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).