PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 20-1246

AMGUARD INSURANCE COMPANY,

Plaintiff - Appellant,

v.

SG PATEL AND SONS II LLC; STEVEN RENEW, individually as parent of 

Matthew Renew and as personal representative of the Estate of Matthew Renew; 

STEPHANIE RENEW, individually and as parent of Matthew Renew and as 

personal representative of the Estate of Matthew Renew; LUKE PICKERING; 

BRITTIN RAY; MICHAEL A. EDWARDS; BRIAN GIBSON; JOHN DOES 1-50; 

JOHN DOES INC 1 - 50; JOHN DOES LLC 1-50,

Defendants - Appellees.

Appeal from the United States District Court for the District of South Carolina, at

Orangeburg. J. Michelle Childs, District Judge. (5:19-cv-00635-JMC)

Argued: May 6, 2021 Decided: June 7, 2021

Before NIEMEYER, FLOYD, and RUSHING, Circuit Judges.

Reversed and remanded by published opinion. Judge Niemeyer wrote the opinion, in 

which Judge Floyd and Judge Rushing joined.

ARGUED: Crystal L. Maluchnik, JANIK L.L.P., Hilton Head Island, South Carolina, for 

Appellant. Justin Tyler Bamberg, BAMBERG LEGAL, Bamberg, South Carolina, for 

Appellees. ON BRIEF: Steven G. Janik, JANIK L.L.P., Hilton Head Island, South 

Carolina, for Appellant. J. Martin Harvey, Barnwell, South Carolina, for Appellees.
2

NIEMEYER, Circuit Judge:

This appeal presents the question of whether the district court had subject matter 

jurisdiction over an interpleader action commenced by a liability insurance company, 

whose policy was exposed to conflicting and excess claims. 

Facing numerous claims made against its insured — a convenience store — that 

exceeded the policy limits, AmGuard Insurance Company, a Pennsylvania corporation 

with its principal place of business in Pennsylvania, commenced this action in the nature 

of an interpleader and for a declaratory judgment against its insured and the claimants to 

the proceeds of its policy, all of whom were South Carolina citizens. For the interpleader

claim, AmGuard relied on 28 U.S.C. § 1335 (statutory interpleader), and for its declaratory 

judgment claim, it relied on 28 U.S.C. § 2201 (creating the declaratory judgment remedy) 

and 28 U.S.C. § 1332 (establishing diversity jurisdiction). Sua sponte, the district court 

dismissed the action for lack of subject matter jurisdiction on the ground that no diversity 

of citizenship existed among the claimants to the AmGuard policy, as required by § 1335(a) 

(providing jurisdiction in interpleader actions when “[t]wo or more adverse claimants, of 

diverse citizenship[,] . . . may claim to be entitled to [a policy’s proceeds]”). The court did 

not address AmGuard’s request for a declaratory judgment and dismissed the action in its 

entirety.

Because AmGuard disputed the amount that the claimants maintained was available 

under AmGuard’s policy, having acknowledged coverage for only a lesser amount, we 

conclude that it was a “claimant” adverse to the other claimants to the proceeds of the 

policy, and accordingly, the diverse citizenship between AmGuard and the South Carolina 
3

claimants provided the district court with the minimal diversity needed for jurisdiction 

under § 1335. We therefore reverse and remand for further proceedings.

I

On Friday evening, July 13, 2018, one of a group of five underage teenagers 

purchased beer at the “Quick & Easy” convenience store in Barnwell County, South 

Carolina, which was owned by SG Patel and Sons II LLC, and the five began drinking the 

beer on the premises. Later that evening — in the early morning hours of July 14 — the

five were in a car that was being driven by one of them who was under 18, “severely 

intoxicated,” and driving too fast. Unable to negotiate a bend in the road, the driver crashed 

into a concrete loading dock, killing one passenger and severely injuring the other four 

occupants. The five occupants (the deceased through his estate) made claims against the 

convenience store and AmGuard, its insurer, asserting that the convenience store was liable 

for their injuries in selling beer to an underaged person. They claimed that their damages 

far exceeded the policy limits of the AmGuard liability insurance policy issued to the 

convenience store.

