A motion to interplead funds lets someone holding disputed money deposit it with a court and step out of the fight between the people claiming it. You file under one of two federal frameworks (the interpleader statute at 28 USC 1335 or Federal Rule of Civil Procedure 22), deposit the money or post a bond, serve every claimant, and ask the court to accept the funds, discharge you from further liability, and enjoin separate lawsuits over the same money. Picking the wrong framework is the most common way these cases get dismissed before anyone reaches the merits, so the choice between statutory and rule interpleader deserves attention before you draft anything.
When Interpleader Is the Right Tool
Interpleader addresses a narrow problem: you hold funds or property, two or more people demand it, and you face a real risk of paying the same obligation twice if separate lawsuits proceed. A life insurer caught between an original and a replacement beneficiary, a bank holding an account both ex-spouses claim, an escrow agent between buyer and seller, an employer juggling competing garnishment orders against one employee’s wages — the pattern is the same. The stakeholder’s position is “I owe this to someone, I don’t know who, and I shouldn’t have to pay twice to find out.”
The dispute has to be genuine. The competing claims must be real enough that you face a credible risk of double liability; speculative or hypothetical claims that no one has actually asserted won’t support the action. The claimants don’t have to rely on the same legal theory, the same facts, or a common origin for their claims.1Office of the Law Revision Counsel. 28 USC 1335 – Interpleader
You also cannot have created an independent liability to one claimant beyond the disputed fund. If you breached a contract with one claimant in a way that produces damages above and beyond the interpleaded money, that separate claim survives the interpleader and can continue against you.
Choosing Between Statutory and Rule Interpleader
Federal interpleader comes in two versions, and the differences drive almost every strategic decision in the case. Many attorneys plead both in the same filing so the court can proceed under whichever one sticks.
Statutory Interpleader Under 28 USC 1335
Statutory interpleader is the more powerful option. It requires only that the disputed funds or property be worth $500 or more and that at least two of the competing claimants be citizens of different states.1Office of the Law Revision Counsel. 28 USC 1335 – Interpleader This minimal diversity threshold is far easier to meet than the complete diversity most federal lawsuits need.
The deposit or bond is a jurisdictional prerequisite. You must either place the disputed funds in the court’s registry or post a bond guaranteeing compliance with whatever the court ultimately orders, and the court lacks authority to hear the case without it.1Office of the Law Revision Counsel. 28 USC 1335 – Interpleader
In exchange, the statute unlocks two advantages unavailable in most civil litigation. The court can issue process on claimants anywhere in the country through U.S. Marshals, and it can immediately restrain all claimants from pursuing separate lawsuits involving the same funds in any state or federal court.2Office of the Law Revision Counsel. 28 USC 2361 – Process and Procedure Venue is also flexible: you can file in any federal judicial district where one or more claimants lives.3Office of the Law Revision Counsel. 28 USC 1397 – Interpleader
Rule Interpleader Under FRCP 22
Rule 22 provides the procedural mechanism but does not create its own basis for federal jurisdiction.4Legal Information Institute. Federal Rules of Civil Procedure Rule 22 – Interpleader You must independently establish jurisdiction, which usually means standard diversity (complete diversity between stakeholder and all claimants, plus an amount in controversy exceeding $75,000) or federal question jurisdiction when the underlying dispute involves a federal law like ERISA.
Rule 22 does not require a deposit or bond as a filing condition, though courts routinely order deposits early in the case. It also lacks the nationwide service and automatic injunction powers of the statute; standard service rules under Rule 4 apply.5Legal Information Institute. Federal Rules of Civil Procedure Rule 4 – Summons
Rule 22’s flexibility is in the stakeholder’s position. You can deny liability entirely or claim partial liability, which traditional equitable interpleader did not permit.4Legal Information Institute. Federal Rules of Civil Procedure Rule 22 – Interpleader A defendant already sued by one claimant can also raise interpleader as a counterclaim or crossclaim to pull the other claimants into the existing case.
Which One Fits Your Case
Statutory interpleader is usually the first choice when claimants are spread across state lines: the lower diversity bar and nationwide service make it easier to get everyone before the same judge. Rule interpleader tends to fit when you are already a defendant and want to drag competing claimants into the pending case, or when federal question jurisdiction exists on its own. Note that the further you stray from the disinterested-custodian model, the harder the motion is to win under either path.
What the Motion Must Contain
A workable motion does three things: describes what’s at stake, explains why you’re caught in the middle, and tells the court exactly what to do.
