28 U.S.C. § 1335

Definition

28 U.S.C. § 1335 is a federal statute that provides federal district courts with original jurisdiction in cases of interpleader where two or more claimants are asserting claims to the same property or funds. This section allows a stakeholder, who may be exposed to multiple liability, to bring a single action to resolve conflicting claims and avoid the risk of inconsistent judgments.

5 Must Know Facts For Your Next Test

1. 28 U.S.C. § 1335 allows for interpleader actions in federal court, enabling parties to resolve disputes over property without facing multiple lawsuits.
2. To invoke 28 U.S.C. § 1335, there must be minimal diversity among the claimants, meaning at least one claimant must be from a different state than another.
3. The statute protects stakeholders from liability for wrongful disbursement by allowing them to deposit the disputed property into court.
4. The court has the discretion to allow claimants to present their case collectively in one action, streamlining the resolution process.
5. Under this statute, interpleader can be used not only for tangible property but also for funds held in escrow or insurance proceeds.

Review Questions

• How does 28 U.S.C. § 1335 facilitate the resolution of disputes among multiple claimants over the same property?
  • 28 U.S.C. § 1335 allows stakeholders facing multiple claims to file an interpleader action in federal court, effectively consolidating all claims into one lawsuit. This prevents the need for separate lawsuits that could lead to conflicting outcomes, thereby protecting the stakeholder from multiple liabilities. By depositing the disputed property with the court, the stakeholder can also avoid potential wrongful disbursement, ensuring that all claimants have an equal opportunity to present their case.
• What are the requirements for establishing jurisdiction under 28 U.S.C. § 1335, and why is minimal diversity significant?
  • To establish jurisdiction under 28 U.S.C. § 1335, there must be minimal diversity among the claimants, meaning at least one claimant must be from a different state than another. This requirement is significant because it allows federal courts to hear cases involving parties from different jurisdictions, promoting fairness and preventing forum shopping. Minimal diversity ensures that issues involving state boundaries and multiple legal claims are addressed at a federal level, where there may be more resources and neutrality.
• Evaluate how 28 U.S.C. § 1335 impacts the efficiency of legal proceedings involving conflicting claims and potential liabilities for stakeholders.
  • 28 U.S.C. § 1335 enhances efficiency in legal proceedings by allowing stakeholders facing conflicting claims to bring all parties before a single court rather than navigating multiple lawsuits across different jurisdictions. This consolidation minimizes legal costs and saves time for both the courts and the parties involved. By facilitating a streamlined process for resolving disputes, this statute reduces the risk of inconsistent judgments and clarifies ownership rights more quickly, ultimately benefiting all parties through timely adjudication.

Related terms

Interpleader: A legal procedure allowing a person holding property or funds to initiate a lawsuit to compel claimants to litigate their rights in a single proceeding.

Jurisdiction:

The legal authority of a court to hear and decide cases, which can be based on the subject matter or the parties involved.

Stakeholder:

A party holding property or funds that are the subject of competing claims from others, who seeks judicial resolution to determine the rightful owner.