State Farm Fire & Cas. Co. v. Tashire

386 U.S. 523, 87 S. Ct. 1199 (1967)

 

RULE:

28 U.S.C.S. § 1335 applies where there are two or more adverse claimants, of diverse citizenship. Section 1335 has been uniformly construed to require only "minimal diversity," that is, diversity of citizenship between two or more claimants, without regard to the circumstance that other rival claimants may be co-citizens. Section 1335 requires no more.

FACTS:

Following an accident between a bus and an automobile, multiple injured passengers brought suits against multiple defendants. Petitioner, the insurance company of one of the defendants, the driver of the automobile, brought the interpleader action to consolidate all claims against the available proceeds of the policy. Jurisdiction was based on general diversity of citizenship. The lower court granted an injunction prohibiting the prosecution of any claims against petitioner outside of the interpleader action and extended that injunction to include several other defendants in the underlying action. This was reversed by the appellate court stating that the injured passengers are not claimants of the insurer until judgment is first obtained against the insured.

ISSUE:

Are the injured passengers considered claimants of the insurer even without securing judgment against the insured?

ANSWER:

Yes.

CONCLUSION:

The court, on its own initiative took on the matter of diversity as a jurisdictional requirement of the interpleader statute. It ruled that 28 U.S.C.S. § 1335 applies where there are two or more adverse claimants, of diverse citizenship. Section 1335 has been uniformly construed to require only "minimal diversity," that is, diversity of citizenship between two or more claimants, without regard to the circumstance that other rival claimants may be co-citizens. As for the right of the injured parties to an injunction and to consolidate the claims against petitioner, the court rejected the argument that petitioner had to wait for those claims to be reduced to a judgment.  The court held, however, that the lower court exceeded its authority in extending the injunctive protection to the other defendants in the underlying action, who were not related to the fund of insurance proceeds.

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