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State Farm Fire & Casualty Co. v. Tashire

Supreme Court of the United States · 1967 · Civil Procedure

Civil ProcedureInterpleaderDiversity JurisdictionInjunctionsinterpleader§ 1335§ 2361minimal diversity

Facts

A Greyhound bus collided with a pickup truck in California, killing two passengers and injuring many others. Several injured passengers sued Greyhound, the bus driver, the truck driver Ellis Clark, and the truck owner/passenger, seeking damages far exceeding State Farm's policy limits on Clark of $10,000 per person and $20,000 per occurrence. State Farm, Clark's insurer, filed an interpleader action in federal court in Oregon, deposited $20,000, and sought to require all claimants to litigate in that single proceeding while also seeking discharge from further policy obligations. The district court entered an injunction effectively requiring all suits against State Farm, Clark, Greyhound, and the bus driver to be prosecuted in the interpleader action.

Issue

Whether statutory interpleader under 28 U.S.C. § 1335 was available to an insurer before tort claimants had reduced their claims against the insured to judgment, and whether the interpleader court could enjoin suits not only against the insurer's fund but also against the insured and other alleged tortfeasors. The case also required the Court to decide whether § 1335's diversity requirement is satisfied by minimal diversity among claimants.

Rule

Under 28 U.S.C. § 1335, statutory interpleader requires only minimal diversity among adverse claimants. The statute permits interpleader where claimants 'are claiming or may claim' entitlement to the stake, so an insurer need not await judgments on underlying tort claims before invoking interpleader. But the interpleader remedy and § 2361 injunction power are limited to protecting the stakeholder and the fund or obligation involved; interpleader may not be used as an all-purpose bill of peace to force all underlying mass-tort litigation against alleged tortfeasors into a single forum.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

After a pileup outside Toledo, Ohio, eight injured motorists asserted claims likely to exceed a $75,000 liability policy issued by Larkfield Mutual Insurance to Devin Cole. Larkfield filed a statutory interpleader action in federal court in Ohio, deposited $75,000, and named all claimants; six claimants are Ohio citizens, one is a Michigan citizen, and one is an Indiana citizen.

Assuming the deposit and amount-in-controversy requirements are satisfied, is statutory interpleader jurisdiction available?

Explanation. Jurisdiction exists. Under the majority opinion, § 1335 requires only minimal diversity among adverse claimants, not complete diversity among all claimants and not diversity between the stakeholder and every claimant. The presence of claimants from Michigan and Indiana, along with Ohio claimants, satisfies the statute even though many claimants are co-citizens. (Derived from State Farm Fire & Casualty Co. v. Tashire (1967).)