Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca6-19-03137/USCOURTS-ca6-19-03137-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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RECOMMENDED FOR PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 20a0041p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

QUALITY ASSOCIATES, INC.,

Plaintiff-Appellant,

v.

THE PROCTER & GAMBLE DISTRIBUTING LLC; YANNIS 

SKOUFALOS; PATRICK PAOLINO; ELIZABETH RADKE;

MICHELLE EGGERS,

Defendants-Appellees.

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No. 19-3137

Appeal from the United States District Court

for the Southern District of Ohio at Cincinnati.

No. 1:18-cv-00075—Timothy S. Black, District Judge.

Argued: October 17, 2019

Decided and Filed: February 10, 2020

Before: MOORE, McKEAGUE, and GRIFFIN, Circuit Judges.

_________________

COUNSEL

ARGUED: William B. Fecher, STATMAN, HARRIS & EYRICH, LLC, Cincinnati, Ohio, for 

Appellant. Eric K. Combs, DINSMORE & SHOHL, LLP, Cincinnati, Ohio, for Appellees. 

ON BRIEF: William B. Fecher, STATMAN, HARRIS & EYRICH, LLC, Cincinnati, Ohio, for 

Appellant. Eric K. Combs, DINSMORE & SHOHL, LLP, Cincinnati, Ohio, for Appellees.

MOORE, J., delivered the opinion of the court in which McKEAGUE, J., joined. 

GRIFFIN, J. (pp. 10–12), delivered a separate dissenting opinion.

>

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_________________

OPINION

_________________

KAREN NELSON MOORE, Circuit Judge. In February 2018, Quality Associates, Inc. 

(“QAI”) sued Procter & Gamble Distributing LLC (“P&G”) in Ohio federal court for breaking a 

contract with it in a racially discriminatory manner. See 42 U.S.C. § 1981. But the problem was, 

P&G had already sued QAI in Ohio state court over the same contractual dispute underlying 

QAI’s § 1981 claim, and that litigation was still ongoing. So P&G moved to dismiss QAI’s 

federal suit, arguing that its § 1981 claim was a compulsory counterclaim to the state litigation, 

see Ohio Civ. R. 13(A), and thus needed to be brought in that proceeding. The district court 

agreed and accordingly dismissed QAI’s suit. We conclude, however, that a federal court cannot 

enforce a state compulsory-counterclaim rule against a federal litigant while the relevant state 

litigation is still pending. For this reason, we REVERSE the district court’s judgment and 

REMAND for further proceedings consistent with this opinion.

I. BACKGROUND

A. The Parties’ Longstanding Business Relationship Sours

QAI is a Cincinnati-based, minority-owned business that engages in a variety of 

commercial activities, ranging from designing manufacturing plants to assembling retail “pointof-sale displays.” R. 1 (Federal Compl. ¶¶ 13–16) (Page ID #6). For decades, it had a 

“flourishing and rewarding relationship” with P&G. Id. (Page ID #2).

In 2015, however, P&G replaced its existing QAI liaisons with a new set of managers, 

specifically, individual defendants Yannis Skoufalos, Patrick Paolino, Elizabeth Radke, and 

Michelle Eggers. Id. ¶¶ 22–23 (Page ID #7). In the months following this change in 

management, QAI alleges, P&G engaged in demeaning and racially biased behavior toward 

QAI’s leadership and employees, such that QAI could not adequately perform its end of the thenexisting contract between the companies, called the “Purchase Agreement.” More specifically, 

QAI alleges, P&G’s new team “t[ook] over QAI’s business and operations” (and thereby 

“increased” QAI’s “costs”), treated non-minority competitors to QAI far better than it treated 

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QAI, and even “allow[ed]” its employees “to make disparaging comments to and about QAI, its 

management and its employees.” Id. ¶ 89 (Page ID #16).

Worse yet, QAI asserts, in February 2016 P&G “forced” QAI to enter into a 

“Termination Agreement” that essentially “terminated” the Purchase Agreement, and, by 

extension, the parties’ business relationship. Id. ¶¶ 37, 97 (Page ID #9, 18). Indeed, QAI 

continues, the Termination Agreement was “so unfavorable” to QAI that it resulted in QAI’s 

“liquidation.” Id. And, again, according to QAI, P&G took this action against it for racially 

biased reasons.

