FRCP 13: Counterclaims

Compulsory v. Permissive Counterclaims

13(a) Compulsory Counterclaim:

1. 13(a)(1)(A): If D’s counterclaim arises out of the same transaction or occurrence as the claim against him, he must plead it in the present case or lose his right to do so.

   1. A Compulsory Counterclaim must be brought to the existing court regardless if the court has jurisdiction or not.

2. 13(a)(1)(B): Compulsory counterclaims may NOT require the addition of another party over whom the court cannot acquire jurisdiction

3. 13(a)(2): Exceptions are if D has already pleaded the claim against P in another existing lawsuit - 13(a)(2)(a), or no personal jurisdiction -13 (a)(2)(B)

4. Policy purpose is to incentivize efficiency of courts and reduce its operating costs.

5. (See Wigglesworth)

13(b) Permissive Counterclaim:

6. Does not have to arise out of the same transaction or occurrence. Not compulsive but can be split into a separate trial by the judge (Rule 42).

   1. Under Rule 42(b), a court may sever unrelated claims for convenience, to avoid prejudice, or to expedite and economize

   2. Proper jurisdiction of the claim is necessary.

   3. Also want the warring parties to resolve their issues all at once

   4. Wigglesworth v. The Teamsters, (E.D.VA 1975) p.215: Teamsters claimed counterclaims against Wigglesworth, but court dismissed them as permissive claims between non-diverse parties and that were grounded solely in state law. Compulsory counterclaim.

Cross-claims - Rule 13

7. 13(h) allows for the addition of a person as a party to a counterclaim or crossclaim through Rules 19 and 20.

8. 13(g) Crossclaims Against a Coparty:

   1. Like compulsory counterclaims, the crossclaim must arise out of the same transaction or occurrence that is the subject matter of the original action. However, the crossclaim is always permissive and defendants may choose not to bring (as a policy matter, not compulsory).

      1. Fairness outweighs efficiency – Ds should not be obliged to litigate each other in front of P, which only helps P.

      2. Once a party cross-claims against the other, that party must bring any compulsory counterclaims at that point

      3. Once a cross-claim is asserted, then unrelated claims can be brought under 18 as well.

FRCP 18 – Joinder of Claims

1. Common law restricted joinders, but Rule 18(a) is permissive to joinder of claims

   1. There is no common transaction or occurrence requirement in Rule 18(a), unlike in Rule 20(a).

   2. “A party asserting a claim, counterclaim, cross-claim or third-party claim may join, as independent or alternative claims, as many claims as it has against an opposing party.”

      1. Ex: If there is a car accident that results in a fight later, Plaintiff may join claims of negligence and assault against defendant.

      2. However court may sever unrelated claims under 42(b)

   3. Rule 18(a) authorizes joinder of multiple claims, or claims against multiple parties, but does not confer subject matter jurisdiction on the court to hear those claims.

      1. For every claim subject matter jurisdiction must be analyzed separately.

FRCP 20 – Permissive Joinder of Parties

2. Less permissive than 18(a) - need common events and related claims

   1. claims must arise out of the same transaction or occurrence, or series or of transactions or occurrences AND there is a common question of law and fact.

   2. Series of transactions language is more expansive than Rule 13.

3. Multiple Plaintiffs can sue together under Rule 20(a)(1)

   1. Kedra v. City of Philadelphia, (E.D.Pa 1978) p.245: Multiple Ps sues multiple Ds for policing conspiracy against their family. 20(a)(1) motion accepted because multiple crucial events linked multiple Ds together and unified by an alleged conspiracy.

   2. Insolia v. Phillip Morris Inc, (W.D.Wis. 1999) p.247: 3 P’s jointly sue D for suppressing evidence on dangers of smoking, but “transaction and occurrence or series” test was not passed – the three Ps had factual dissimilarities, and all they had in common was that the three alleged the conspiracy. Also, by joining the three P’s jury confusion would become enormous.

4. Plaintiff(s) can sue multiple Defendants under Rule 20(a)(2)

   1. Policy purpose is efficiency by litigating all claims that involve a single transaction or occurrence, and avoids inconsistent judgment on the same issue.

5. 20(a)(3) a joined P or D need not assert or defend against all claims, and the courts can grant judgment to one or more P or D depending on their respective rights and liabilities.

Joinder Hypo:

6. Wright is main contractor on construction job, Edison is electrical subcontractor

7. Volt works for Edison. While driving Edison car, Volt collides with Wright and Ellsworth

8. Suit Options for Volt:

   1. Under 20(a)(1), Volt and Edison can sue Ellsworth

   2. Under 20(a)(2), Volt can sue Ellsworth and Wright

   3. Under both rules, Volt and Edison can sue Wright and Ellsworth

10. If Volt sues Wright and Ellsworth under 20(a)(2), Wright file a cross-claim against Ellsworth under 13(g), and any unrelated claim under 18(a) once the cross-claim is filed. Also Rule 13 counterclaims against Volt.

FRCP 19: Compulsory Joinder of Parties

1. Should some absent party be joined? 19(A)

2. Can they be joined? 19(A)

   1. Reasons they can't - subject matter jurisdiction, personal jurisdiction, venue, service

3. If they can't be joined, should suit be dismissed? 19(B)

Rule 19(a) - Joinder if feasible

1. 19(a)(1)(A): to protect interest of current parties in suit (OR)

   1. Addresses when a court cannot adequately provide redress to the parties who are before the court, unless an absentee is also brought into the case.

   2. Janney v. Shepard Niles, (3rd Cir. 1993) p.254 - Court ruled that persuasive effects of its ruling on other courts adjudicating non-party Underwood’s claims was not sufficient to “impair or impede” Underwood’s interests, that PA law allowed Shepard Niles to be fully liable and that there was no risk of double recovery. Joinder unnecessary under 19(a)(1)(A) because district court can give complete relief to parties.

2. ...

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