By a letter to AmGuard dated February 14, 2019, the five claimants sought to lay 

the foundation for a bad-faith claim against the insurance company, as recognized in Tyger 

River Pine Co. v. Maryland Casualty Co., 170 S.E. 346, 348 (S.C. 1933) (recognizing a 

bad-faith claim against an insurance company for damages in excess of policy limits). The 

letter demanded that AmGuard settle with the five claimants for $3 million — the amount 

they claimed was payable under AmGuard’s policy — and stated that the offer would be
4

“immediately and irrevocably withdrawn” after five days. The letter also warned that after 

the offer was withdrawn, the claimants would file suit seeking damages against the 

convenience store “in excess of the available policy limits.” The letter noted that in a 

neighboring county, a jury had recently returned a verdict of over $25 million against a 

convenience store that had sold beer to minors, resulting in an accident. 

The policy that AmGuard issued to Patel had liability limits of $1 million for each 

occurrence and $2 million in the general aggregate for all occurrences, and liquor liability 

limits of $500,000 for each common cause and $1 million in the aggregate. The policy

provided that the $500,000 figure was “the most [AmGuard] [would] pay for all ‘bodily 

injury’ and ‘property damage’ sustained by one or more persons or organizations as the 

result of the selling, serving or furnishing of alcoholic beverages to any one person.” 

Following receipt of the claimants’ letter, AmGuard took the position that the

$500,000 liquor liability limit applied and was the maximum for which it could be liable 

under the policy. Accordingly, it commenced this action against Patel and the five 

claimants for a declaratory judgment to resolve the dispute over policy limits, for 

interpleader to have the court distribute the policy limits among the five claimants, and for 

an injunction protecting it from further claims with respect to the occurrence. In particular, 

the complaint sought a declaratory judgment under 28 U.S.C. § 2201, requesting the court 

to “declare the rights and legal relations of the Parties to . . . these proceedings” and 

asserting that AmGuard provided coverage of only $500,000 under the liquor liability limit. 

It also sought interpleader under 28 U.S.C. § 1335, requesting an order authorizing

AmGuard to deposit $500,000 into the registry of the court and post a bond for the
5

additional $2.5 million in dispute, bringing the total to $3 million, “which is the maximum 

sum sought by Defendants in connection with the Accident.” Finally, the complaint sought 

court orders requiring the defendants to interplead with respect to the deposited sum and, 

pursuant to 28 U.S.C. § 2361, restraining the defendants from instituting or prosecuting 

any other proceeding against AmGuard “in any State or United States court affecting the 

Policy’s proceeds, obligations and/or issues involved in this interpleader action.”

In alleging jurisdiction, the complaint asserted that AmGuard was a corporation 

organized under the laws of Pennsylvania with its principal place of business in 

Pennsylvania; that Patel was a limited liability company organized under the laws of South 

Carolina with its principal place of business in South Carolina; that the five claimants were 

citizens and residents of South Carolina; and that the amount in controversy exceeded 

$75,000. On those allegations, it alleged that the court had subject matter jurisdiction to 

grant a declaratory judgment pursuant to the complete diversity of citizenship required 

under § 1332 and that the court had jurisdiction to order the interpleader pursuant to § 1335, 

which requires only minimal diversity of citizenship among at least two “adverse 

claimants.” 

The defendants filed answers to the complaint and, at the same time, motions to 

dismiss pursuant to Rules 12(b)(1) and 12(h). In their motions, they contended that because 

the claimants withdrew their “time-sensitive Tyger River settlement demand,” the action 

was “either moot or not currently ripe for adjudication.” They argued that “[b]ecause the 

settlement demand about which AmGuard brings this action is no longer active, and the 

question of coverage in the policy is entirely dependent on the factual averments in the now 
6

non-existent demand — and in turn a non-existent Complaint for the underlying accident 

— there is no longer a justiciable case or controversy before the Court and it should dismiss 

AmGuard’s action.” The defendants did not otherwise dispute the allegations of subject 

matter jurisdiction contained in AmGuard’s complaint. 

AmGuard opposed the defendants’ motion to dismiss and filed its own motion for 

summary judgment for a declaratory judgment and interpleader.

The district court conducted a hearing on the pending motions, during which the 

defendants reiterated that “the matter is moot.” They maintained that “[w]ithout there 

being an offer on the table, there’s no basis for [AmGuard’s] [declaratory judgment] and 

interpleader at this point in time, . . . [which] divests this Court of jurisdiction over this 

matter.” AmGuard argued, however, that the continuing dispute over the policy’s limits 

presented an actual case or controversy and therefore that the case was not moot. As it 

explained to the court, “[t]hey think it’s 3 million [dollars]. We think it’s a half million. 

