Pg 22

Question 1

What is interpleader?

Answer 1

If the holder of a large sum of money or piece of property gets conflicting claims against it and there is uncertainty about who will pay, that person can bring an action to force everyone to go to court and have the court decide who should pay in a single proceeding. This is used when the claim could expose the plaintiff to multiple or double liability

Question 2

What is the difference between cross-claims, counterclaims, interpleader, impleader, and intervention?

Answer 2

• cross-claims: brought against the opposing party
  – counter-claims: brought against a co-party
• impleader: brought against a third-party defendant
• interpleader: stakeholder brings anyone that could ask for a piece of the pie together
• intervention: a third-party joins a pending lawsuit as either a plaintiff or defendant to protect his interest

Question 3

What is the rationale behind interpleader?

Answer 3

This is meant to protect the stakeholder from having to pay more than once

Question 4

Can interpleader be sought through cross-claim or counter-claim?

Answer 4

Yes

Question 5

If two people both claim to be the sole beneficiary of a life insurance policy, what will the insurance company often do?

Answer 5

Use interpleader to put them together to avoid the costs of multiple judgements

Question 6

What is a case that almost always involves interpleader?

Answer 6

Insurance fights over payment of benefits

Question 7

Interpleader is always from whose perspective?

Answer 7

The stakeholder. He has a pot of gold that others have claims to and he only wants to litigate once

Question 8

What are the two different kinds of interpleader?

Answer 8

• rule interpleader

– statutory interpleader

Question 9

What is the difference between rule interpleader and statutory interpleader?

Answer 9

• rule: requires complete diversity and an AIC of $75,000+
  – statutory: only needs a $500 minimum claim and minimal diversity (only needs two claimants to be from different states)

Question 10

What is rule interpleader?

Answer 10

There must be complete diversity, and an AIC over $75,000

Question 11

What is statutory interpleader?

Answer 11

There must be a $500 minimum claim and there must be minimum diversity [two claimants from different states].

Question 12

What is the predominant or best method that is used for interpleader?

Answer 12

Statutory interpleader because it is less stringent

Question 13

What happens to the stakeholder’s stake in an interpleader case?

Answer 13

It is deposited and a bond is required

Question 14

What is intervention?

Answer 14

If a third-party wants to join a pending lawsuit in order to protect his interest, he can do this as either plaintiff or defendant as long as application is timely

Question 15

If a plaintiff sues a defendant, and the defendant asserts a claim back, and a third-party wants to join, what is that called?

Answer 15

Intervention

Question 16

What is the goal of intervention?

Answer 16

• to achieve judicial economy of scale by resolving related issues in one suit
• ensures adequate representation of other parties by allowing them to become part of the suit or making sure that the existing parties will protect their interests

Question 17

What is required for someone to intervene in a lawsuit?

Answer 17

Their interest must have been directly affected in a substantially concrete way

Question 18

What’s an example of intervention?

Answer 18

Parents have a sufficient interest in the education of their kids to justify initiating a lawsuit

Question 19

How is intervention different from interpleader?

Answer 19

In intervention the people are trying to join an existing suit, while interpleader involves a stakeholder creating a suit to try to resolve it

Question 20

What are the required elements for intervention?

Answer 20

• must claim an interest in the property that is the subject of the action it is based on
  – the pending action must harm the intervenor’s ability to protect his interest
  – the existing parties must not be able to adequately protect the intervenor’s interests
  – the motion must be timely

Question 21

For the element of intervention that requires that the existing parties must not be able to adequately protect the intervenor’s interests, how is court discretion involved?

Answer 21

The court must decide if the absentee will make the same arguments as the original party or has the same interests, and if he does then it’s not necessary to intervene. The new party must bring something to litigation that would otherwise be ignored

Question 22

What does it mean for intervention that the motion must be timely?

Answer 22

It can’t be unduly delayed or prejudice the original party’s rights

Question 23

What are the two types of intervention?

Answer 23

– intervention of right/mandatory

– permissive intervention/discretionary

Question 24

What is intervention of right?

Answer 24

Once a timely motion is brought for intervention, the court must allow anyone to intervene who is given an unconditional right to intervene by federal statute, or claims an interest relating to the property or transaction that is the subject of the action, and disposing of it would impair that person’s ability to protect his interest, unless existing parties adequately represent that interest. If denied, it is immediately appealable.

Question 25

Which type of intervention is the preferable approach?

Answer 25

Intervention of right. This is preferable because the party is not at the whim of the court’s discretion. He tries to make it work first, and then if it doesn’t, he can go with permissive intervention

Question 26

What is permissive intervention?

Answer 26

On timely motion, a court may allow anyone to intervene that is given a conditional right by federal statute or has a claim or defence that shares with the main action a common question of law or fact. This way is the benefit of intervening against the possible delay or expense

Question 27

If permissive intervention is denied, when can it be appealed?

Answer 27

Only after a final judgement

Question 28

Because intervention can be time-consuming and expensive, when is it only allowed for permissive intervention?

Answer 28

Only if value is added by it. The court weighs the efficiency and judicial economy against the potential impact on the applicant as well as complexity.

Question 29

What is intervention by government officers or agencies?

Answer 29

Federal or state government officers or agencies can intervene if a party’s claim or defence is based on statute or executive order, or any regulation that is issued under the statute or executive order. The federal government has the unconditional right to intervene in suits that seek relief for denial of equal protection based on race, color, religion, sex, or national origin