Leonard (P) represented Mideast (D) in litigation against the Department of Interior. The Department prevailed. D failed to pay attorney fees to P. P sued to recover those fees. D made no appearance, and a default was entered in August 1985. In June 1986, D filed a malpractice claim against P in state court. D claimed that the Department offered to settle for $100,000, but on P’s advice, D declined that offer and lost. In response to the malpractice claim, P returned to federal court and sought declaratory relief such that the state malpractice claim was a compulsory counterclaim in P’s fee suit and it was now barred in state court.