368 F. Supp. 3d 460
E.D.N.Y2019Background
- Madison Stock Transfer (NY transfer agent) faced conflicting directions about 300 million Exlites shares: Florida default judgments directing issuance to Julian (200M) and Washington (100M), and Exlites ( issuer / majority shareholder Singleton) directing non‑issuance/cancellation. Madison sued under Rule 22 and 28 U.S.C. § 1335 to interplead.
- Julian (Florida domiciliary, former Exlites president) and Washington obtained default judgments in Florida ordering the transfer agent to issue the shares; Madison received demand letters from Julian's counsel and threats of suit.
- Madison also asserted claims for abuse of process (against Julian and Washington) and account stated (against Exlites). Several other defendants (Belize, Bahamas entities) were named but many were unserved or未appeared.
- The court analyzed whether Madison satisfied requirements for (1) rule interpleader (needs independent federal jurisdiction and service rules) and (2) statutory interpleader under § 1335 (minimal diversity, $500+ in controversy, and mandatory deposit/bond).
- Court found rule interpleader jurisdiction via diversity but held New York long‑arm did not support specific personal jurisdiction over Julian based on a single demand letter and alleged threats; thus Julian would be dismissed if the action proceeded as rule interpleader.
- Court held statutory interpleader would supply jurisdiction and nationwide service under § 2361 (so personal jurisdiction over Julian exists if Madison posts the required deposit or bond). The court ordered Madison to: (a) show cause on venue by Apr 10, 2019; and (b) deposit the disputed 300M shares or post a bond equal to their value by Apr 24, 2019, or else proceed as rule interpleader (which would result in Julian's dismissal).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 22 interpleader is available (subject‑matter jurisdiction) | Madison: diversity exists because stakeholder (NY) is diverse from claimants; value of disputed shares exceeds $75,000. | Julian: disputes aspects but concedes shares value exceeds jurisdictional threshold. | Held: Rule interpleader satisfied via diversity jurisdiction and amount in controversy. |
| Whether Madison has a good‑faith fear of multiple liability (appropriateness of interpleader) | Madison: conflicting directives (issuance per Florida judgments v. issuer's objections) create real risk of multiple liability. | Julian: implicit challenge to necessity. | Held: Interpleader appropriate for the 300M shares; not appropriate (on current record) for the other previously issued shares because no concrete competing claim was pleaded. |
| Whether New York has personal jurisdiction over Julian under Rule 22 (CPLR §302) | Madison: Julian’s demand letter and threatened litigation purposefully availed him of NY and caused tortious injury in NY. | Julian: He lacks sufficient NY contacts; single letter insufficient; threats/ Florida litigation do not create NY tort situs. | Held: No specific personal jurisdiction under NY long‑arm statute; Rule 22 action would require dismissal of Julian. |
| Whether statutory interpleader under 28 U.S.C. §1335 is available and effects personal jurisdiction and venue | Madison: statutory interpleader would allow deposit/bond and nationwide service; asks court to proceed without deposit (argues impractical). | Julian: challenges venue in EDNY and personal jurisdiction only if Madison relies on Rule 22. | Held: Statutory interpleader is available but mandatory deposit or bond is required for jurisdiction; nationwide service under §2361 establishes personal jurisdiction over Julian; Madison must post deposit/bond by deadline and show venue is proper or proceed under Rule 22 (with Julian dismissed). |
Key Cases Cited
- Great Wall de Venezuela C.A. v. Interaudi Bank, 117 F.3d 474 (S.D.N.Y. 2015) (interpleader protects stakeholder from multiple liability and has two‑stage analysis)
- Washington Elec. Coop., Inc. v. Paterson, Walke & Pratt, P.C., 985 F.2d 677 (2d Cir. 1993) (interpleader rooted in equity to avoid multiple liability)
- Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (U.S. 1984) (distinction between general and specific personal jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (purposeful availment and due process in specific jurisdiction analysis)
- Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50 (2d Cir. 2012) (New York long‑arm and the transactional test under CPLR §302(a)(1))
- Penguin Group (USA) Inc. v. Am. Buddha, 609 F.3d 30 (2d Cir. 2010) (New York long‑arm tort test under §302(a)(3))
- Tashire, State Farm Fire & Casualty Co. v., 386 U.S. 523 (U.S. 1967) (statutory interpleader permits nationwide service under §2361)
- Metal Transp. Corp. v. Pacific Venture S.S. Corp., 288 F.2d 363 (2d Cir. 1961) (deposit/bond requirement is jurisdictional for statutory interpleader)