Interpleader Action: Rule 22, Section 1335, and Court Process

The procedure for an interpleader action runs on a fixed sequence: choose between Rule 22 and statutory interpleader under 28 U.S.C. § 1335, file a complaint that names every claimant and states the basis for federal jurisdiction, deposit the disputed money or post a bond, serve each claimant, and move the court through two stages—first discharging you from the dispute, then letting the claimants litigate among themselves for the fund.

Choosing Your Filing Path

Federal courts offer two separate routes, and the choice drives nearly every other procedural decision in the case.

Rule 22 Interpleader

Rule 22 of the Federal Rules of Civil Procedure lets any plaintiff facing double or multiple liability bring all claimants into a single action. It is a procedural device, not an independent grant of jurisdiction, so the case must independently qualify for federal court. That usually means diversity jurisdiction under 28 U.S.C. § 1332, which requires complete diversity (the stakeholder must be a citizen of a different state from every claimant) and an amount in controversy over $75,000.¹ Service follows ordinary rules, meaning you can only reach defendants within the forum state or through long-arm statutes, and venue follows the standard federal venue rules.

Statutory Interpleader Under 28 U.S.C. § 1335

Statutory interpleader is broader and far more commonly used. It requires only minimal diversity (at least two adverse claimants who are citizens of different states), and the property at stake must be worth at least $500. The stakeholder must also deposit the disputed funds with the court or post a bond; this is a jurisdictional requirement, not optional.²

Statutory interpleader carries two procedural advantages Rule 22 does not. The court can issue nationwide service of process through U.S. Marshals, reaching claimants wherever they live. The court can also enter a restraining order barring all claimants from suing the stakeholder in any other state or federal court while the interpleader is pending.³

Which to Pick

Most stakeholders file under § 1335 unless there is a specific reason not to. The jurisdictional bar is lower, service reaches further, and the court can freeze parallel litigation immediately. Rule 22 makes sense when every claimant is in the same state and the stakeholder is from a different one, or when the underlying claim raises a federal question. If claimants are scattered across states, as in most life insurance disputes, § 1335 is almost always the better tool.

Where to File

Under 28 U.S.C. § 1397, a statutory interpleader action can be filed in any federal judicial district where one or more claimants reside.⁴ That gives the stakeholder flexibility when claimants sit in different parts of the country. Rule 22 interpleader does not get this special venue treatment and follows the general federal venue statute.

Preparing the Complaint and Supporting Documents

The complaint in interpleader must identify every known claimant by full legal name and address, describe the disputed property or fund with enough specificity for the court to identify it, explain why the stakeholder faces conflicting claims, and state the basis for federal jurisdiction. Under Federal Rule of Civil Procedure 11, the signer certifies that the filing is supported by evidence, is not brought for harassment or delay, and has a basis in existing law.⁵

Several documents accompany the complaint:

A civil cover sheet categorizing the case for court records.
A summons for each defendant, issued by the clerk after filing and served on every claimant.
A corporate disclosure statement under Federal Rule of Civil Procedure 7.1 if the stakeholder is a corporation, identifying any parent corporation and any publicly held company owning 10% or more of the stakeholder’s stock.⁶

Most federal courts require electronic filing through the Case Management/Electronic Case Files (CM/ECF) system, and each district court’s website lists its local forms and filing requirements. The filing fee for a federal civil action is $405, which is $350 set by statute plus a $55 administrative fee.⁷⁸

Depositing the Fund or Posting a Bond

For statutory interpleader, the stakeholder must transfer the disputed money or property to the court’s registry before the case can move forward. The stakeholder files a motion asking the court to accept the deposit, and the court issues an order directing the clerk to receive the funds.²

Under 28 U.S.C. § 2041, money deposited with the court goes to the U.S. Treasury.⁹ Through the Court Registry Investment System, those funds are pooled and invested in short-term Treasury securities, earning market-rate returns while the litigation plays out.¹⁰ The money stays there until the judge orders distribution.

When the disputed property is a physical object that cannot be wired to the Treasury, such as a painting, a vehicle, or equipment, the stakeholder can post a bond instead. The judge sets the bond amount to cover the full value of the property and potential costs. Either way, once the asset is out of the stakeholder’s hands, the central purpose of interpleader is served.

Serving Every Claimant

After the clerk issues summonses, every claimant must be served. Under Federal Rule of Civil Procedure 4, service can be carried out by anyone at least 18 years old who is not a party to the case, typically a professional process server or through certified mail with a return receipt.¹¹ A process server generally costs between $40 and $200 per defendant depending on location and difficulty.

In statutory interpleader, the court can order nationwide service through U.S. Marshals, which is critical when claimants are scattered across different states.³ This solves the usual problem of reaching out-of-state defendants with no connection to the forum.

