Ease Into Prep with a BAR^® Question of the Day

The correct answer is: (D) No, because supplemental jurisdiction existed over the third-party claim.

Part of this case, the plaintiff's original claim against the defendant, belonged in federal court based upon federal-question jurisdiction. The defendant's compulsory counterclaim by definition arose from the same events as the plaintiff's original claim and thus would be part of the same "case or controversy" and would be within the court's supplemental jurisdiction. The plaintiff's claim for indemnity on the compulsory counterclaim again by definition is part of the same case or controversy as the counterclaim and the original claim. Because the claim for indemnity is part of the same case or controversy as the original federal question claim, the third-party claim is within the jurisdictional grant of 28 U.S.C. Section 1367(a). Because there is a federal question in the case, 28 U.S.C. Section 1367(b) does not apply and does not "take back" the supplemental jurisdictional grant.

(A) Incorrect. Yes, because the third-party claim was not sufficiently related to the other claims to be within the court's supplemental jurisdiction.

All the claims were part of the same "case or controversy." The defendant's counterclaim was compulsory, and so by definition it arose from the same events as the original federal-question claim. The plaintiff sought indemnity from that counterclaim, and a claim for indemnity cannot be unrelated to the underlying claim against the party who seeks the indemnity. The claim for indemnity was thus also part of that same case or controversy.

(B) Incorrect. Yes, because supplemental jurisdiction did not extend to a third-party claim made by the plaintiff.

There are times when supplemental jurisdiction will not extend to certain claims made by plaintiffs, under 28 U.S.C. Section 1367(b). Those limitations come into play, however, only when a case is founded solely on diversity. They do not apply here, where the plaintiff has asserted a federal question.

(C) Incorrect. No, because diversity jurisdiction existed between the plaintiff and the third-party defendant.

Diversity jurisdiction did not exist because there was no complete diversity between the plaintiff and the third-party defendant. Under 28 U.S.C. Section 1332(c)(1), the third-party defendant is deemed to be a citizen of States A and B and thus was not diverse from the plaintiff. The claim should have remained in the case, but under supplemental jurisdiction rather than diversity jurisdiction.