Understanding The Home State Exception To CAFA's Diversity Jurisdiction

The Class Action Fairness Act ("CAFA"), enacted in 2005, expanded federal jurisdiction over class actions. However, CAFA contains some exceptions, or instances when a federal court may not exercise jurisdiction. One such exception is the "home state exception," which requires a district court to decline to exercise jurisdiction if two-thirds or more of the members of a proposed class, as well as the "primary defendants," are citizens of the state in which the action is filed.¹ It is "designed to draw a delicate balance between making a federal forum available to genuinely national litigation and allowing the state courts to retain cases when the controversy is strongly linked to that state."² The citizenship of the proposed class as a whole determines whether the exception applies.³