Civil Procedure

Fact pattern

A tour company owns and operates a bus, which is driving through State A. Very suddenly, the bus runs off the road and overturns. No one dies, but the passengers do sustain a range of injuries, some permanent. The accident occurred because the bus driver fell asleep at the wheel. An investigation reveals that the tour company required the driver to work more hours per week than applicable law permits, which may have caused the accident by fatiguing the driver.

Fifty passengers were on the bus when the accident took place. Of these, 20 are citizens and residents of State A, 20 are citizens and residents of State B, and 10 are citizens and residents of State C. Both the tour company and the driver are citizens of State A. 

The tour company has a liability insurance policy that provides coverage up to $5,000,000 per occurrence, and the insurance company concedes that the policy covers this accident. Assume that the accident constitutes a single occurrence. The insurance company is a citizen of State B. 

After the accident, the passengers return to their homes and begin to plan litigation, as each passenger has a personal-injury claim that arises under the law of State A. To that end, the passengers, through their various attorneys, initiate discussions with both the tour company and the insurance company. The passengers’ attorneys have prepared estimates of each passenger’s claim for damages. The claims range from a low of $25,000 to a high of $750,000. The total amount of the claims will exceed the insurance policy’s $5,000,000 limit. 

Based on these discussions, the insurance company’s attorney prepares to file an interpleader suit in the U.S. District Court for the District of State A. The defendants will be the tour company, the driver, and all 50 passengers. Assume that State A’s long-arm statute does not extend to any of the passengers.

Questions

1. Can the insurance company properly base its suit on Fed. R. Civ. P. 22 (Rule 22) interpleader? Explain, addressing venue, personal jurisdiction, and subject-matter jurisdiction.
2. Can the insurance company properly base its suit on statutory interpleader under 28 U.S.C. § 1335 et al.? Explain, addressing venue, personal jurisdiction, and subject-matter jurisdiction (including any affirmative steps the insurance company may need to take, in order for the court to have subject-matter jurisdiction).