Civil Procedure Multistate Bar Practice Exam

What characterizes a compulsory counterclaim?

1. It arises from a separate transaction or occurrence

2. It must be raised in the current proceeding

3. It is optional for the defendant to raise

4. It is only relevant if the plaintiff requests it

The correct answer is: It must be raised in the current proceeding

A compulsory counterclaim is defined by its requirement to be raised in the current proceeding. Specifically, under the Federal Rules of Civil Procedure, a defendant must assert a compulsory counterclaim if it arises from the same transaction or occurrence that is the subject of the opposing party's claim. If it is not raised in the current litigation, the defendant may lose the right to assert that claim in future proceedings. This rule encourages judicial efficiency by ensuring that all relevant claims arising from the same transaction can be resolved within the same lawsuit, thus avoiding multiple lawsuits and inconsistent judgments. By mandating that it be included in the response to the opposing party's claim, the legal framework aims to streamline the litigation process and encourage comprehensive resolution of disputes. In contrast, a claim related to a separate transaction would not meet the criteria for a compulsory counterclaim, making it important to differentiate between compulsory and permissive counterclaims. Also, the nature of a compulsory counterclaim is such that it is not optional for the defendant, which aligns with the rationale for requiring its inclusion in the current proceeding. Lastly, whether or not the plaintiff specifically requests a counterclaim does not influence the necessity for the defendant to raise it if it meets the criteria for being compulsory.