B. The State-Court Litigation (Part One)

QAI, however, was not the only one who believed that the parties’ crumbling business 

relationship was tainted with illegality. Rather, in early 2017, P&G accused QAI of breaching a 

contract related to the Termination Agreement, called the “M2K Agreement,” allegedly in 

retaliation for P&G not paying QAI outstanding invoices owed under the Termination 

Agreement. Consequently, on January 25, 2017, P&G sued QAI in Ohio state court for breach 

of contract and injunctive relief.

QAI timely answered and asserted counterclaims. In its pleading, QAI raised many of 

the allegations detailed above, namely, that P&G’s “one-side[d] decisions and interference [with 

QAI’s business]” caused “QAI’s financial condition” “to deteriorate,” and that, eventually, 

P&G’s actions “forced” QAI to sell its assets “well below what [those] assets were worth.” QAI 

First State Court Counterclaim ¶¶ 15–17 (P&G App’x at 188). However, despite referencing 

some of P&G’s allegedly racist behavior, see, e.g., id. ¶¶ 2, 6–7 (P&G App’x at 186–87), QAI 

did not include a § 1981 claim in its pleading, or any other claim based on racial discrimination. 

Rather, QAI asserted simply (1) a breach of contract claim under the Termination Agreement 

(with respect to approximately $2.5 million in allegedly unpaid invoices), and (2) a declaratory 

judgment claim under the M2K Agreement (with respect to the proper amount QAI was to be 

paid under that agreement).

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C. The Federal-Court Litigation

Then, on February 1, 2018, this hitherto-straightforward contract litigation took an odd 

procedural turn. That is, on that date, QAI (now represented by different counsel) filed a standalone § 1981 claim against P&G in Ohio federal court. And, notably, QAI’s federal complaint 

contained many of the same allegations set forth in its state-court counterclaim, albeit with a 

greater emphasis on P&G’s allegedly racist acts.

P&G promptly moved to dismiss QAI’s federal complaint, asserting that QAI’s suit 

failed either because QAI released and waived its § 1981 claim against P&G through the 

“release” and “final settlement” provisions of the Termination Agreement, or because QAI’s 

§ 1981 claim was a “compulsory counterclaim” to the ongoing state-court litigation and thus 

needed to be resolved in that proceeding. See Ohio Civ. R. 13(A) (“A pleading shall state as a 

counterclaim any claim which at the time of serving the pleading the pleader has against any 

opposing party, if it arises out of the transaction or occurrence that is the subject matter of the 

opposing party’s claim . . .”) (emphasis added); Rettig Enters., Inc. v. Koehler, 626 N.E.2d 99, 

102–03 (Ohio 1994) (holding that a claim “arises out of the transaction or occurrence that is the 

subject matter of the opposing party’s claim” if it is “logically related to the opposing party’s 

claim”) (citation omitted).

The district court agreed with P&G’s second ground for dismissal, i.e., the compulsorycounterclaim argument, and accordingly granted P&G’s motion to dismiss. See Quality Assocs., 

Inc. v. Procter & Gamble Distrib., LLC, 2019 WL 340472, at *5 (S.D. Ohio Jan. 28, 2019) 

(finding that QAI’s § 1981 claim was “logically related to the claims in the State Court 

Litigation” because “the claims involve many of the same factual issues” and because “they will 

both require interpretation of the Purchase Agreement and the Termination Agreement”). As a 

result, the district court did not consider P&G’s other argument for dismissal, i.e., the waiverand-release argument. Id. at *6 n.6.

QAI timely appealed the district court’s judgment of dismissal.

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D. The State-Court Litigation (Part Two)

In a yet another odd procedural twist, however, around the same time that QAI launched 

its appeal in this court, it requested permission to add a § 1981 claim to its state-court 

counterclaim; the claim was identical to QAI’s (then-dismissed) federal claim. See QAI 

Proposed Second Am. Counterclaim (QAI App’x at 116-34). P&G opposed the motion.

The state trial court entertained oral argument, and, on April 16, 2019, denied QAI’s 

request. See State Court Order (P&G App’x at 297). The state court reached this decision for 

two reasons: “(a) QAI’s claims under 42 U.S.C. § 1981 asserted in the proposed Second 

Amended Counterclaim were compulsory counterclaims that should not be added to the case at 

this stage,” and (b), even if the claims could be added as a matter of procedure, “QAI released its 

claims . . . by way of the release contained in the Termination Agreement between the parties.” 

Id. Accordingly, the court ruled, “the filing of the Second Amended Counterclaim would be 

futile.” Id.

