United States District Court, E.D. Pennsylvania
judges and juries should not be separately addressing the
claims between the same parties to one dispute. To achieve
goals of judicial economy and finality of federal court
judgments, Federal Rule of Civil Procedure 13 requires
defendants who want to sue the plaintiff for conduct arising
out of the same conduct is compelled to bring her claim in
the suit in which she is a defendant. We today evaluate
allegations against a defendant which are compulsory
counterclaims in an earlier filed lawsuit filed by our
defendant against our plaintiff now pending before Judge
Joyner. The issue is whether we should dismiss these claims.
We decline to dismiss. In the accompanying Order, we deny the
defendant's motion for judgment on the pleadings and
extend the discovery and trial deadlines to allow the parties
to meaningfully address the proper parties to this suit.
Christine Peterson's allegations in this case.
Peterson began working for the Borough of Upland Police
Department as a part-time employee in 2009. In 2011, the
Department promoted Ms. Peterson to a full-time
administrative assistant. Ms. Peterson also served as a Borough
of Upland council member. While working for the Department and
serving as a member of the Borough Council, Ms. Peterson
became concerned about the interactions between Edward
Mitchell, President of the Borough Council, and Nelson
Ocasio, the Department's Police Chief. Ms. Peterson
believed Mr. Mitchell and Chief Ocasio schemed to steal
Borough funds and property. For example, Ms. Peterson
believed Mr. Mitchell and Chief Ocasio stole $30, 000 worth
of camera equipment purchased by the Borough.
Peterson told Mr. Mitchell and Chief Ocasio about her
concerns. In response, Mr. Mitchell and Chief Ocasio
threatened to fire Ms. Peterson and harassed and intimidated
her to keep her quiet. On one occasion, Mr. Mitchell reminded Ms.
Peterson her mother lived in a housing project funded by the
Borough and "it would be a shame if she didn't get
to live there anymore." On another occasion, Chief Ocasio
brought Ms. Peterson's son, who suffered from mental
health issues, to a gun shop and instructed him to purchase a
Chief Ocasio instructed Ms. Peterson's son to falsify the
required paperwork by not disclosing he suffered from mental
health issues. Shortly after, an unidentified person
arrested Ms. Peterson's son for falsifying information on
a government document.
August 2015, Detective Michael Irey of the Department took a
family vacation. Before leaving for vacation, Chief
Ocasio and Detective Irey agreed by email Detective Irey
could work on the weekends as "comp time" to make
up for his time away on vacation.Detective Irey forwarded
Ms. Peterson the email chain between him and Chief Ocasio and
asked Ms. Peterson to have Chief Ocasio sign off on his
timecards while on vacation. Ms. Peterson
January 2016, Ms. Peterson became the President of the
Borough Council. Unhappy his tenure as President ended,
Mr. Mitchell "made it clear" to Ms. Peterson he
would do whatever it took to regain the
position. As President of the Borough Council, Ms.
Peterson enjoyed greater access to information regarding
Borough operations. Ms. Peterson soon discovered what she
believed to be a "pattern of corruption" where Mr.
Mitchell acted as the "de facto mayor and police chief
of the Borough by systematically threatening, blackmailing,
and bribing others and using Chief Ocasio as a
"henchman." Ms. Peterson believed Mr. Mitchell
used a check cashing business to steal Borough
funds. Ms. Peterson also believed Mr. Mitchell
stole Borough property and reported the property stolen in
order to request funds from the Borough to purchase
replacement property. Rather than purchase replacement
property, Mr. Mitchell stole the funds. Mr. Mitchell
instructed Chief Ocasio to help him hide evidence of the
stolen property and funds.
