 5 F.4th at 519 (“[I]f there is a valid Federal
Rule that answers the ‘same question’ as the [Door Closing Statute], then our work is done,
and we apply the Federal Rules without wading into the ‘murky waters’ of Erie . . . and its
distinct choice-of-law rules.” (quoting Shady Grove, 559 U.S. at 398–99)).
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For the reasons stated above, we reverse the district court’s order denying Grice’s
motion for class certification and remand for further proceedings.
REVERSED AND REMANDED
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AGEE, Circuit Judge, concurring in the judgment:
I agree with the majority’s end result here and therefore concur in the judgment. But
I would reach that result in a way that better adheres to the respect we owe the Supreme
Court of South Carolina’s interpretation of its own state’s law. So out of principles of
comity, I write separately.
As the majority ably points out, the question presented here is whether South
Carolina’s Door-Closing Statute forecloses certification of a class in federal court under
Federal Rule of Civil Procedure 23. The Door-Closing Statute provides:
An action against a corporation created by or under the laws of any other state, government or country may be brought in the circuit court:
(1) By any resident of this State for any cause of action; or
(2) By a plaintiff not a resident of this State when the cause of action shall have arisen or the subject of the action shall be situated within this State.
S.C. Code Ann. § 15-5-150.
Whenever we, as a federal court, are asked to apply a state law, our base obligation
is to apply that law as the forum state’s highest court has interpreted it. City of Huntington
v. AmerisourceBergen Drug Corp., 96 F.4th 642, 647 n.10 (4th Cir. 2024); see Priv. Mortg.
Inv. Servs., Inc. v. Hotel & Club Assocs., Inc., 296 F.3d 308, 312 (4th Cir. 2002) (“As a
federal court sitting in diversity, we have an obligation to apply the jurisprudence of South
Carolina’s highest court, the South Carolina Supreme Court.”). And according to the
Supreme Court of South Carolina, the Door-Closing Statute, “[b]y its terms, . . . applies
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only to actions brought in the circuit court.[1] The statute clearly does not apply to federal
suits . . . .” Farmer v. Monsanto Corp., 579 S.E.2d 325, 328 (S.C. 2003) (emphasis in
original).
The Supreme Court of South Carolina has told us that the Door-Closing Statute’s
language means that it applies only in South Carolina state circuit courts, not in any federal
court. That should end our inquiry.
The majority agrees that the Door-Closing Statute does not foreclose certification
of a class in federal court, but only after relying on the Supreme Court’s decision in Shady
Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., 559 U.S. 393 (2010). That
impulse is strong, but it seems to me incorrect. Through Farmer’s interpretation of the
Door-Closing Statute’s language, the Supreme Court of South Carolina obviated any need
to choose between state and federal law—and therefore any need to apply Shady Grove.
Like the basic principles behind the Erie Doctrine, Shady Grove’s two-step
framework comes in when it is necessary to “mediat[e] any potential conflict” between
applicable federal and state rules. Pledger v. Lynch, 5 F.4th 511, 518 (4th Cir. 2021) (first
citing Hanna v. Plumer, 380 U.S. 460 (1965); and then citing Shady Grove, 559 U.S. at
393); see 19 Wright & Miller’s Federal Practice & Procedure Jurisdiction § 4501 (3d ed.
2025) (explaining that the Erie doctrine “help[s] define which law—federal or state—is to
be applied to any given issue in federal court”). Put simply, Shady Grove informs our
1 In South Carolina’s state judicial system, “[t]he Circuit Court is the State’s court of general jurisdiction.” South Carolina Judicial Branch, Circuit Court (last visited July 21, 2025), https://www.sccourts.org/courts/trial-courts/circuit-court/ [https://perma.cc/739X- JSU3]. 20 USCA4 Appeal: 24-1395 Doc: 63 Filed: 08/05/2025 Pg: 21 of 24
decision making only when there is a threshold conflict between potentially applicable state
and federal law.
That triggering conflict seems absent here. If a state law, by its own limiting
language, does not apply to federal court proceedings, there would not seem to be a choice
as to whether to apply it or a corresponding federal rule. Rather, any potential conflict
between the Door-Closing Statute and federal law is of our own artificial creation; South
Carolina’s legislature wrote a law that “applies only to actions brought in the circuit court.”
Farmer, 579 S.E.2d at 328 (emphasis in original). The majority’s position here is
understandable—“the interplay of federal and state law” under Erie’s shadow involves
“wonky stuff.” Pledger v. Lynch, 5 F.4th at 527 (Quattlebaum, J., concurring). But we do
not need to get into the wonky particularities of esoteric legal doctrine here because the
Supreme Court of South Carolina obviated any potential threshold conflict between state
and federal law in Farmer.
The majority says that conclusion is a “nonstarter” and “cannot be the law,” but I’m
not convinced that either of its proffered reasons for that proposition—that Farmer’s
statutory interpretation was (1) dictum that we should ignore, or (2) not authoritative
because it is similar to an Erie question—allow us to ignore our general deference to a
state’s highest court. Ante at 8.
