New York Life Ins. Co. v. Dunlevy
241 U.S. 518 (1916)
- NY Life issued an insurance policy worth $2.5k. Three people filed claims with NY Life for the money:
- A guy named Gould (in Pennsylvania),
- Gould’s daughter Dunlevy (who lived in California),
- A department store in Pennsylvania.
- NY Life started an interpleader action in Pennsylvania State Court, who decided that Gould should get the money.
- NY Life tried to bring Dunlevy into the case as an interpleader under Rule 22, but they were unable to get in personam jurisdiction on Dunlevy in the Pennsylvania Court.
- Afterwards, Dunlevy sued in California Court saying that the Pennsylvania Court didn’t bind her because they lacked in personam jurisdiction.
- The California Court found that the Pennsylvania decision was not binding, and awarded the money to Dunlevy.
- Therefore, NY Life had to pay twice on the same policy!
- The whole point of an interpleader action is to not have to pay multiple claims on the same policy. This case illustrated that the system was broken.
- In response, Congress passed the Federal Interpleader Act (aka 28 U.S.C. §§ 1335, 1397, 2361), which gives an express grant of Federal subject matter jurisdiction over interpleader claims (aka statutory interpleader).
- This means that interpleader cases can be heard in Federal Court, which has jurisdiction over everybody, and this problem won’t happen again.
- In statutory interpleader you only need two adverse claimants with diversity.
- The claimants here were Gould and Dunlevy.
- Remember, since it is a Federal law, venue exists wherever any claimant resides.
- Also remember that since it is a Federal law, there is nationwide service of process.
- Btw, you can also sue under Rule 22, (aka rule interpleader), as an alternative basis, but there might be jurisdictional problems (as seen in this case).