February 2016, believing she could not stop Mr. Mitchell and
Chief Ocasio on her own, Ms. Peterson told Borough Mayor
Michael Ciach about Mr. Mitchell's and Chief Ocasio's
conduct. In response, Mayor Ciach demoted Chief
Ocasio. After learning of Chief Ocasio's
demotion, Mr. Mitchell and Chief Ocasio told Ms. Peterson she
would regret "opening up her fat
mouth." The same month, Ms. Peterson acquired
evidence demonstrating an "ongoing fraud" and
"kick-back scheme" involving Mr. Mitchell and
employees of multiple technology companies, costing the
Borough over $100, 000.Mr. Mitchell purchased
recording devices from the technology companies and installed
the devices throughout the Borough municipal building to
record Ms. Peterson's and other's
conversations. Ms. Peterson shared her evidence with
the same month, Ms. Peterson arrived to her office and
discovered a note on her desk from Chief Ocasio which stated
"sorry" and included a drawing of handcuffs
followed by "=u." The same day, Chief Ocasio
arrived at Ms. Peterson's office with a state police
officer and explained to Ms. Peterson he had a warrant for
her arrest. Confused and scared, Ms. Peterson
suffered from a panic attack. Ms. Peterson asked Chief
Ocasio what charges she faced, but Chief Ocasio refused to
answer. According to the criminal complaint
drafted by Chief Ocasio, Ms. Peterson's arrest arose out
of the alleged timecard forgery from August
the symptoms of her panic attack worsening, Ms. Peterson
instructed her co-worker to call Mayor Ciach, but Chief
Ocasio instructed the co-worker not to make the call or face
charges of obstruction of justice. Chief Ocasio placed Ms.
Peterson under arrest, handcuffed her, and escorted her to
his police vehicle. While in the police vehicle, Ms.
Peterson explained to Chief Ocasio she was suffering from a
panic attack, felt light headed, and was worried about her
health. Chief Ocasio ignored her
Peterson asked "Patrolman Dougherty" to lower the
window of the police vehicle because she had a difficult time
breathing. Knowing Ms. Peterson suffered from panic
attacks in the past, Patrolman Dougherty lowered the
window. Chief Ocasio became "enraged"
when he saw the open window and ordered Patrolman Dougherty
to close the window, despite Ms. Peterson begging to leave
the window open
Ocasio transported Ms. Peterson to the Pennsylvania State
Police Barracks in Lima, Pennsylvania. An
unidentified person shackled Ms. Peterson to a bench and Ms.
Peterson underwent a "video
arraignment, an unidentified person transported Ms. Peterson
to Concord District Court for a bail hearing before District
Justice Wendy Roberts. At the bail hearing, Chief Ocasio
requested Ms. Peterson not be allowed to contact Detective
Irey as a condition of bail. Based on this representation,
Ms. Peterson believed Chief Ocasio and Mr. Mitchell
coordinated her arrest in retaliation to her
investigations. After her release from custody the same
day, detectives from the Delaware County Criminal
Investigation Division questioned Ms. Peterson. Shortly
after, the district attorney dropped all charges against Ms.
March 2016, Mayor Ciach informed police detectives of the
possibility of "covert" cameras in the Borough
municipal building. Police detectives conducted an
investigation and discovered three cameras and three
microphones, all of which Mr. Mitchell purchased through
"sham approvals." The detectives found cameras
and microphones in the Borough secretary's office, the
Borough Council's chambers, and two employee work
stations. Detectives discovered the devices
recorded audio and video from late January through early
March 2016. Ms. Peterson believes Mr. Mitchell had
the devices installed to "garner information" on
his "political enemies, " to gain leverage to
continue his "pattern of corruption [and] racketeering,
and to maintain control over his own personal
December 2016, an unidentified agency arrested Mr. Mitchell
under suspicion of wiretapping and participating in a
kick-back scheme using Borough funds.
November 2017, Ms. Peterson filed this case suing Chief
Ocasio, Mr. Mitchell, and the Borough ("Peterson
Action"). She asserts a host of constitutional and state
law claims against Chief Ocasio. Ms. Peterson sues under 42
U.S.C. § 1983. Ms. Peterson claims Chief Ocasio
subjected her to a pattern of abuse, filed false affidavit of
probable cause against her, and used excessive force while
arresting her. Ms. Peterson claims this conduct violated her
Fourth, Eighth, and Fourteenth Amendment rights and
Pennsylvania law. Ms. Peterson also claims Chief Ocasio's
filed affidavit of probable cause in retaliation to her
protected speech of reporting possible criminal conduct to
Mayor Ciach in violation of her First Amendment rights. Ms.
Peterson also sues Chief Ocasio under Pennsylvania state law
for assault and battery, false arrest, false imprisonment,
intentional infliction of emotional distress, and negligent
infliction of emotional distress claims.