But we’re here to pay the limits as the Court orders from that standpoint.” AmGuard also

argued that the interpleader statute established jurisdiction, authorizing an action against 

claimants that “may claim to be entitled to such money” from an insurance policy. 28 

U.S.C. § 1335(a)(1) (emphasis added). During the dialogue with the court about the 

depositing of money, AmGuard stated that the action was “not a Rule 22 interpleader, . . .

because the filing of the original complaint was under 28 U.S.C. § 1335,” which requires 

a deposit of money or a bond. And with respect to § 1335, it asserted that there was

“minimal diversity” as required by that section.
7

The district court thereafter issued an opinion and order dismissing the case for lack 

of subject matter jurisdiction. In doing so, it relied on grounds not previously raised by 

any party. It stated that § 1335 jurisdiction requires “[t]wo or more adverse claimants, of 

diverse citizenship,” which was not satisfied in this case because all the defendants with 

claims to the proceeds of the insurance policy were citizens of South Carolina. While the

court did acknowledge that the citizenship of AmGuard as “stakeholder” could create 

minimal diversity, that was so only when a stakeholder “is an interested stakeholder,”

(emphasis added). The court concluded that AmGuard had not asserted the necessary

interest. It acknowledged that because there was complete diversity between AmGuard 

and the defendants, it would have jurisdiction under 28 U.S.C. § 1332 to consider 

AmGuard’s request for relief under Rule 22 interpleader but that AmGuard had “expressly 

declined application of Rule 22 interpleader.” The court never addressed AmGuard’s 

separate request for a declaratory judgment based on diversity jurisdiction under § 1332.

From the district court’s final judgment dated February 28, 2020, dismissing the 

action, AmGuard filed this appeal.

II

For its main argument, AmGuard contends that the district court erred in dismissing 

its action for lack of subject matter jurisdiction under 28 U.S.C. § 1335. It argues that 

because it was an “interested stakeholder” in the interpleader action — disputing $2.5 

million of the $3 million coverage sought by the claimants — its own citizenship should 
8

have been “considered for purposes of establishing minimal diversity for statutory 

interpleader.” 

Resolving this issue calls for an involved analysis, but the discussion will be

facilitated by first addressing the interpleader procedure at a more general level. 

Interpleader has, in one form or another, been in existence for over 600 years. 7

Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and 

Procedure § 1701 (4th ed. 2019) [hereinafter Wright & Miller]. The classic circumstance 

that interpleader has addressed is where one party, a “stakeholder,” has money or other 

property that is claimed, or may be claimed, by two or more other parties, the “claimants,”

creating a risk of inconsistent claims to the property or judgments against the stakeholder 

that exceed the value of the property. See Texas v. Florida, 306 U.S. 398, 405–06 (1939). 

The interpleader procedure permits the stakeholder to join all claimants and efficiently 

resolve their claims to a corpus in “a single forum and proceeding.” State Farm Fire & 

Cas. Co. v. Tashire, 386 U.S. 523, 534 (1967); see also Wright & Miller, supra, § 1702. 

In its strict (or “pure” or “true”) form, therefore, the stakeholder has no interest in the 

money or property at issue but simply deposits the money or property with the court for 

distribution to the claimants. Stated otherwise, the stakeholder makes no claim to a part of 

the money or property for itself and is “indifferent” as to which claimant should receive 

the money or property. Killian v. Ebbinghaus, 110 U.S. 568, 571 (1884); see also Atkinson 

v. Manks & Holroyd, 1 Cow. 691, 703 (N.Y. 1823) (noting that in a strict interpleader 

action, “the complainant has no beneficial interest in the thing claimed”). Once the 

property is deposited in the court, the court directs the claimants to interplead among 
9

themselves for their portion, and the stakeholder is discharged. See 4 James Wm. Moore 

et al., Moore’s Federal Practice § 22.02[2] (3d ed. 2020) [hereinafter Moore’s].

