Opinion ID: 564316
Heading Depth: 2
Heading Rank: 2

Heading: Third-Party Counterclaims.

Text: 27 Shari contends that whether or not LISB's third-party claim for indemnity was properly regarded as moot after the determination adverse to Jonathan's claim against LISB, the district court improperly declined to address her counterclaim. We conclude, however, that the district court acted well within its discretion in dismissing Shari's counterclaims. 28 As we stated in Harris v. Steinem, 571 F.2d 119 (2d Cir.1978): 29 With certain exceptions, [Fed.R.Civ.P.] 13(a) requires a litigant to state as a counterclaim any claim ... if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim.... Such counterclaims are denominated compulsory, and no independent basis of federal jurisdiction is needed for the court to adjudicate the ancillary issues thus raised, if the main claim itself presents a colorable federal issue. Moreover, a compulsory counterclaim, unless specifically excepted, must be pleaded or be forever barred. 30 Id. at 121-22 (footnotes and citations omitted). 31 It would seem likely that Shari's counterclaims in this case are properly considered compulsory. See 6 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure Sec. 1410, at 78 (2d ed. 1990) (whenever any logical relationship between the claims can be found, the courts seem willing to apply Rule 13(a)). Nonetheless, compulsory counterclaims may be dismissed where, as here, the initial claim giving rise to federal jurisdiction is dismissed. 32 Harris v. Steinem did not reach this question, concluding that the counterclaims in that case were permissive and there was accordingly no basis for federal jurisdiction after the primary claim was dismissed. See 571 F.2d at 123-25. Numerous cases have addressed the issue, however, and ruled that compulsory counterclaims are subject to dismissal. See, e.g., National Research Bureau, Inc. v. Bartholomew, 482 F.2d 386, 388 (3d Cir.1973) (per curiam) (dictum); Faygo Beverages, Inc. v. Pioneer Trucking, Inc., 585 F.Supp. 251, 255-56 (D.Del.1984); Mirkin, Barre, Saltzstein, Gordon, Hermann & Kreisberg, P.C. v. Noto, 94 F.R.D. 184, 188-90 (E.D.N.Y.1982); Stewart v. Dollar Federal Savings and Loan Ass'n, 523 F.Supp. 218, 224-25 (S.D.Ohio 1981) (dictum); Great Horizons Dev. Corp. v. Massachusetts Mut. Life Ins. Co., 457 F.Supp. 1066, 1081-82 (N.D.Ind.1978), aff'd mem., 601 F.2d 596 (7th Cir.1979); Wetherington v. Phillips, 380 F.Supp. 426, 429 (E.D.N.C.1974) (dictum), aff'd mem., 526 F.2d 591 (4th Cir.1975); United States ex rel. T. Square Equipment Corp. v. Gregor J. Schaefer Sons, Inc., 272 F.Supp. 962, 964-65 (E.D.N.Y.1967). 33 Given the insubstantiality of the counterclaims asserted by Shari, the district court did not abuse its discretion by dismissing them. 5 We note, further, that Shari may probably pursue these claims in state court, if so disposed. See Dyer v. Cahan, 150 A.D.2d 172, 540 N.Y.S.2d 785 (1st Dep't 1989) (per curiam); Gross v. Newberger, Loeb & Co., 85 A.D.2d 709, 445 N.Y.S.2d 830 (2d Dep't 1981) (per curiam); see also Harris v. Steinem, 571 F.2d at 125 & n. 19.