Allegations in Chief Ocasio's February 16, 2017 Complaint
against Ms. Peterson.
months before Ms. Peterson filed this case, Chief Ocasio sued
Ms. Peterson, Mayor Ciach, and the Borough. Chief Ocasio
alleges he discovered Detective Trey submitted timecards for
August 2015 which did not reflect vacation time Detective
Trey took to travel to Duck Beach, North
Carolina. Chief Ocasio also noticed someone forged
his signature on the inaccurate timecards. Chief Ocasio
believed Ms. Peterson to be the only other person with
access, other than himself, to the Department's timecards
to forge his signature.
same month, believing Ms. Peterson forged his signature on
the inaccurate timecards, Chief Ocasio filed an affidavit of
probable cause charging Ms. Peterson with forgery, theft by
unlawful taking, and tampering with government
records. The same day, Mayor Ciach and Ms.
Peterson suspended Chief Ocasio without pay. The next day,
Chief Ocasio met with Mayor Ciach and Ms.
Peterson. At the meeting, Mayor Ciach terminated
Chief Ocasio as the Borough's police chief.
Ocasio sued Ms. Peterson, Mayor Ciach, and the Borough in
this court in February 2017 ("Ocasio Action"), with
Judge Joyner presiding. Chief Ocasio claimed Ms. Peterson
violated his right to procedural due process by terminating
him without "just cause" required by the collective
bargaining agreement governing his employment. Chief Ocasio
claimed Ms. Peterson also violated his First Amendment rights
and "Whistleblower law" by retaliating against him
for filing a good faith affidavit of probable
cause. Finally, Chief Ocasio claimed Ms.
Peterson conspired with Mayor Ciach to violate his
constitutional and statutory rights. Chief Ocasio seeks
compensatory damages, punitive damages, and injunctive relief
in the form of removing the notice of termination and any
reference to being removed as police chief from his personnel
file and reinstatement as the Borough's police
chief The Ocasio Action continues before Judge
Peterson sues Chief Ocasio under the First, Fourth, Eighth,
and Fourteenth Amendments and under Pennsylvania state law
for false arrest, false imprisonment, intentional infliction
of emotional distress, and negligent infliction of emotional
Ocasio moves for judgment on the pleadings arguing the claims
against him raised here should have been raised in Ms.
Peterson's responsive pleading to the Ocasio Action as
compulsory counterclaims. Chief Ocasio argues Ms.
Peterson's failure to raise the claims in her responsive
pleading in the Ocasio Action requires we dismiss with
prejudice the claims under Federal Rule of Civil Procedure
13. Chief Ocasio is partially correct; these are compulsory
counterclaim and we are not required to dismiss the claims.
Ms. Peterson's claims against Chief Ocasio should have
been raised as compulsory counterclaims in the Ocasio
Rule of Civil Procedure 13(a) provides "[a] pleading
must state as a counterclaim any claim that - at the time of
its service - the pleader has against the opposing party if
the claim: (A) arises out of the transaction or occurrence
that is the subject matter of the opposing party's claim;
and (B) does not require adding another party over whom the
court cannot acquire jurisdiction."
Rule 13, we determine "whether the counterclaim
'bears a logical relationship to an opposing party's
claim.'" "[T]o qualify as a compulsory
counterclaim, there need not be precise identity of issues
and facts between the claim and the counterclaim . .,
" A logical relationship exists
"where separate trials on each of the respective
claims would involve a substantial duplication of effort and
time by the parties and the courts." "Such a
duplication is likely to occur when claims involve the same
factual issues, the same factual and legal issues, or are
offshoots of the same basic controversy between the
parties." "The compulsory counterclaim
inquiry thus requires essentially the same comparison between
claims as the res judicata analysis." Because
judicial economy is the policy founding Fed.R.Civ.P. 13(a),
the term "transaction or occurrence" is construed
generously. "The failure to plead a compulsory
counterclaim bars a later independent action on that
Peterson claims in this case Chief Ocasio retaliated against
her when she told Mayor Ciach she believed Chief Ocasio
helped Mr. Mitchell steal Borough property and funds. Ms.