Describe the disputed asset precisely. For cash, state the exact dollar amount and where the funds currently sit. For property, describe it in enough detail that nothing is ambiguous. Include the date the obligation arose or the event that triggered the competing claims, such as a death, a closing, or a court order.
Identify every known claimant by name and last known address, with a short summary of each one’s basis for claiming the funds. You are not evaluating the merits; you are showing the court the conflict is real. If you know of potential claimants who have not yet formally demanded the funds, identify them too.
State your own position clearly. If you claim no interest in the funds at all, say so. If you are proceeding under Rule 22 and contesting part of the liability, describe exactly what you dispute. The court has to know where you stand before deciding whether interpleader is appropriate.
The Prayer for Relief
The motion ends with a specific request. In an interpleader action, you are typically asking for three orders:
- An order directing the clerk to accept the funds into the court’s registry, where they will stay under judicial control until ownership is resolved.
- An order discharging you from the case once the funds are surrendered, releasing you from further liability tied to them.
- An injunction preventing all claimants from filing or continuing separate lawsuits against you over the same funds in any other court.2Office of the Law Revision Counsel. 28 USC 2361 – Process and Procedure
The injunction is the point. Without it, claimants can ignore the consolidated case and sue you separately in their preferred courts, and the whole purpose of filing collapses.
Filing, Serving, and Depositing the Funds
File the motion and supporting declarations with the appropriate clerk, then serve every identified claimant with the filed papers and a summons. Under statutory interpleader, service can be made nationwide through U.S. Marshals.2Office of the Law Revision Counsel. 28 USC 2361 – Process and Procedure Under Rule 22, standard Rule 4 service applies, which gets harder when claimants are scattered.5Legal Information Institute. Federal Rules of Civil Procedure Rule 4 – Summons
For statutory interpleader, deposit or bond is jurisdictional. You either deposit the disputed funds into the court registry or post a bond guaranteeing compliance with the eventual judgment.1Office of the Law Revision Counsel. 28 USC 1335 – Interpleader In practice, this means a check payable to the clerk or a wire into a court-controlled account. Some courts maintain interest-bearing registry accounts so the funds do not lose value while the claimants litigate.
Under Rule 22, no statute conditions jurisdiction on the deposit, but that does not make it optional in any practical sense. Courts almost always order an early deposit, and dragging your feet on surrender undercuts the argument that you are disinterested. It is one of the fastest ways to lose credibility with the judge.
What Happens After You File
Once the motion is filed and served, the case moves in two distinct phases.
Stage One: Is Interpleader Proper?
The first phase focuses on the stakeholder. The court asks whether genuinely adverse claims exist to the same fund, whether jurisdiction is in place, and whether you are entitled to relief. Claimants may oppose the motion here, arguing the claims are not truly adverse, that you have an independent liability, or that jurisdictional requirements are missing.
If the court finds interpleader proper, it accepts the deposit, discharges you from the case, and makes the injunction against separate litigation permanent.2Office of the Law Revision Counsel. 28 USC 2361 – Process and Procedure Your involvement is typically over at that point. The discharge means no claimant can come back later and sue you for the same funds, which is why most stakeholders file in the first place.
Stage Two: Who Gets the Money?
The second phase is a dispute between the claimants alone. You are gone. The remaining parties litigate their competing ownership through standard discovery, motions, and potentially trial, and the court applies whatever substantive law governs (contract, insurance, probate, ERISA) to decide who takes the money. The case ends with an order directing distribution to the winning claimant.
Recovering Attorney Fees From the Fund
Courts have long-standing equitable authority to award a discharged stakeholder reasonable attorney fees and costs from the interpleaded fund. The reasoning: you did nothing wrong, incurred legal expense to bring the dispute to court for everyone’s benefit, and should not bear the cost when the money was never yours. The award comes out of the fund before the balance goes to the prevailing claimant.
Fee awards are not automatic. The court exercises discretion, and the amount has to be reasonable relative to the complexity of the case and the size of the fund. A stakeholder who delayed filing, contributed to the confusion over ownership, or acted in bad faith will have a harder time recovering. For a disinterested stakeholder who moved promptly, recovery from the fund is common.
If Federal Court Is Not Available
Interpleader is not limited to federal court. Every state has its own interpleader procedure, generally codified in the state’s rules of civil procedure. If your dispute involves less than $500 or all claimants share the same state citizenship, federal interpleader is unavailable and state court is where the action belongs. State procedures follow the same basic pattern (deposit, service, discharge, distribution), but specific rules on deposits, service, and fee recovery vary. Check the clerk’s office in the specific court before filing to confirm current fees and local rules on how interpleaded funds must be deposited.