By Brian Wolfman
In Serrano v. 100 Connect, Inc., No. 06-17366 (Feb. 22, 2007), the
Ninth Circuit has held that in assessing whether a federal district court should or must decline jurisdiction under the "exceptions" to jurisdiction of the Class Action Fairness Act, the burden is on the party resisting a federal forum to show that jurisdiction is lacking. Three other circuits had earlier come to the same conclusion.
As I discussed in an an earlier post, under CAFA, some cases just don’t meet CAFA’s basic jurisdictional requirements: $5 million in controversy, 100 class members, and minimal diversity. 28 U.S.C. 1332(d)(2), (d)(5)(B). Then there are 28 U.S.C. 1332(d)(3) and (d)(4), the supposed "exceptions" to jurisdiction. Both have been called exceptions because they allow for remand or dismissal even where the basic prerequisites have been met. Under (d)(3), the court "may, in the interests of justice and looking at the totality of the circumstances, decline to exercise jurisdiction" based on an evaluation of six factors. Subsection (d)(4) sets out circumstances in which a district court "shall decline" to exercise jurisdiction. The circumstances in which this category is triggered are complicated and not worth exploring in detail here, but they focus on controversies that are highly localized. To me, the (d)(4) category does not comprise an "exception" to CAFA; it’s just a further, albeit unusual, limit on jurisdiction akin to the $5 million, 100-class-member, and minimal diversity limits.