Shortly thereafter, the parties filed their federal appellate briefs. Per the publicly 

accessible docket, the state litigation remains ongoing.1

II. DISCUSSION

On appeal, QAI argues that the district court erred by construing its § 1981 claim as a 

compulsory counterclaim, subject to Ohio Rule of Civil Procedure 13(A), because the claim is 

purportedly not “logically related” to the contract claims at issue in the state-court proceeding. 

Appellant’s Br. at 13. In response, P&G claims that QAI’s appeal fails either because the state 

court’s April 16 order rejected QAI’s § 1981 claim on the merits—therefore precluding QAI 

from contending otherwise in this court—or because the claim is a compulsory counterclaim 

under Ohio law. P&G also raises the waiver-and-release defense it raised in the district court, 

and again (successfully) in the state trial court.

1

See Procter & Gamble Distrib. LLC v. Quality Assocs., Inc., No. A-17-00465 

(Hamilton Cty. Court of Common Pleas), available at https://www.courtclerk.org/data/case_summary.php?sec=hist

ory&casenumber=A+1700465&court%5BCCV%5D=on&submit.x=24&submit.y=13 (last accessed January 10, 

2020).

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Although we agree with P&G and the district court that QAI’s § 1981 claim is 

analytically best classified as a compulsory counterclaim to the state-court proceeding, we 

disagree that that fact alone subjects QAI’s claim to dismissal. Rather, we hold, because a 

federal court cannot enforce a state compulsory-counterclaim rule against a federal litigant 

outside the preclusion context, and because QAI’s claim is not yet precluded here (because the 

state court has not yet entered a final judgment), the district court lacked authority to base its 

judgment of dismissal on this ground. Consequently, we reverse and remand.2

As an initial matter, we must explain why a federal court cannot enforce a state 

compulsory-counterclaim rule against a federal litigant unless it is part and parcel of a preclusion 

ruling. After all, one might ask, if a plaintiff files a claim in federal court that plainly should 

have been brought as a counterclaim in a state litigation, why should it matter whether the claim 

is precluded? The purpose of Ohio’s compulsory-counterclaim rule is “to avoid a multiplicity of 

actions and to achieve a just resolution by requiring in one lawsuit the litigation of all claims 

arising from common matters.” Rettig, 626 N.E.2d at 103. Allowing a federal court to enforce 

the rule, irrespective of procedural posture, seems to advance that purpose. In fact, one might 

note, had the parties’ ongoing litigation been in federal court, rather than state court, federal law 

would have almost certainly provided the district court a basis on which to dismiss, consolidate, 

stay, or transfer the later-filed suit. See, e.g., Baatz v. Columbia Gas Transmission, LLC, 814 

F.3d 785, 789 (6th Cir. 2016) (discussing the “first-to-file” rule); 6 Arthur R. Miller, Mary Kay 

Kane, and A. Benjamin Spencer, Federal Practice and Procedure § 1418 (3d ed. 2019) 

(discussing various “flexible procedures” available to federal courts dealing with duplicative 

claims filed in other federal courts). Why should the result be any different just because one 

litigation is in state court and the other is in federal court?

2

In so ruling, we acknowledge that neither party raised the question of a federal court’s power to enforce a 

state compulsory-counterclaim rule in its briefing. However, because this legal issue is an antecedent and outcomedispositive one, and because it implicates important considerations of federal-court authority, we exercise our 

discretion to address it. See Harris v. Klare, 902 F.3d 630, 635–36 (6th Cir. 2018) (“‘Ordinarily an appellate court 

does not give consideration to issues not raised below.’ . . . This rule is not absolute, however, and it is within the 

ambit of our discretion to entertain questions not raised below.”) (quoting Hormel v. Helvering, 312 U.S. 552, 556 

(1941)); see also U.S. Nat’l Bank of Oregon v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 447 (1993) (“[A] court 

may consider an issue ‘antecedent to . . . and ultimately dispositive of’ the dispute before it, even an issue the parties 

fail to identify and brief”) (quoting Arcadia v. Ohio Power Co., 498 U.S. 73, 77 (1990)).

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At least two factors explain the differential treatment. First, in contrast to the purely 

federal context, there is no statute or equitable doctrine authorizing a federal court to enforce 

state compulsory-counterclaim law or otherwise manage duplicative state-federal litigation. See

Miller, Federal Practice and Procedure § 1418; see also Handy v. Shaw, Bransford, Veilleux & 

Roth, 325 F.3d 346, 350–52 (D.C. Cir. 2003) (discussing state-federal distinction); Smart v. 

