## Facts

- Amanda J. Hart obtained a J.C. Penney credit card and later became unable to pay a balance of $1,135.25.
- J.C. Penney assigned Hart’s delinquent account to Clayton-Parker & Associates, Inc. for collection.
- Hart sued Clayton-Parker in federal court alleging deceptive, unfair, and abusive collection practices under the Fair Debt Collection Practices Act (FDCPA) and Arizona law.
- Clayton-Parker filed a counterclaim under state law seeking the amount of the alleged debt ($1,135.25), plus interest, costs, and attorney’s fees, based on Hart’s asserted default under her credit agreement.
- The case’s original federal jurisdiction rested on the FDCPA federal-question claim; the parties were not diverse.
- Hart moved to dismiss the counterclaim for lack of subject-matter jurisdiction, arguing it was not compulsory under Federal Rule of Civil Procedure 13(a) and lacked an independent jurisdictional basis.

## Issues

1. Whether a debt collector’s state-law counterclaim to recover the underlying credit-card debt “arises out of the transaction or occurrence” of a consumer’s FDCPA and state abusive-collection claims, making it a compulsory counterclaim under Rule 13(a).
2. If the counterclaim is not compulsory, whether the federal court lacks subject-matter jurisdiction absent an independent basis (federal question or diversity).

## Decision

- The court granted Hart’s motion and dismissed Clayton-Parker’s counterclaim for lack of subject-matter jurisdiction.
- The court held the counterclaim was not compulsory under Rule 13(a) because it did not arise out of the same transaction or occurrence as Hart’s FDCPA and Arizona collection-practices claims.
- Applying the “logical relationship” test, the court concluded the claims involved different operative facts and different evidence: statutory misconduct in collection efforts versus contractual liability for the debt.
- Because the counterclaim was permissive and lacked an independent jurisdictional basis, it could not remain in federal court.

## Legal Principles

- A federal court may hear a state-law counterclaim without an independent jurisdictional basis only when it is compulsory under Federal Rule of Civil Procedure 13(a).
- Under Rule 13(a), a counterclaim is compulsory only if it arises out of the same “transaction or occurrence” as the opposing party’s claim; courts commonly apply a “logical relationship” test focused on shared operative facts and evidentiary overlap.
- FDCPA and similar abusive-collection claims generally concern the legality of collection conduct; a counterclaim for the underlying debt generally concerns contractual performance, default, and the amount owed.
- When the claim and counterclaim rely on different bodies of law, different operative facts, and different proof, the counterclaim is permissive and requires its own basis for federal jurisdiction.
- Treating underlying-debt counterclaims as permissive in FDCPA actions avoids deterring consumers from bringing federal statutory claims by forcing them to litigate the debt in the same federal case.

## Conclusion

The court held that a debt collector’s counterclaim to recover the underlying debt was not sufficiently connected to a consumer’s FDCPA and state abusive-collection claims to qualify as a compulsory counterclaim, so the counterclaim—lacking an independent ground for federal jurisdiction—was dismissed.


Hart v. Clayton-Parker & Assocs., Inc., 869 F. Supp. 774 (D. Ariz. 1994)