Aligning with the Seventh and Eighth Circuits, the Second Circuit Court of Appeals has determined that the Class Action Fairness Act’s (CAFA’s) “home state exception,” which “requires district courts to ‘decline to exercise’ jurisdiction over class actions in which two-thirds or more of the class, and the primary defendants, are citizens of the state in which the action was filed,” is not jurisdictional and is not waived if invoked within a reasonable time. Gold v. N.Y. Life Ins. Co., No. 12-2344 (2d Cir., decided September 18, 2013). The issue arose in the context of a wage dispute filed by a former life insurance agent in 2009. The defendant did not invoke the CAFA exception until class discovery, begun in 2011 under the court’s scheduling order, revealed that more than two-thirds of the class consisted of New York citizens.
While the Second Circuit was not prepared to rule that the district court abused its discretion by finding nearly three years a reasonable time for the defendant to invoke the exception, it noted “that there are numerous instances where the home state exception was raised much more promptly than it was in this case, and without full blown class discovery.” According to the Second Circuit, the district court was in the better position to evaluate when the defendant’s motion could have been made, “based on its greater familiarity with the course of the litigation, especially scheduling and discovery matters.”