Sunshine Potato Flakes, LLC, 307 F.3d 684, 687 (8th Cir. 2002) (same). Unsurprisingly, then, 

we have “enforced” such law only by way of preclusion doctrine. See, e.g., Hutchison v. Parent, 

773 F. App’x 288 (6th Cir. 2019); Hapgood v. City of Warren, 127 F.3d 490 (6th Cir. 1997). 

But, for the reasons explained below, P&G cannot invoke preclusion here. So, in dismissing 

QAI’s claim strictly on the basis of Ohio Rule of Civil Procedure 13(A), the district court 

exercised power that it did not have.3

Second, as the Supreme Court has recognized, “state-federal concurrent jurisdiction” is 

different than “wholly federal concurrent jurisdiction” because federal courts have a “virtually 

unflagging obligation . . . to exercise the jurisdiction given them.” Colorado River Water 

Conservation Dist. v. United States, 424 U.S. 800, 817 (1976). Thus, in the state-federal 

concurrent jurisdiction context, “the pendency of an action in [a] state court” generally is 

considered “no bar to proceedings concerning the same matter in the Federal court having 

jurisdiction.” Id. at 817 (citation omitted); cf. RSM Richter, Inc. v. Behr Am., Inc., 729 F.3d 553, 

557–58 (6th Cir. 2013) (emphasizing that “the mere pendency of a state-court case concerning 

the same subject matter as a federal case is not reason enough to abstain”) (citing Exxon Mobil 

Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 292 (2005)). Indeed, as the Court put it nearly 

a century ago, in Penn General Casualty Co. v. Commonwealth of Pennsylvania ex rel. 

Schnader, “[w]here the judgment sought is strictly in personam, for the recovery of money or for 

an injunction compelling or restraining action by the defendant, both a state court and a federal 

court having concurrent jurisdiction may proceed with the litigation, at least until judgment is 

3To be sure, when confronted with certain strains of duplicative state-federal litigation, a district court does 

have the power to abstain from exercising jurisdiction, per Colorado River abstention doctrine. See, e.g., 

Healthcare Co. v. Upward Mobility, Inc., 784 F. App’x 390 (6th Cir. 2019) (affirming abstention in contract 

dispute); Preferred Care of Delaware, Inc. v. VanArsdale, 676 F. App’x 388 (6th Cir. 2017); see also Handy, 325 

F.3d at 350–53 (noting connection between compulsory-counterclaim argument and Colorado River abstention 

argument). But P&G did not raise that argument and so we need not address it here.

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obtained in one court which may be set up as res adjudicata in the other.” 294 U.S. 189, 195 

(1935). That this case implicates compulsory counterclaims does not, in our view, alter the basic 

federalist principle undergirding this precedent, namely, that litigants are free to split their claims 

between state and federal court and “race to the first judgment,” even if that stratagem is illadvised and inefficient. See Miller, Federal Practice and Procedure § 1418 (acknowledging this 

point); Ben Clements, Note, Pre-Judgment Enforcement of Federal Rule of Civil Procedure 

13(a), 74 Cornell L. Rev. 167, 196–97 (1988) (same).

With this conclusion in hand, we must then ask whether, in light of the state court’s April 

16, 2019 decision, QAI is precluded from continuing to litigate its § 1981 claim in federal court. 

It is not. “Under Ohio law, ‘[t]he doctrine of res judicata encompasses the two related concepts 

of claim preclusion, also known as res judicata or estoppel by judgment, and issue preclusion, 

also known as collateral estoppel.’” Anderson v. City of Blue Ash, 798 F.3d 338, 350 (6th Cir. 

2015) (quoting O’Nesti v. DeBartolo Realty Corp., 862 N.E.2d 803, 806 (Ohio 2007)). However 

classified, though, preclusion comes into play only when a state court has entered a final 

judgment. See Glidden Co. v. Lumbermens Mut. Cas. Co., 861 N.E.2d 109, 118 (Ohio 2006) 

(issue preclusion); Grava v. Parkman Twp., 653 N.E.2d 226, 229 (Ohio 1995) (claim 

preclusion); see also Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 80–81 (1984) 

(observing that the Constitution and federal law require federal courts to give preclusive effect 

only to “state-court judgment[s]”). And, here, the state trial court’s decision dismissing QAI’s 

§ 1981 claim on the merits was not a final judgment. Rather, it was an interlocutory decision—

that is, it did not dispose of the entire case, and can therefore be reconsidered at any point until 

final judgment. See Harkai v. Scherba Industries, Inc., 736 N.E.2d 101, 105 (Ohio Ct. App. 

