United States v. Heyward-Robinson
United States Court of Appeals for the Second Circuit
430 F.2d 1077 (2d Cir. 1970)
Heyward-Robinson Company (defendant) hired D'Agostino Excavators (plaintiff) as subcontractor on two separate but interrelated jobs: a federal Navy barracks project and a non-federal project for Stelma, Inc. Heyward could terminate both subcontracts if D'Agostino breached either one, and Heyward's progress payments were made as a single lump sum covering both jobs rather than allocated separately. D'Agostino sued in federal court for payments owed on the Navy job; Heyward counterclaimed for overpayments on both jobs, and D'Agostino counterclaimed in reply for payments owed on the Stelma job. The jury ruled for D'Agostino on both jobs, and Heyward appealed, arguing the district court lacked jurisdiction over the non-federal Stelma job counterclaims.
Whether a counterclaim concerning a separate, non-federal contract qualifies as a compulsory counterclaim -- and so falls within the same federal court's jurisdiction -- when the two contracts do not share identical facts but are otherwise closely interrelated.