Peterson alleges Chief Ocasio retaliated by filing a criminal
complaint against her alleging she forged his signature on
Detective Irey's timecard and falsified a government
document, and arresting her. Ms. Peterson's alleges Chief
Ocasio used excessive force in making the arrest.
first filed Ocasio Action, Chief Ocasio alleges only he and
Ms. Peterson had access to Detective Irey's timecards and
he did not sign the timecards at issue. As a result, Chief
Ocasio concluded Ms. Peterson forged his signature. Chief
Ocasio filed an affidavit of probable cause alleging Ms.
Peterson committed forgery, theft by unlawful taking and
tampered with government records. Chief Ocasio alleges Ms.
Peterson immediately retaliated against him filing the
affidavit of probable cause in good faith by terminating him
as police chief.
Peterson's and Chief Ocasio's claims arise out of the
alleged forgery of Detective Irey's timecards and Chief
Ocasio charging Ms. Peterson with forgery and falsifying a
government document. Ms. Peterson's and Chief
Ocasio's claims largely stem from the other's conduct
in direct response to Chief Ocasio criminally charging and
arresting Ms. Peterson. Both allege the other unlawfully
retaliated because each engaged in protected speech under the
Ocasio's claims are based on his termination as police
chief, and Ms. Peterson's claims are based on her arrest
and Chief Ocasio's conduct in making the arrest. We
appreciate Ms. Peterson's and Chief Ocasio's claims
require different proofs, but we construe the
"transaction and occurrence" language in
Fed.R.Civ.P. 13 liberally. The claims largely arise out of
the same events and are at least "offshoots of the same
controversy" between Ms. Peterson and Chief Ocasio.
Separate trials would require separate courts and juries to
assess the intent and merit of Ms. Peterson's and Chief
Ocasio's conduct. For example, the merit of Ms.
Peterson's and Chief Ocasio's claims are based in
part on the veracity and the evidentiary support of Chief
Ocasio's affidavit of probable cause against Ms.
Peterson. Most of the parties' claims arise from the same
transaction or occurrence - Chief Ocasio filing the affidavit
of probable cause. Ms. Peterson's claims in part rely on
Chief Ocasio's conduct before filing the affidavit of
probable cause, but Rule 13 does not require a precise
identity of facts to find Ms. Peterson's claims are
Peterson's claims against Chief Ocasio arise out of the
same transaction or occurrence founding Chief Ocasio's
claims in the Ocasio Action. They are compulsory
counterclaims in the first filed Ocasio Action. Ms.
Peterson's claims bear a "logical relationship"
to Chief Ocasio's claims and are "offshoots of the
same basic controversy." Both Ms. Peterson's and
Chief Ocasio's claims are based on the same facts and
separate trials would create a duplication of effort and time
by the parties.
We will extend deadlines for the discovery and trial in this
case for a short period of time while the Ocasio Action is
Ms. Peterson's claims against Chief Ocasio are compulsory
counterclaims in the Ocasio Action, "[n]othing in Rule
13 prevents the filing of a duplicative action instead of a
compulsory counterclaim." Commentators suggest we should
stay our proceeding once we learn our claims are compulsory
courts have dismissed when the compulsory counterclaim can be
brought in or transferred to the first filed case, dismissal
is a particularly harsh remedy here. The Ocasio Action is
presently finished discovery and Judge Joyner is reviewing
summary judgment motions. After an extension, Judge Joyner
has precluded further extensions and the matter is now in the
trial pool should claims survive summary
judgment. Ms. Peterson may move to amend her
answer in the Ocasio Action particularly given her
allegations arise from the same facts. But given her
unexplained delay in so moving, particularly after filing
this case in November 2017 when she could have easily brought
her claims in the Ocasio Action, her motion to amend may be
denied as untimely. We find no legitimate basis for her delay
in bringing the compulsory counterclaims in the Ocasio Action
but we decline to toss her potential claims out of court.
Judge Joyner's considered analysis of the similar issues
will also assist in this case. Dismissal here would visit
legal prejudice upon Ms. Peterson, and we should avoid this
result.Conversely, we can find no prejudice in
extending discovery for the Defendants.
also persuaded a stay is warranted here given co-defendant
Mitchell is presently the subject of a criminal case
involving some of the facts at issue. He is scheduled for
trial shortly. While we could proceed piecemeal while Mr.
Mitchell may invoke his Fifth Amendment rights, given Ms.
Peterson's decision to delay in bringing her claims, we