2000) (“[A] ‘judgment’ must be distinguished from a ‘decision.’”). It is not entitled to 

preclusive effect. See Pieper v. Am. Arbitration Ass’n, Inc., 336 F.3d 458, 464 (6th Cir. 2003) 

(“Under Ohio law, interlocutory orders cannot form the basis for claims of res judicata or 

collateral estoppel.”).4

4Once the state trial court enters final judgment, though, that judgment may be preclusive, even if timely 

appealed to the state appellate court. See Libertarian Party of Ohio v. Husted, 831 F.3d 382, 406 (6th Cir. 2016)

(“[U]nder Ohio law, the pendency of an appeal . . . does not prohibit application of claim preclusion. The prior state 

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P&G resists this conclusion by contending first that permitting QAI’s federal suit to 

proceed would effectively allow QAI to appeal the state court’s April 16, 2019 order and thus 

run afoul of “the Rooker-Feldman doctrine,” which bars federal review of certain state-court 

decisions. Appellee’s Br. at 11 (citing Wilkerson v. Weber, No. 00-cv-74282, 2001 WL 739551, 

at *4 (E.D. Mich. 2001), citing, in turn, Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) and 

District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983)). But the RookerFeldman doctrine applies only to the “narrow ground” of “cases brought by state-court losers 

complaining of injuries caused by state-court judgments rendered before the district court 

proceedings commenced and inviting district court review and rejection of those judgments.” 

Exxon, 544 U.S. at 284 (emphasis added). It is not applicable here.5

P&G also argues that, at the least, we should exercise our independent judgment and find 

that QAI waived and released its § 1981 claim in the Termination Agreement, just as the state 

trial court did. See Appellee’s Br. at 25–34. The district court did not decide this entirely 

independent issue of waiver and release. We think the better course of action is to remand and 

let the district court consider the issue in the first instance. See United States v. United Tech. 

Corp., 782 F.3d 718, 736 (6th Cir. 2015).

III. CONCLUSION

For these reasons, we REVERSE the district court’s judgment and REMAND for further 

proceedings consistent with this opinion.

court judgment remains ‘final’ for preclusion purposes, unless or until overturned by the appellate court.”) (citation 

and alterations omitted).

5True, we have held that Rooker-Feldman applies to “interlocutory decisions,” not just final judgments. 

See, e.g., Pieper, 336 F.3d at 461–64. But that case law has since been displaced by Exxon, where “the Supreme 

Court ‘confined’ the application of the Rooker-Feldman doctrine to cases resembling Rooker and Feldman where 

the ‘state proceedings [have] ended.’” Nicholson v. Shafe, 558 F.3d 1266, 1277 (11th Cir. 2009) (quoting Exxon, 

544 U.S. at 284, 291). 

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_________________

DISSENT

_________________

GRIFFIN, Circuit Judge, dissenting. 

The sole issue raised in the district court and on appeal is whether Quality Associates, 

Inc.’s (QAI) claims in this litigation arise out of the same transaction or occurrence that is the 

subject matter of P&G’s state lawsuit to render them compulsory counterclaims under Ohio Rule 

of Civil Procedure 13(A). My colleagues and I agree that the district court correctly ruled QAI’s 

claims did arise out of the same transaction or occurrence and thus were compulsory 

counterclaims in the state court litigation. However, the majority reverses the district court’s 

judgment on an issue that neither party raised, preserved, or argued. For that reason, 

I respectfully dissent. 

“The premise of our adversarial system is that appellate courts do not sit as self-directed 

boards of legal inquiry and research.” Koprowski v. Baker, 822 F.3d 248, 258 (6th Cir. 2016) 

(quoting Carducci v. Regan, 714 F.2d 171, 177 (D.C. Cir. 1983) (Scalia, J.)). Instead, we are to 

act “as arbiters of legal questions presented and argued by the parties.” Carducci, 714 F.2d at 

177. Under this party-presentation principle, “we rely on the parties to frame the issues for 

decision and assign to courts the role of neutral arbiter of matters the parties present.” Greenlaw 

v. United States, 554 U.S. 237, 243 (2008). 

So, quite prudently, we have an oft-repeated rule: we only address issues that are 

properly before us and avoid adjudicating ones that were neither presented to the district court 

nor to us on appeal. See, e.g., Citizens Coal Council v. U.S. E.P.A., 447 F.3d 879, 905 (6th Cir. 

2006) (en banc); see also McKinney v. Hoffner, 830 F.3d 363, 374 (6th Cir. 2016); Ewolski v. 

