Connecticut Nat'l Bank v. Germain, 503 U.S. 249, 253-254, 117 L. Ed. 2d 391, 112 S. Ct. 1146 (1992) (parallel citations omitted).
Language analogous to that employed in § 78u-4(b)(3)(B) is contained in 28 U.S.C. § 1331, which grants district courts jurisdiction in "all civil actions arising under the Constitution, laws, or treaties of the United States." Id. (emphasis added). An action brought in state court may not be removed to federal court based on a defense or counterclaim asserted under federal law. General Electric Capital Auto Lease, Inc. v. Mires, 788 F. Supp. 948, 949-950 (E.D. Mich. 1992) (citing Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 10, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983); Shamrock Oil and Gas Corp. v. Sheets, 313 U.S. 100, 85 L. Ed. 1214, 61 S. Ct. 868 (1941)). However, the inability to remove an action based on a counterclaim is due to the language of the statutory scheme for removal, not § 1331. Mires at 950 (quoting Franchise Tax Bd. at 10). However, even when a complaint is dismissed for lack of jurisdiction, the court may adjudicate counterclaims which present an independent basis for jurisdiction. North Central F.S., Inc. v. Brown, 951 F. Supp. 1383, 1400 (N.D. Iowa 1996) (quoting Westmoreland Capital Corp. v. Findlay, 100 F.3d 263, 269 (2d Cir. 1996)). Obviously, such a case must be said to "arise under" federal law despite the fact that the original pleading does not set forth the federal question and implicate the jurisdiction of a federal court.
From the foregoing, we conclude that a case "arises under" federal law when a pleading, whether or not the original pleading, sets forth a claim involving a substantial question of federal law.
At the same time, however, we note that, if the court did not have jurisdiction of the original claim and a permissive counterclaim were asserted, we would be required to dismiss the original claim (and the entire action). Thus, we would acquire jurisdiction over the entirety of the action only if the counterclaim were a compulsory counterclaim. This means that it must, in the language of Rule 13(a), arise from the transaction or occurrence set forth in the complaint or, in the language of the Constitution, be part of the same "case or controversy." U.S. Const. art. III, § 2. See generally Presbytery of New Jersey of the Orthodox Presbyterian Church v. Florio, 40 F.3d 1454, 1462 (3d Cir. 1994), cert. denied, 137 L. Ed. 2d 494, 117 S. Ct. 1334 (1997). See also Shamblin v. City of Colchester, 793 F. Supp. 831, 833 (C.D. Ill. 1992) (federal court has supplemental jurisdiction of compulsory counterclaims); 28 U.S.C. § 1367(a) (supplemental jurisdiction applies to claims that form part of same case or controversy under Article III).
In short, we conclude that a compulsory counterclaim under Chapter 2B is part of the same case or controversy and therefore the same action asserted in the complaint. It follows that the action "arises under" federal law for purposes of jurisdiction. Based on the identity of language, the stay provision of § 78u-4(b)(3)(B) applies. In this instance, the motion to dismiss the counterclaim requires that all proceedings be stayed pending resolution of the motion to dismiss.
In addition, the court does not believe that Berckeley has presented any substantial argument in support of the exception to the stay requirement; that is, that "particularized discovery is necessary to preserve evidence or to prevent undue prejudice to that party [Berckeley]."
NOW, THEREFORE, IT IS ORDERED THAT:
1. All discovery and all other proceedings in this case are stayed pending disposition of the plaintiff's motion to dismiss the counterclaim of defendant Douglas Colkitt, filed November 25, 1997 (record document no. 34).
2. The continued initial case management conference will be rescheduled upon the lifting of the stay.
3. The parties are directed to follow the briefing schedule with respect to the motion to dismiss the counterclaim as set forth in paragraph 4 of the court's order of December 4, 1997.
4. No document other than the briefs related to the motion to dismiss the counterclaim shall be filed until the stay is lifted. An order for any further briefing on other motions already of record shall issue upon the lifting of the stay.
5. The clerk is directed to fax a copy of this order to counsel immediately.
James F. McClure, Jr.
United States District Judge