Civil Procedure
Interpleader
Definition
Interpleader is a procedural device that allows a party holding a stake (the stakeholder) to bring all rival claimants into a single action to determine who is entitled to the property or fund. It prevents the stakeholder from facing multiple, inconsistent liabilities. There are two forms: statutory interpleader under 28 U.S.C. Section 1335 (requiring only minimal diversity and a $500 amount) and rule interpleader under Federal Rule 22 (requiring complete diversity and the standard jurisdictional amount).
Example
An insurance company faces claims from two parties to the same policy proceeds. It files an interpleader action to deposit the funds with the court and let the claimants litigate their entitlement.