City of Brunswick, 287 F.3d 492, 516–17 (6th Cir. 2002). This “eases appellate review by 

having the district court first consider the issue [and] . . . ensures fairness to litigants by 

preventing surprise issues from appearing on appeal.” Rice v. Jefferson Pilot Fin. Ins. Co., 578 

F.3d 450, 454 (6th Cir. 2009) (citation omitted). Following this usual course provides a check on 

our decisional process, see Elonis v. United States, 135 S. Ct. 2001, 2013 (2015), and promotes 

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judicial values, “preserv[ing] the respective functions of the trial and appellate courts,” Estate of 

Quirk v. C.I.R., 928 F.2d 751, 758 (6th Cir. 1991) (citation omitted); Cf. Adarand Constructors, 

Inc. v. Mineta, 534 U.S. 103, 110 (2001) (“[B]y adhering scrupulously to the customary 

limitations on our discretion regardless of the significance of the underlying issue, we promote 

respect for the Court’s adjudicatory process.” (citation and ellipsis omitted)). 

Application of this rule is even “more appropriate when [an] appellate court itself spots 

an issue the parties did not air below, and therefore would not have anticipated in developing 

their arguments on appeal.” Wood v. Milyard, 566 U.S. 463, 473 (2012). An appellate court’s 

decision on an unbriefed issue not only deprives the parties of “the opportunity to present 

whatever legal arguments [they] may have” on it, Singleton v. Wulff, 428 U.S. 106, 120 (1976), 

but also “effectively denie[s] appellate review of the newly addressed issue,” Estate of Quirk, 

928 F.2d at 758 (citation omitted). We have even reinforced this rule en banc, holding in 

Citizens Coal Council that the “panel majority erred in ruling on grounds not raised by the 

parties.” 447 F.3d at 905; see also id. (“We granted en banc review, however, precisely to vacate 

the panel majority’s sua sponte determination of . . . unbriefed issues.”); Cf. Bormuth v. Cty. of 

Jackson, 870 F.3d 494, 499–501 (6th Cir. 2017) (en banc). 

To be sure, we set aside this “rule of procedure” in “exceptional cases or particular 

circumstances” or to avoid “a plain miscarriage of justice.” Pinney Dock & Trans. Co. v. Penn 

Cent. Corp., 838 F.2d 1445, 1461 (6th Cir. 1988) (citation omitted). We do so, however, 

“rarely,” Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 552 (6th Cir. 2008), like when the 

exercise of our discretion “would promote the finality of litigation in [a particular] case,” In re 

Morris, 260 F.3d 654, 664 (6th Cir. 2001). Unlike my colleagues, I see no reason to apply this 

extraordinary exception here. 

Whether a federal court errs in applying a state’s counterclaim rule when the underlying 

state litigation is still pending does not “cr[y] out for resolution.” Rybarcuk v. TRW, Inc., 235 

F.3d 975, 984 (6th Cir. 2000). I am not aware of, and the majority opinion does not cite, any 

cases from our circuit—let alone the country—where this exact issue has ever arisen. Nor will 

application of our general rule cause injustice to QAI. Dir., Office of Workers’ Comp. Programs, 

U.S. Dep’t of Labor v. Quarto Min. Co., 901 F.2d 532, 536 (6th Cir. 1990). In my view, QAI 

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has forfeited its opportunity to have us consider this non-jurisdictional issue by failing to raise it 

in the district court and then here on appeal. The lack of prejudice is even more resounding 

given an Ohio state court has already ruled that Ohio’s counterclaim rule bars the very claims 

QAI pursues here, irrespective of finality. 

In concluding otherwise, the majority opinion makes much of the need to restrict a 

federal court’s “power” in this unique circumstance. I do not read this invocation of authority as 

holding the district court lacked Article III jurisdiction to consider the case (which, of course, we 

must consider “sua sponte if the parties do not raise the issue.” Chapman v. Tristar Prods., Inc., 

940 F.3d 299, 304 (6th Cir. 2019)). Terminology aside, I struggle with the fact that addressing 

the unbriefed issue resolves this appeal, but not this dispute. To the contrary, today’s decision 

reopens the underlying litigation, protracting a case once closed. That is the opposite of what 

“should” happen when we find exceptions to our general rule. In re Morris, 260 F.3d at 664. 

Because the majority opinion “misconceives our role” as judges, Lipker v. AK Steel 

Corp., 698 F.3d 923, 932 n.5 (6th Cir. 2012), I must respectfully dissent. I would affirm the 

judgment of the district court.

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