from the expenses of multiple lawsuits.
11 If the court determines that interpleader is
proper, the stakeholder is discharged from liability with respect to the stake, and the
claimants are left to resolve their competing claims.
12
28 U.S.C. § 1335 (a) sets out three conditions for the granting of interpleader
status and the exercise of original jurisdiction by a federal district court.
13 First, the
amount in controversy must be equal to or greater than $500.00.
14 Second, there
must be diversity of citizenship between two or more adverse claimants, who are
claiming or may claim to be entitled to such money or property.
15 Statutory
interpleader requires only minimal diversity.
16 The interpleader does not need to
involve claims arising out of a common source of right or entitlement.
17 The Second
Circuit in Ashton v. Josephine Bay Paul & C. Michael Paul Found., Inc. held that the
interpleader action might be entertained although the titles or claims of the
conflicting claimants did not have a common origin, or were not identical, but
were adverse to and independent of one another.
18 Third, a stakeholder must deposit
with the court either the funds at issue or a bond payable to the clerk of the court in
such amount and with surety as required by the court.
19 The stakeholder must
deposit the largest amount for which it may be liable in view of the subject matter
of the controversy.
20 In Lincoln General Ins. Co. v. State Farm Mut. Auto. Ins. Co.,
the court stated that the failure by a stakeholder to deposit the funds in question into
the registry of a court was a jurisdictional defect, but the stakeholder could cure it.
21
Once the statutory interpleader action is commenced, the court may issue an order to
restrict all claimants from starting or continuing any action which would affect the
stake, make such injunction permanent, and discharge the stakeholder from liability.
22 The order may apply in any district of the United States in which the claimants
reside or may be found. The injunction ensures that the litigation is actually confined
to a single forum and furthers the equitable interest served by interpleader by
11 State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 530 (1967).
12 Sun Life Assur. Co. of Canada v. Thomas, 735 F. Supp. 730, 732–33 (W.D. Mich. 1990).
13 28 U.S.C. § 1335(a) (2012); Thomas, 735 F. Supp. at 731–32.
14 28 U.S.C. § 1335(a) (2012).
15 Id.
16 Id.; State Farm Fire & Cas. Co., 386 U.S. at 530.
17 28 U.S.C. § 1335(b) (2012).
18 Ashton v. Josephine Bay Paul & C. Michael Paul Found., Inc., 918 F.2d 1065, 1069
(2d Cir. 1990).
19 28 U.S.C. § 1335(a)(2) (2012).
20 28 U.S.C. § 1335(a)(2) (2012); CNA Ins. Companies v. Waters, 926 F.2d 247, 249–50 n.6
(3d Cir. 1991).
21 Lincoln General Ins. Co. v. State Farm Mut. Auto. Ins. Co., 425 F. Supp. 2d 738, 742
(E.D. Va. 2006).
22 28 U.S.C. § 2361 (2012).
680
J. Xu
11 If the court determines that interpleader is
proper, the stakeholder is discharged from liability with respect to the stake, and the
claimants are left to resolve their competing claims.
12
28 U.S.C. § 1335 (a) sets out three conditions for the granting of interpleader
status and the exercise of original jurisdiction by a federal district court.
13 First, the
amount in controversy must be equal to or greater than $500.00.
14 Second, there
must be diversity of citizenship between two or more adverse claimants, who are
claiming or may claim to be entitled to such money or property.
15 Statutory
interpleader requires only minimal diversity.
16 The interpleader does not need to
involve claims arising out of a common source of right or entitlement.
17 The Second
Circuit in Ashton v. Josephine Bay Paul & C. Michael Paul Found., Inc. held that the
interpleader action might be entertained although the titles or claims of the
conflicting claimants did not have a common origin, or were not identical, but
were adverse to and independent of one another.
18 Third, a stakeholder must deposit
with the court either the funds at issue or a bond payable to the clerk of the court in
such amount and with surety as required by the court.
19 The stakeholder must
deposit the largest amount for which it may be liable in view of the subject matter
of the controversy.
20 In Lincoln General Ins. Co. v. State Farm Mut. Auto. Ins. Co.,
the court stated that the failure by a stakeholder to deposit the funds in question into
the registry of a court was a jurisdictional defect, but the stakeholder could cure it.
21
Once the statutory interpleader action is commenced, the court may issue an order to
restrict all claimants from starting or continuing any action which would affect the
stake, make such injunction permanent, and discharge the stakeholder from liability.
22 The order may apply in any district of the United States in which the claimants
reside or may be found. The injunction ensures that the litigation is actually confined
to a single forum and furthers the equitable interest served by interpleader by
11 State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 530 (1967).
12 Sun Life Assur. Co. of Canada v. Thomas, 735 F. Supp. 730, 732–33 (W.D. Mich. 1990).
13 28 U.S.C. § 1335(a) (2012); Thomas, 735 F. Supp. at 731–32.
14 28 U.S.C. § 1335(a) (2012).
15 Id.
16 Id.; State Farm Fire & Cas. Co., 386 U.S. at 530.
17 28 U.S.C. § 1335(b) (2012).
18 Ashton v. Josephine Bay Paul & C. Michael Paul Found., Inc., 918 F.2d 1065, 1069
(2d Cir. 1990).
19 28 U.S.C. § 1335(a)(2) (2012).
20 28 U.S.C. § 1335(a)(2) (2012); CNA Ins. Companies v. Waters, 926 F.2d 247, 249–50 n.6
(3d Cir. 1991).
21 Lincoln General Ins. Co. v. State Farm Mut. Auto. Ins. Co., 425 F. Supp. 2d 738, 742
(E.D. Va. 2006).
22 28 U.S.C. § 2361 (2012).
680
J. Xu