This section contains the nature of the case and procedural background.

Plant (P) executed a note in favor of Blazer (D) for $2,520 to be paid in monthly installments. No payments were made. P brought suit in federal court alleging violations of the Truth-in-Lending Act by D; a limitation on the after-acquired security interest. D counterclaimed on the note for the unpaid balance. P challenged the counterclaim because no diversity or federal question existed. The district court ruled the counterclaim was compulsory, and P appealed. For D’s failure to disclose a limitation on an after-acquired security interest, the court awarded P $944.76 and attorney fees.

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