Supplemental Jurisdiction over Permissive Counterclaims and Set Offs: A Misconception

In the years prior to 1990, courts extended federal jurisdiction over joined claims and parties in an orderly system. Pendent jurisdiction allowed a plaintiff to join a state law theory of recovery to a federal question theory in the complaint when both arose from a "common nucleus of operative fact."Ancillary jurisdiction allowed a defendant to join a state law claim to a federal claim in a civil action when both arose from the same "transaction or occurrence." Since a compulsory counterclaim arose from the same "transaction or occurrence" and a permissive counterclaim did not, courts had no difficulty in holding that compulsory counterclaims always qualified and permissive counterclaims never qualified for ancillary jurisdiction. The law was consistent, parallel, and nearly universally accepted.