United States ex rel. D’Agostino Excavators, Inc. v. Heyward-Robinson Co.

This case concerns whether an allegedly related set of events constitutes a single "transaction or occurrence" for purposes of Fed. R. Civ. P. 13.

This case was decided before the enactment of Section 1367 (which, if you recall, codified the doctrine of what we now call supplemental jurisdiction).  Under Fifth Circuit precedent at this time, a compulsory counterclaim did not have to have an independent basis of subject matter jurisdiction, but a permissive counterclaim did have to have such an independent basis.  Thus, the question of whether the disputes over the two construction sites at issue in this case constituted a single transaction or occurrence determined whether there was subject matter jurisdiction over the defendant's counterclaim.

As an aside:  the counterclaim is a relatively new instrument, as it did not exist at common law, though it has predecessors in equity. These remedies, called set-off and recoupment, were limited, though, as a defendant could not assert a claim to affirmative relief. This limitation was rescinded in England under the Judicature Act of 1873, and American states gradually began to follow suit.