Proof of service must be filed for every claimant. If a defendant is not served within 90 days of the complaint being filed, the court can dismiss the action against that defendant or set a new deadline.¹¹ Missing a claimant can prevent the stakeholder from obtaining a full discharge, because an unserved party could still sue separately.

The Two-Stage Court Process

Interpleader cases unfold in two distinct phases, and the stakeholder’s role changes between them.

Stage One: Stakeholder Discharge

In the first stage, the judge decides whether interpleader is appropriate. The court examines whether the stakeholder genuinely faces conflicting claims, whether the fund or property has been deposited, and whether the stakeholder is truly neutral. If everything checks out, the court issues an order discharging the stakeholder from further liability over the disputed fund. In statutory interpleader, the court can also make the restraining order permanent, barring claimants from pursuing the stakeholder in other courts over the same property.³

That discharge is the whole point of filing. Once entered, the stakeholder’s exposure to the underlying dispute is over. The stakeholder can also ask for reasonable attorney fees from the deposited fund.

Stage Two: Claimant Litigation

After the stakeholder exits, the claimants fight it out. This phase looks like any other civil case: discovery, motions, and potentially a trial on the merits. Each claimant must prove a superior right to the fund. The case ends when the judge issues a distribution order directing the clerk to release the money.

Recovering Attorney Fees as the Stakeholder

Courts have discretion to award attorney fees and costs to the stakeholder from the deposited fund, and they frequently do, though the amount is expected to be modest. A stakeholder generally qualifies when it is genuinely disinterested, has conceded liability on the underlying obligation, has deposited the funds, and has sought discharge. Courts weigh whether the case was straightforward, whether the stakeholder acted in good faith, and whether it performed a useful service by consolidating the dispute.

Recoverable fees are narrow in scope. Courts typically limit reimbursement to work directly tied to preparing the complaint, arranging service, depositing the fund, and securing the discharge order. Fees for defending counterclaims, conducting discovery, or researching whether to file at all are usually excluded. If the stakeholder contributed to the confusion that created the competing claims, for example through sloppy beneficiary designations, the court may deny fees entirely.

Counterclaims and the Clean Hands Question

Discharge from the fund does not necessarily mean the stakeholder walks away free of all liability. Claimants can bring counterclaims asserting independent causes of action. An insurance company that files interpleader to resolve a beneficiary dispute might still face a counterclaim from one claimant alleging mishandling of the policy or bad faith. These claims are litigated separately from the question of who gets the money. The discharge covers only the specific obligation that was deposited; it does not shield against tort claims, breach of contract allegations, or other independent disputes.

Because interpleader is an equitable remedy, courts can theoretically deny it to a stakeholder whose own misconduct created the competing claims, a principle sometimes called the clean hands doctrine. In practice, modern courts apply it leniently in this context, treating interpleader as a procedural tool meant to be used liberally. Administrative errors or past negligence usually will not defeat the interpleader, though they may affect fee awards or support counterclaims.

Tax Treatment of Registry Funds

Money sitting in the court registry earns interest, and someone owes taxes on it. For statutory interpleader deposits under § 1335, federal courts treat the funds as Disputed Ownership Funds for IRS purposes. Under that classification, the Administrative Office of the United States Courts handles tax administration while the money remains in the registry. Once the court distributes the funds, the recipient may receive a Form 1099-INT reporting any interest earned and will owe income tax on it. Recipients should expect to provide a completed IRS Form W-9 before the clerk releases the money.

State Court as an Alternative

Federal court is not the only option. Every state has some form of interpleader procedure available through its own court system, typically modeled on the same principles. State court interpleader is often the right choice when all claimants are in the same state, the amount at stake is relatively small, or there is no basis for federal jurisdiction. Filing requirements, fees, and procedural rules vary by state, but the mechanics are the same: deposit the asset, ask for discharge, and let the claimants litigate. If claimants are in multiple states, federal statutory interpleader is almost always the better choice because of its nationwide service and its power to block parallel litigation.

1
Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs
2
Office of the Law Revision Counsel. 28 USC 1335 – Interpleader
3
Office of the Law Revision Counsel. 28 USC 2361 – Process and Procedure
4
Office of the Law Revision Counsel. 28 USC 1397 – Interpleader
5
United States Courts. Complaint for Interpleader and Declaratory Relief
6
Legal Information Institute. Federal Rules of Civil Procedure Rule 7.1 – Disclosure Statement
7
Office of the Law Revision Counsel. 28 USC 1914 – District Court; Filing and Miscellaneous Fees
8
United States Courts. District Court Miscellaneous Fee Schedule
9
Office of the Law Revision Counsel. 28 USC 2041 – Deposit of Moneys in Pending or Adjudicated Cases
10
U.S. District Court for the Middle District of North Carolina. Court Registry Investment System (CRIS)
11
Legal Information Institute. Federal Rules of Civil Procedure Rule 4 – Summons