Failing To Plead Compulsory Counterclaims in Federal and State Courts. | Brett Johnson | December 05, 2014


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Failing To Plead Compulsory Counterclaims in Federal and State Courts.

Although not stated explicitly in Rule 13, “[a] failure to plead a compulsory counterclaim bars a party from bringing a later independent action on that claim.” 6 Charles Alan Wright, Arthur R. Miller, and Mary Kay Kane, Federal Practice and Procedure § 1417 (3d ed.). Indeed, “a contrary result would destroy the effectiveness of Rule 13(a).” Id. But the “precise authority” upon which this rule relies remains unclear. Id. As commentators have noted, most of the courts that have considered this issue “have spoken in terms of ‘res judicata’ preventing the later assertion of the claim.” Id. In other words, the first judgment acts as a bar to re-litigating the case. However, “[o]ther authorities, including several courts, have relied on the theories of ‘waiver’ or ‘estoppel’ as the basis for preventing a second suit on the omitted counterclaim.” Id. Ultimately, under either approach, any party that fails to pursue a compulsory counterclaim is prohibited from later pursuing that claim in subsequent litigation in federal courts.

But what about pursuing claims in state courts after the party failed to raise them as compulsory counterclaims in federal court? Under 28 U.S.C. § 2283, “A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” Can Rule 13 fit within one of the three exceptions to this statutory rule? The federal courts that have considered this issue have split on this question. Compare Brown v. McCormick, 608 F.2d 410, 416 (10th Cir. 1979) (because plaintiffs were required to bring their claim as a compulsory counterclaim in a previous federal action, they “cannot bring it in their subsequent action” in Arizona state court), with Aeroquip Corp. v. Chunn, 526 F.Supp. 1259, 1260 (N.D. Al. 1981) (“Although the Alabama court could use its equivalent rule to bar an action that it considered a compulsory counterclaim in a prior federal action, that should be a problem of the state court applying its own rule, and not one for this court.”). (In the reverse situation of a party bringing a claim in federal court that it failed to bring as a compulsory counterclaim in state court under the relevant state rules, the U.S. Supreme Court has held that “state courts are completely without power to restrain” the federal court from considering the claim, although federal judges remain free to apply res judicata themselves based on that prior state court action. Donovan v. City of Dallas, 377 U.S. 408, 412-13 (1964).)


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December 05, 2014

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Brett Johnson


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