First, I disagree that the Supreme Court of South Carolina’s interpretation of the
Door-Closing Statute in Farmer is dictum. In Farmer, that court took an appeal to consider
whether the Door-Closing Statute “limit[s] a class action against a foreign corporation in
state court,” and held it did. 579 S.E.2d at 327. In reaching that conclusion, the court had
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to deal with our decision opining otherwise in Central Wesleyan College v. Kaiser Gypsum
Co., 6 F.3d 177 (4th Cir. 1993), after the trial court and the plaintiffs relied on it. The
Supreme Court of South Carolina held the lower court’s reliance on Central Wesleyan was
wrong because our precedent was “not controlling.” 579 S.E.2d at 328. Fair enough. Our
decisions are never controlling on any South Carolina state court as to matters of state law.
But tellingly, the court went on to explain why reliance on a federal case’s interpretation of
the Door-Closing Statute was misplaced: “[b]y its terms, . . . § 15–5–150 applies only to
actions brought in the circuit court. The statute clearly does not apply to federal suits and
the Fourth Circuit’s ruling on its non-application in that case is irrelevant.” Id. (emphasis
in original).
We define dictum as “a ‘statement in a judicial opinion that could have been deleted
without seriously impairing the analytical foundations of the holding—that, being
peripheral, may not have received the full and careful consideration of the court that uttered
it.’” Payne v. Taslimi, 998 F.3d 648, 654–55 (4th Cir. 2021) (quoting Pittston Co. v. United
States, 199 F.3d 694, 703 (4th Cir. 1999)).
The Supreme Court of South Carolina’s interpretation of the Door-Closing Statute
does not fit that definition. The statement’s importance to the opinion is plain—to explain
why the lower court erred in relying on Central Wesleyan. Farmer, 579 S.E.2d at 328.
There is no reason to think it did not receive the “full and careful consideration” of the
South Carolina Supreme Court. Payne, 998 F.4th at 654. To the contrary, the statement
bears the hallmarks of a brief, but adequately thorough, exercise of statutory interpretation.
As jurists, we regularly add emphasis to a statute’s language as a means of helping illustrate
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that a statute says what we find it to mean. That rhetorical tool is hardly used for flippant
observations. The South Carolina Supreme Court emphasized the term ‘circuit court’ to
show that its inclusion in § 15-5-150 cabined the statute’s application to state circuit courts,
or “[b]y its terms,” the Door-Closing Statute “clearly does not apply to federal suits.”
Farmer, 579 S.E.2d at 328. A concise interpretation does not mean it was made without
adequate consideration. For those reasons, the state Supreme Court’s interpretation of the
Door-Closing Statute in Farmer is not dictum. 2
Second, respecting the Supreme Court of South Carolina’s interpretation in Farmer
here would not “create an end-run around Erie.” Ante at 8. It is, of course, true that the
Supreme Court of South Carolina’s characterization of the Door-Closing Statute as
substantive or procedural would not control an Erie analysis because such questions are
reserved for federal courts. Guar. Tr. Co. of N.Y. v. York, 326 U.S. 99, 109 (1945). But that
is not what Farmer did. Characterizing a statute and interpreting what it means are different
endeavors. While it may be a federal courts’ province to characterize a law for Erie
purposes in deciding which law applies to the case before them, it is emphatically the
Supreme Court of South Carolina’s prerogative to determine what their state’s law means.
2 Even if that statement by the South Carolina Supreme Court were dictum, that would not mean we could dismiss it outright. Our precedent compels us to use “well considered dicta” to predict how state courts would construe a statute. Priv. Mortg. Inv. Servs., 296 F.3d at 312. Indeed, our state-level counterpart thought it elementary that courts should be “reluctant to disregard” dictum. Sherlock Holmes Pub, Inc. v. City of Columbia, 697 S.E.2d 619, 621 (S.C. Ct. App. 2010). For the same reasons explained above, Farmer’s interpretation of the Door-Closing Statute was at the very least “well considered.” Priv. Mortg. Inv. Servs., 296 F.3d at 312.
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See Priv. Mortg. Inv. Servs., 296 F.3d at 312. Farmer involved the latter, as the court
construed the Door-Closing Statute’s language as effectively cabining its application to
cases brought in state circuit courts. 579 S.E.2d at 328. It does not appear to be an attempt
to apply Erie that we may disregard. Ante at 8.
Because we are bound by the Supreme Court of South Carolina’s interpretation of
a South Carolina statute, I would hold that the Door-Closing Statute does not foreclose
certification of a class in federal court because that statute only applies in state circuit
courts, not federal district courts, under Farmer v. Monsanto Corp., 579 S.E.2d at 328.
That is sufficient basis to reverse, and it’s unnecessary to opine on additional principles to
reach that result. I therefore concur in the judgment.