Permissive Counterclaim

Permissive Counterclaim

A claim by a defendant opposing the claim of the plaintiff and seeking some relief from the plaintiff for the defendant.

Once a plaintiff sues a defendant in a civil action, the defendant has the right to assert a legal claim of her own against the plaintiff. This is known as a counterclaim. A counterclaim makes assertions that the defendant could have made in a lawsuit if the plaintiff had not already begun an action. A counterclaim is distinct from a mere defense, which seeks only to defeat the plaintiff's lawsuit, in that it seeks a form of relief. There are two types of counterclaims: compulsory counterclaims and permissive counterclaims. Both are governed in federal court by rule 13 of the Federal Rules of Civil Procedure. The rules in state courts are similar.

The compulsory counterclaim arises from the same transaction or occurrence that forms the basis of the plaintiff's suit. For example, a car accident between two drivers leads to a personal injury lawsuit, but the defendant asserts in a compulsory counterclaim that the plaintiff actually owes him damages for injuries. A compulsory counterclaim generally must be part of the initial answer to the plaintiff's action and cannot be made later in the suit or in a separate lawsuit.

By contrast, the permissive counterclaim arises from an event unrelated to the matter on which the plaintiff's suit is based. For example, John Smith breaks his leg while visiting the home of Jane Doe. Smith sues Doe, alleging that she negligently left her child's roller skate on her front porch. In a permissive counterclaim, Doe asserts that Smith owes her money. The court will rule separately on plaintiff Smith's and defendant Doe's respective claims; if both claims are permitted to proceed, Smith v. Doe will involve the two parties' respective allegations of Negligence and a bad debt.

Counterclaims are usually valid only if it is possible to make the same claim by starting a lawsuit. Thus, in the example of Smith and Doe, Doe can only make her permissive counterclaim if the Statute of Limitations on collection of the debt has not expired. Permissive counterclaims need not be made in the initial Pleading; they can be made at a later time or even in another lawsuit. This flexibility may help the defendant's legal strategy: she can wait and sue in a different court, in order to have another judge hear the case or to avoid arguing the merits of separate claims before the same jury.

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3) the United States Court of Appeals for the First Circuit addressed whether a federal court could properly exercise jurisdiction over a permissive counterclaim that did not have its own independent basis for subject matter jurisdiction, but rather was related to another counterclaim raised by the defendant.
the First Circuit addressed whether jurisdiction was proper where a permissive counterclaim was related, not to the plaintiff's claim, but to a compulsory counterclaim asserted by the defendant.
the First Circuit addressed the issue of whether a federal court can properly exercise supplemental jurisdiction over a permissive counterclaim based on its relation to another counterclaim asserted by the defendant.
1984) (exercising jurisdiction over permissive counterclaim based on ancillary jurisdiction, not defensive "set-off exception); McCaffrey v.
15) After an unsuccessful attempt by GNAP to have counts two and three dismissed as permissive counterclaims, the court entered a default judgment for Verizon based on GNAP's discovery violations and held all of the defendants jointly and severally liable for the full amount of the judgment.
section] 1367, district courts addressed compulsory and permissive counterclaims through what was deemed pendent and ancillary jurisdiction.
26) Adding to the confusion of pendent and ancillary jurisdiction was whether permissive counterclaims, under Federal Rule of Civil Procedure 13(b), came in under the court's supplemental jurisdiction.
30) Nevertheless, circuit courts remain divided on the issue of whether permissive counterclaims can be heard under the court's supplemental jurisdiction, while it is a generally accepted principle that compulsory counterclaims must be heard due to the preclusive effect of res judicata.
13(a)-(b) (defining compulsory and permissive counterclaims respectively); Fed.
rejects the conventional wisdom that permissive counterclaims require their own independent basis for subject matter jurisdiction, and particularly rejects the so-called "set-off exception.
2000) (dismissing counterclaim and stating permissive counterclaims require "independent basis [for] federal jurisdiction"), and Iglesias v.
preclusion should not apply to such permissive counterclaims.