Interpleader is a procedural device that protects a neutral party (the stakeholder) who holds money, property, or a debt that is claimed by multiple parties with adverse interests. Rather than risk paying or delivering to the wrong claimant and facing repeated lawsuits, the stakeholder deposits the disputed asset with the court (or offers to do so) and asks the court to compel the claimants to assert their competing claims against each other. Once the asset is deposited, the stakeholder is typically discharged from further liability.
In the United States federal system, interpleader takes two forms:
- Rule interpleader under Federal Rule of Civil Procedure 22, which uses ordinary jurisdictional rules (complete diversity and the standard amount-in-controversy threshold, or federal question).
- Statutory interpleader under 28 U.S.C. § 1335, which relaxes those rules: only minimal diversity between any two claimants is required, the amount in controversy needs to exceed only $500, and nationwide service of process is available under 28 U.S.C. § 2361. The statute also authorizes courts to enjoin parallel proceedings affecting the fund.
The U.S. Supreme Court addressed the limits of statutory interpleader in State Farm Fire & Casualty Co. v. Tashire (1967), holding that interpleader cannot be used as a "bill of peace" to consolidate all tort claims arising from a mass accident — its function is to protect the fund, not to centralize unrelated litigation.
Interpleader is common in disputes over life insurance proceeds, escrow funds, pension benefits, and bank deposits where, for example, an insurer faces competing claims from a named beneficiary and a decedent's estate. Similar mechanisms exist in other common-law jurisdictions: in England and Wales, interpleader claims were historically governed by the Rules of the Supreme Court and are now handled as stakeholder claims under Part 86 of the Civil Procedure Rules. While primarily a domestic litigation tool, interpleader occasionally surfaces in cross-border disputes over frozen assets or sovereign funds.
Example
In *State Farm Fire & Casualty Co. v. Tashire* (1967), State Farm filed a statutory interpleader action depositing its $20,000 policy limit after a bus-truck collision in Oregon generated claims from dozens of injured passengers.
Frequently asked questions
Rule 22 interpleader follows standard jurisdictional rules requiring complete diversity, while statutory interpleader under 28 U.S.C. § 1335 requires only minimal diversity among claimants, a $500 amount in controversy, and permits nationwide service of process.
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