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10. May the art collector bring an interpleader action against the historian and the teacher in a State A federal court?
An art collector living in State A recently had a painting from his home appraised for $50,000. The art collector believes he is the rightful owner of the painting. However, each of his two cousins, a historian living in State B and a teacher living in State C, also claim rightful ownership of the painting. The art collector would like to resolve who is the rightful owner of the painting.
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The two avenues for federal interpleader include: Federal Rule of Civil Procedure (FRCP) 22 interpleader and the Federal Interpleader Statute under 28 U.S.C. § 1335.
FRCP Rule 22 interpleader requires:
(i) the party seeking to bring the interpleader action to be legitimately concerned about facing liability in multiple actions;
(ii) the federal court to have federal question or diversity jurisdiction over the claim;
(iii) the federal court to have personal jurisdiction over the parties; AND
(iv) proper venue.
28 U.S.C. § 1335 interpleader requirements are less restrictive:
(i) the amount in controversy need only be $500 or more;
(ii) diversity of citizenship for any two adverse claimants is sufficient;
(iii) nationwide personal jurisdiction is authorized; AND
(iv) venue will be proper where any claimant resides.
B is correct. Federal interpleader is generally available through either FRCP 22 or 28 U.S.C. § 1335. In this case, the proper avenue for the art collector is § 1335, which allows for interpleader by a stakeholder when the amount in controversy exceeds only $500 (here, the painting is worth $50,000), when any two adverse claimants are diverse (here, all parties are from different states), nationwide personal jurisdiction applies (State A is not required to have personal jurisdiction over either defendant), and the venue may be where any claimant resides (the art collector lives in State A, meaning venue is proper). As such, the art collector may bring an interpleader action against both the historian and teacher in a federal court in State A, regardless of whether State A would have had personal jurisdiction over the defendants.
A is incorrect. This answer reaches the correct answer with incorrect legal reasoning. The art collector may bring an interpleader action against both the historian and the teacher, and a state court in State A does NOT need to have the ability to exercise personal jurisdiction over either defendant. As stated above, § 1335 allows for nationwide personal jurisdiction, which is less restrictive than FRCP 22, which does require more restrictive personal jurisdiction over the parties.
C is incorrect. This answer correctly notes that interpleader under FRCP 22 would only be available if the amount in controversy (the painting) exceeded $75,000. However, this is not necessary here, where statutory interpleader's less restrictive amount in controversy requirement ($500 or more) enables the art collector to bring the action over the $50,000 painting, as explained above.
D is incorrect. This answer incorrectly implies that the art collector must bring the interpleader action in a state with personal jurisdiction over one of the defendants. However, statutory interpleader authorizes nationwide personal jurisdiction, so it is not necessary that any state's long-arm statute provides personal jurisdiction.