Manuel A. Iglesias (plaintiff) filed a diversity suit in federal district court against his former employer, Mutual Life Insurance Company of New York (Mutual Life) (defendant). Iglesias claimed that Mutual Life unlawfully discriminated against him and breached its contract with him. During discovery, Iglesias admitted that he defrauded Mutual Life by filing inflated expense vouchers. Mutual Life filed a counterclaim for restitution. Mutual Life based its counterclaim on state law, and therefore the court needed supplemental subject matter jurisdiction to hear the counterclaim. The diversity of citizenship between the parties might have provided the court with grounds for supplemental jurisdiction, but it was not clear from Mutual Life's counterclaim whether the amount in controversy met the $50,000 jurisdictional minimum for diversity cases. The court granted Mutual Life summary judgment on Iglesias's claims, and dismissed Mutual Life's counterclaim as untimely. Both Iglesias and Mutual Life appealed to the United States Court of Appeals for the First Circuit. The appellate court affirmed the district court's grant of summary judgment and then reviewed the dismissal of Mutual Life's counterclaim.