CIVIL PROCEDURE II OUTLINE
Interpleader: Definition- an equitable device that enables a party against whom conflicting claims with respect to the same debt or property are asserted (the stakeholder) to join all the adverse claimants in the same action and require them to litigate among themselves to determine which, if any, has a valid claim to the debt or property involved.
o Statutory Interpleader:
o §1335(a) – If stakeholder holds debt/property worth $500 or more.
o §1335(a)(1) – that may be claimed by multiple claimants of diverse citizenship.
o §1335(a)(2) – Stakeholder may deposit debt/property with the court and then interplead claimants in single action.
o Claimants must then litigate amongst themselves to determine which, if any, has a valid claim to property.
o Interpleader ct may only enjoin suits against defendant in control of insurance policy. Other parties in same transaction or occurrence cannot be enjoined. (State Farm v. Tashire)
o Only minimal diversity is required. §1335(a)(1): Diversity of citizenship that exists between any two adverse claimants but at least two claimants must be diverse.
o Deposit or bond required for claimed assets.
o Injunction against other suits: injunctions authorized and gives finality by §2361.
o Process: Nationwide service of process. Personal jurisdiction may be acquired through nationwide service of process. Rule 4(k)(c)
o Venue: §1397 authorizes venue in judicial district in which one or more claimants reside.
o Erie doctrine applies to federal interpleader cases.
o Rule Interpleader: Persons having claims against plaintiff may be joined as defendants and required to interplead when their claims are such that plaintiff is or may be exposed to double or multiple liability
o Complete diversity between stakeholder and all claimants and defendants’ (Fails §1335’s minimal diversity requirement.)
o Subject matter jurisdiction: complete diversity between shareholder and defendants and claimants required.
o Amount in controversy- more than 75k §1332
o Process: personal jurisdiction limited by rule four (personal jurisdiction limited by jurisdiction claimed by state cts in state where federal court sits except any applicable long arm statute.)
o Venue: governed by general venue statute §1391(a)(2)
o Disposition of claimed assets: Courts may or may not require deposit/bond (Rule 67)
o Injunction against other suits may be authorized. §2283
o Erie doctrine applies to federal interpleader cases: Federal ct must apply conflict of law rules of state where federal ct sits.
o Policy: Prevents incompatible judgments / Prevents vexation / Judicial economy; and / Avoids the race to the court house.
o Counter policy: Prevents claimants from choosing forum / Lack of jury trial (For distributing funds.) / Claimants may prefer individual litigation.
Intervention: Definition: A procedure whereby a nonparty, upon timely application, may become a party in a lawsuit in order to protect her interests in the action.
o Intervention of Right- Rule 24(a)
o Upon timely application: (timely application requires a balancing test) anyone shall be permitted to intervene in an action.
o When a statute of the US confers an unconditional right to intervene;
o When the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.
o Timely application requires a balancing test.
o Third parties may intervene after judgment on merits, provided conditions of rule 24(a) are met.
o Practical impairment of intervener’s interest is sufficient- impairment is not limited to legally binding effects. (Knapp v. Hankins)
o Stare decisis supplies practical disadvantage which constitutes an impairment of third party’s ability to protect that party’s interest when:
§ Unique issue of law is involved; and
§ There is little likelihood that it will be reconsidered after it is decided in current litigation. (Atlantis case)
§ However, interest must be specifically “relating to property/transaction”
· When practical impairment fails; go to permissive intervention.
o Supplemental subject-matter jurisdiction is available for intervener’s claims when main action is federal-question case. §1367(a)
o Supplemental subject-matter jurisdiction is unavailable for: plaintiff’s claims against persons made parties under Rule 24 and claims by persons seeking to intervene as plaintiffs under Rule 24 and §1367(b).
o Under general power to control litigation, ct may impose conditions for intervention (i.e. l
or less, whether a class will be permitted usually turns on the following factors: The smaller the claim, the more likely a class suit will be allowed (money factor)
o The more difficult the geographic location makes it for class members to intervene, the more likely a class suit will be allowed.
o Note- if exam has ? Involving a small number of claims ie 35- must determine whether court would likely allow a class action, the less likely it is that individuals would bring their own suit.
o However, under Rule 23(b)(3) class must be manageable.
o All identifiable members of the class must be given individual notice of the action, and the larger the class, the more cumbersome and expensive this becomes.
o The class must be defined with clarity and the members must be identified.
§ Commonality – must have – Rule 23(a)(2): There are questions of law or fact common to the class.
§ Typicality- must have- Rule 23(a)(3)
o Claims/defenses of representative parties are typical of claims/defenses of class.
o Specific link must exist between class representatives’ claims and claims of entire class.
o Will resolution of at least one issue affect all or substantially all of putative class members?
§ Adequacy- must have- Rule 23(a)(4)
§ Ct acts as fiduciary for absent class members and must therefore; Monitor adequacy of representation case; Representative parties will fairly/adequately protect interests of class; Adequacy is ongoing requirement; Ct may decertify if representation becomes inadequate at any time.
§ Elements of adequacy: Named plaintiffs must have substantial stake in the action. Plaintiff lawyers must be competent in complex litigation. No conflicts of interest within the class. Subclass solution to conflict of interest: Where conflicts of interest exist within the purported class, Rule 23(c)(4)(B) authorizes certification of sub-classes, which avoids decertifying entire class action.