Defining the Limits of Supplemental Jurisdiction Under 28 U.S.C. § 1367: A Hearty Welcome to Permissive Counterclaims

In 1990, Congress passed 28 U.S.C. § 1367, which combined the judge-made doctrines of ancillary and pendent jurisdiction into a new category, “supplemental jurisdiction.” Supplemental jurisdiction allows federal district courts with original jurisdiction to also have jurisdiction over all other claims that form part of the “same case or controversy under Article III of the United States Constitution.” This Article analyzes supplemental jurisdiction over both permissive and compulsory counterclaims, before and after the codification of § 1367, by looking at the meaning of “same case or controversy.” It then examines two Circuit Court opinions that have held permissive counterclaims may be subject to supplemental jurisdiction as part of the “same case or controversy” as the claim over which the court has original jurisdiction. The author concludes that recent opinions from the Second and Seventh Circuit Courts of Appeal have correctly recognized federal courts\u27 ability to hear permissive counterclaims without independent jurisdiction