Crossclaims Are Permissive

Crossclaims Are Permissive

Rule 13(g) says a pleading may state as a crossclaim any claim by one party against a coparty that meets the transactional or property connection, and that single verb separates the crossclaim from the counterclaim that matters most.¹ Rule 13(a) uses the opposite verb: a pleading must state as a counterclaim any claim against an opposing party that arises out of the transaction or occurrence that is the subject matter of the opposing party's claim.² Rule 13(b) then lets a pleading state as a counterclaim any claim that is not compulsory.³ Rule 13 thus holds one mandatory device, the compulsory counterclaim, and two optional ones, the permissive counterclaim and the crossclaim. A related claim against an opposing party is compulsory; a related claim against a coparty is optional.

Because a crossclaim is optional, a party who holds a related claim against a coparty may plead it in the pending action or hold it for later. Crossclaims are totally permissive: the claim may be asserted in the action at the party's option or brought in a subsequent independent action.⁴ Students stumble here because the relatedness test for a crossclaim looks like the test for a compulsory counterclaim. Courts read 'transaction or occurrence' in Rule 13(g) broadly, using the same logical-relation test that governs Rule 13(a), and they prefer to allow broad joinder at the pleading stage and to order separate trials later if sound judicial administration requires them. A claim that passes the test is nevertheless only eligible to join the case. Even though the test resembles the one for a compulsory counterclaim, the party always has discretion to assert the claim as a crossclaim or to reserve it for later independent litigation.⁵

One defendant holding a claim of each kind shows the contrast. Adams is sued by Grasso. Adams has an omitted counterclaim against Grasso and an indemnification claim against a codefendant, Johnson. Rule 13(g) authorizes Adams to join the indemnification claim against Johnson in the original action but does not require it.⁶ The omitted counterclaim against Grasso is treated differently. Traditional res judicata would not bar it, because Adams's claim against Grasso is not the same claim as Grasso's claim against Adams. Courts bar parties in Adams's position from suing separately on the omitted counterclaim anyway, simply to enforce the policy behind the compulsory counterclaim rule, and this 'rule-based res judicata' applies even though the same-claim requirement is not met.⁷ Both claims are related to the main case. The only fact that separates them is the status of the party at whom each is aimed: Grasso is an opposing party, and Johnson is a coparty.

The decisions barring omitted counterclaims are consistent. It is well settled that failing to plead a compulsory counterclaim bars a later independent action on that claim. In New York Life Insurance Co. v. Deshotel, the court of appeals held on that basis that Smith's later action against New York Life was barred, because it was a compulsory counterclaim she had failed to plead in the interpleader proceeding.⁸ In Taggart v. Rutledge, Rutledge had sued in state court to enforce the provisions of an October 1978 supply agreement. The Taggarts later filed claims challenging the validity and enforceability of those provisions. The court found the claims logically related to the state suit, because the transaction in both was the execution of the agreement, and held that the Taggarts should have raised them there as compulsory counterclaims.⁹

Courts do not extend that preclusion to omitted crossclaims, and the reason lies in the rulemakers' design. Rule-based preclusion exists to enforce the compulsory counterclaim rule, and where the rule says may it has nothing to enforce. Ordinary claim preclusion adds nothing either, because Adams's claim against Johnson is not the same claim as Grasso's claim against Adams, so Grasso's suit does not bar Adams from suing Johnson separately.¹⁰ If preclusion reached omitted crossclaims anyway, they would be compulsory in effect, and the rulemakers' choice to make them permissive would mean nothing. The same logic shields an omitted permissive counterclaim, which preclusion would likewise turn into a compulsory one while raising serious jurisdictional problems in many federal cases.¹¹

The line falls where it does for a reason. Making counterclaims compulsory costs the claimant something: the longstanding common law principle that a claimant is master of its own claim, free to choose where and when to sue. The federal rulemakers evidently judged that cost smaller than the advantage of litigating the same facts and issues between the same parties in one action, though some states weigh the policies differently and make no counterclaim compulsory.¹² Coparties are parties who do not yet oppose each other on a pleaded claim, so the counterclaim provision is not available to them.¹³ For claims between coparties, Rule 13(g) leaves the claimant's choice intact.

The same collision can produce both outcomes, depending on who sued whom. Deborah's claim against Dell for damage to her car arises out of the same occurrence as Pete's original action, so it is a crossclaim, and she may sue Dell separately in Wisconsin state court after Pete's case is completed.¹⁴ Compare two drivers, P and D, who collide. P sues D in diversity for personal injury, and D makes no counterclaim. D's later federal or state suit against P for property damage from the same accident fails, because the claim arose from the same occurrence as P's claim and was not asserted as a compulsory counterclaim.¹⁵ The accident and the loss are the same in both scenes. What differs is whether the person at whom the claim is aimed had already sued the pleader.

Permissive status governs whether to plead a proper crossclaim, and it does not enlarge what is proper. The claim must run against a coparty and must be transactionally related to the original claim or a counterclaim, or related to property that is the subject matter of the original action.¹⁶ Coplaintiffs technically fall within the language of modern crossclaim rules, but case law generally prohibits crossclaims between them unless a defendant has interposed a counterclaim against them.¹⁷

Permissive status also describes the decision to file, and it does not carry over to the response. A coparty is a party who is not yet an opposing party, and opposing parties are those who oppose each other on a pleaded claim and can therefore resort to the counterclaim provision.¹⁸ A pleaded crossclaim supplies that opposition between the crossclaimant and the crossclaim defendant, so the compulsory and permissive counterclaim provisions govern the crossclaim defendant's answer.

When a problem reports that a party left a related claim out of an earlier suit and now sues on it, ask first whom the claim was aimed at in that suit. A related claim against an opposing party falls under Rule 13(a) and is lost. A related claim against a coparty is a crossclaim and survives, unless the coparty had pleaded a claim against the claimant and so turned the two into opposing parties.