Are permissive counterclaims eligible for supplemental jurisdiction?

Permissive counterclaims are generally not eligible for supplemental jurisdiction because they do not arise out of the same transaction or occurrence as the initial claim. Under the rules governing supplemental jurisdiction, a court may assert jurisdiction over additional claims that share a common nucleus of operative fact with the original claim. However, permissive counterclaims are those that may not directly arise from the plaintiff's claim; they can involve different events or issues altogether.

For example, if a plaintiff sues a defendant for breach of contract related to a specific agreement, and the defendant raises a permissive counterclaim concerning a completely unrelated transaction, this counterclaim does not meet the requirement of sharing a common nucleus of fact with the original claim. Thus, it cannot utilize supplemental jurisdiction.

Other choices suggest conditions under which permissive counterclaims might be eligible for supplemental jurisdiction, but these do not align with the fundamental requirements outlined in the relevant jurisdictional statutes. The presence of related subject matter or multiple defendants does not inherently grant supplemental jurisdiction over a permissive counterclaim that lacks the necessary connection to the original claim, resulting in B being the correct interpretation based on the principles of supplemental jurisdiction.