Interpleader

Question 1

What is Interpleader? Rule 22

Answer 1

Allows a party holding property or money (stakeholder) to initiate a lawsuit to compel two or more other parties, who have competing claims to that property/money, to litigate their claims in a single action

Question 2

What is the procedure that parties use a court to decide between multiple demands?

Answer 2

• Plaintiff-stakeholder filed interpleader complaint, naming multiple claimants as defendant-claimants
• First Stage: depositing the property, determining whether interpleader is appropriate
• Second Stage: determining entitlement to the disputed property

Question 3

What are the two Subject Matter Consideration Rules when dealing with Interpleader?

Answer 3

1. Statutory Interpleader: USC 1335
2. Rule Interpleader: Rule 22

Question 4

What is Statutory Interpleader U.S.C 1335?

Answer 4

Allows federal courts to hear cases where the property in dispute is worth at least $500 and there are at least two competing claimants from different states

a. Jurisdiction: Requires minimal diversity: two claimants must be citizens of different states
b. Amount in controversy: At least $500 at stake
c. Venue: The action can be brought in any district where one or more claimants reside
d. Process: Allows nationwide service of process

Question 5

What is Rule Interpleader? Rule 22

Answer 5

Can be used as a remedy for anyone who may be exposed to double or multiple liabilities. Stakeholders may prefer rule interpleader to obtain venue in the district where the assets are held

Required: Complete Diversity and the amount in controversy and does not exceed $75,000.

1. Jurisdiction: Requires complete diversity between the stakeholder and claimants (or a federal question if one is involved)
2. Amount in controversy: Must exceed $75,000 if based on diversity
3. Venue & Service: must follow general federal rules for service proves and venue requirements