Fraiser, a radio talk-show host, and Roz, his producer are citizens of the State of Washington. While Fraiser's program was on the air, Fraiser called Roz a defamatory name. One year later, Roz fired Fraiser for failure to attract enough listeners. In Washington federal district court, Fraiser filed a complaint asserting a claim under the Age Discrimination in Employment Act (ADEA), a federal statute that prohibits discrimination in employment on account of age. Roz filed an answer denying Fraiser's claim and asserting a counterclaim against Fraiser for defamation under Washington law.

Following trial on the merits, but before the case was sent to the jury for deliberations, the district court granted a directed verdict in favor of Roz and dismissed Fraiser's ADEA claim. Fraiser then moved to dismiss Roz's counterclaim for lack of subject matter jurisdiction. The district court should --
A) Dismiss Roz's counterclaim for lack of subject matter jurisdiction, as defamation claims fall under state law jurisdiction.
B) Deny Fraiser's motion to dismiss Roz's counterclaim, as the counterclaim is based on state law and can be heard in federal court.
C) Grant Fraiser's motion to dismiss Roz's counterclaim, as the federal court lacks jurisdiction over state law claims.
D) Allow Roz's counterclaim to proceed, as it is based on federal law and falls under the jurisdiction of the federal court.