Monday, November 3, 2014

MBE Fast Fact: Interpleader

Occasionally, situations will arise in which a person (often deemed a "stakeholder") will want to determine who among adverse claimants has a valid claim to an item of property ("the stake"). As such, both the Federal Rules of Civil Procedure and federal statutes allow for that stakeholder to institute an interpleader suit to make this determination. It applies only if separate actions might result in double liability against the stakeholder.

There are two interpleader procedures in the federal courts, and both procedures should be known for purposes of the MBE:

(A): Rule 22 Interpleader: Rule 22 requires either that (1): There is complete diversity between the stakeholder and all adverse claimants and that the $75,000 amount in controversy is satisfied, or (2): federal question jurisdiction applies. The regular rules for service & process and venue apply.

(B): Section 1335 interpleader (sometimes referred to as "statutory interpleader") requires only minimum diversity between the claimants. This minimum diversity will be satisfied if one claimant is diverse from one other, even if all claimants are not diverse from all others), and that at least $500 is at issue. Service may be nationwide and venue is proper where any claimant resides.

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