How to Analyze Supplemental Jurisdiction on a Civil Procedure Essay

🚨 CORRECTION (21:18 to 21:40): Under 28 U.S. Code § 1367(c), a federal court can decline to exercise supplemental jurisdiction over a claim (including a compulsory counterclaim) if: (1) the claim raises a novel or complex issue of State law, (2) the claim substantially predominates over the claim or claims over which the federal court has original jurisdiction, (3) the federal court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

A "compulsory" counterclaim is compulsory, because a pleading MUST state as a counterclaim any claim that—at the time of its service—the pleader has against an opposing party. A "permissive" counterclaim is permissive, because a pleading MAY state as a counterclaim against an opposing party any claim that is not compulsory.
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How to Analyze Supplemental Jurisdiction on a Civil Procedure Essay

SUBJECT MATTER JURISDICTION

A federal court must have subject matter jurisdiction to hear and decide a case before it.

SUPPLEMENTAL JURISDICTION

Supplemental jurisdiction allows a federal court with valid subject matter jurisdiction over a case to hear additional claims over which the court would NOT independently have jurisdiction if ALL the claims constitute the same case or controversy. Claims constitute the “same case or controversy” if they arise out of a common nucleus of operative fact (meaning all the claims arise out of the same transaction or occurrence).

FEDERAL QUESTION CASES

A federal court sitting in federal question jurisdiction may hear a pendent state law claim under supplemental jurisdiction if the state law claim arises out the same transaction or occurrence as the federal law claim.

DIVERSITY CASES

There are three types of claims where supplemental jurisdiction is commonly tested in diversity cases: compulsory counterclaims, permissive counterclaims, and cross-claims.

A compulsory counterclaim is a counterclaim (usually the defendant countersuing the plaintiff) that arises out of the same transaction or occurrence as the original claim filed. A federal court sitting in diversity jurisdiction has supplemental jurisdiction over a compulsory counterclaim.

A permissive counterclaim is a counterclaim (usually the defendant countersuing the plaintiff) that does NOT arise out of the same transaction or occurrence as the original claim filed. A permissive counterclaim can only be heard if it independently satisfies diversity jurisdiction.

A cross-claim is a claim filed by a plaintiff against another plaintiff or by a defendant against a co-defendant. A federal court sitting in diversity jurisdiction has supplemental jurisdiction over a cross-claim if the cross-claim arises out of the same transaction or occurrence as the original claim.
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