Lexis Nexis - Case Brief

Not a Lexis Advance subscriber? Try it out for free.

Law School Case Brief

Great Lakes Rubber Corp. v. Herbert Cooper Co. - 286 F.2d 631 (3d Cir. 1961)

Rule:

A counterclaim is compulsory if it bears a "logical relationship" to an opposing party's claim. A counterclaim is logically related to the opposing party's claim where separate trials on each of their respective claims would involve a substantial duplication of effort and time by the parties and the courts. Where multiple claims involve many of the same factual issues, or the same factual and legal issues, or where they are offshoots of the same basic controversy between the parties, fairness and considerations of convenience and of economy require that the counterclaimant be permitted to maintain his cause of action. Indeed the doctrine of res judicata compels the counterclaimant to assert his claim in the same suit for it would be barred if asserted separately, subsequently. 

Facts:

Great Lakes Rubber Corporation (“Great Lakes”) brought an action against Herbert Cooper Co., Inc. (“Cooper”), who then filed a counterclaim against Great Lakes. The district court granted Cooper's motion to dismiss Great Lakes' amended complaint on the ground that there was no diversity of citizenship between the parties. Jurisdiction on Cooper’s counterclaim was retained. Great Lakes filed an answer and a counterclaim to Cooper's counterclaim. It repeated in substance the allegations of its amended complaint but was distinguishable in that it was more specific. Cooper filed another motion to dismiss Great Lakes’ complaint based on lack of subject matter jurisdiction. Great Lakes contended that the district court had ancillary jurisdiction of its counterclaim as a compulsory counterclaim arising out of the same transaction and occurrences that were the subject matter of Cooper’s claim. The district court dismissed Great Lakes’ counterclaim.

Issue:

Did the district court err in dismissing Great Lakes’ counterclaim?

Answer:

Yes

Conclusion:

The court reversed the district court's decision after it examined Fed. R. Civ. P. 13(a) and found that Great Lakes’ counterclaim was compulsory. A counterclaim is compulsory if it bears a "logical relationship" to an opposing party's claim. A counterclaim is logically related to the opposing party's claim where separate trials on each of their respective claims would involve a substantial duplication of effort and time by the parties and the courts. Where multiple claims involve many of the same factual issues, or the same factual and legal issues, or where they are offshoots of the same basic controversy between the parties, fairness and considerations of convenience and of economy require that the counterclaimant be permitted to maintain his cause of action. Indeed the doctrine of res judicata compels the counterclaimant to assert his claim in the same suit for it would be barred if asserted separately, subsequently. 

Access the full text case Not a Lexis Advance subscriber? Try it out for free.
Be Sure You're Prepared for Class