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Discretionary Exception
Practical Law Glossary Item 9-518-1232 (Approx. 3 pages)
Glossary
Discretionary Exception
A statutory exception to federal jurisdiction under the Class Action Fairness Act of 2005 (CAFA). The discretionary exception instructs that federal district courts may, in the interests of justice and looking at the totality of the circumstances, decline to exercise jurisdiction over a class action where greater than one-third but less than two-thirds of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the state in which the class action was originally filed (28 U.S.C. § 1332(d)(3)).
CAFA directs courts to consider the following in deciding whether to decline jurisdiction under the discretionary exception:
- Whether the claims asserted involve matters of national or interstate interest.
- Whether the claims asserted will be governed by the laws of the state where the action was originally filed or by the laws of other states.
- If the class action has been pleaded in a manner that seeks to avoid federal jurisdiction.
- If the action was brought in a forum with a distinct nexus to:
- the class members;
- the alleged harm; or
- the defendants.
- The number of citizens of the state in which the action was originally filed in all proposed plaintiff classes in the aggregate is substantially larger than the number of citizens from any other state, and the citizenship of the other members of the proposed class is dispersed among a substantial number of states.
- During the three-year period before the filing of the class action, one or more other class actions asserting the same or similar claims on behalf of the same or other persons have been filed.
For more information about CAFA generally, and this exception specifically, see Practice Note, Class Action Fairness Act of 2005 (CAFA): Overview: Exceptions Based on Geography.