By contrast, in an action in the nature of interpleader, the plaintiff is not merely a 

stakeholder but also has an interest in the money or property, and it may initially deny 

whether some or all of the property is owed to any or all claimants. See Texas, 306 U.S. at 

406–07; Killian, 110 U.S. at 572. If the court determines that at least some of the plaintiff’s

money or property is owed to the claimants, the claimants are then directed to interplead 

among themselves for the appropriate allocation of the money or property. See Lummis v. 

White, 629 F.2d 397, 400 (5th Cir. 1980), rev’d on other grounds sub nom. Cory v. White, 

457 U.S. 85 (1982).

Today, the interpleader procedure can be pursued in federal court under two 

different provisions, which differ somewhat in practice and benefit. Federal Rule of Civil 

Procedure 22 (“rule interpleader”) functions much like joinder rules and can be invoked

only when federal jurisdiction is otherwise established. See Leimbach v. Allen, 976 F.2d 

912, 916 (4th Cir. 1992). Typically, plaintiffs invoke rule interpleader under a court’s 

diversity jurisdiction, which requires complete diversity of citizenship between all 

plaintiffs and defendants and an amount in controversy exceeding $75,000. 28 U.S.C. 

§ 1332; see Moore’s, supra, § 22.04[2][a] (“The vast majority of rule interpleader cases 

invoke diversity of citizenship jurisdiction”). Alternatively, an interpleader action can be 

filed under 28 U.S.C. § 1335 (“statutory interpleader”). Such an action requires 

(1) minimal diversity between “[t]wo or more adverse claimants,” (2) a value of $500 or 

more in controversy, and (3) a deposit in court by the plaintiff of the amount in dispute or 
10

a bond. 28 U.S.C. § 1335(a). “Minimal” diversity means that at least two claimants are 

not co-citizens, even if others are. See Tashire, 386 U.S. at 530 (assessing diversity of 

citizenship “without regard to the circumstance that other rival claimants may be cocitizens”). 

Both rule interpleader and statutory interpleader share features that are relevant to 

this appeal. First, either method may be invoked not only when claimants have already

made a claim to the stakeholder’s property but also when the claimants may make such a 

claim in the future. See 28 U.S.C. § 1335(a)(1) (authorizing interpleader when “adverse 

claimants . . . are claiming or may claim to be entitled to such money or property” 

(emphasis added)); Fed. R. Civ. P. 22(a)(1) (“Persons with claims that may expose a 

plaintiff to double or multiple liability may be joined as defendants and required to 

interplead” (emphasis added)); Wright & Miller, supra, § 1707 (noting that Rule 22 

“[s]imilarly . . . embraces prospective claims”). Second, both rule interpleader and 

statutory interpleader recognize and incorporate the history of equitable interpleader 

described above, including the fundamental distinction between strict interpleader actions 

and actions in the nature of interpleader. See 28 U.S.C. § 1335 (“The district courts shall 

have original jurisdiction of any civil action of interpleader or in the nature of interpleader 

filed . . .”); Fed. R. Civ. P. 22(a)(1)(B) (clarifying that “interpleader is proper even though 

. . . the plaintiff denies liability in whole or in part to any or all of the claimants”); see also

Lummis, 629 F.2d at 400 (“Both remedies, strict bills of interpleader and bills in the nature 

of interpleader, were embodied in the Federal Interpleader Act of 1936 . . . and in the form 

of interpleader provided in 1938 by Rule 22” (citation omitted)).
11

But there are also important differences. Rule interpleader functions much like a 

joinder rule and provides no additional attributes of the kind available under statutory 

interpleader. Section 1335 contains a jurisdictional provision that relaxes the traditional 

diversity requirements of § 1332, and it authorizes the court to receive a deposit of the 

subject property or a bond. Also, 28 U.S.C. § 1397 provides liberalized venue for § 1335 

actions, and 28 U.S.C. § 2361 provides nationwide service of process. Section 2361 also 

explicitly authorizes the district court to discharge an interpleader plaintiff “from further 

liability” and to enforce its interpleader judgment with permanent injunctions and other 

orders.

With this background in hand, we turn to the question presented here — whether 

statutory interpleader’s requirement of minimal diversity among adverse claimants can be 

satisfied when the defendants named in the interpleader are citizens of the same State but 

the plaintiff that commenced the action is a citizen of a different State and alleges an 

interest in the property. Some courts have answered in the affirmative. See, e.g., Lummis, 

629 F.2d at 403; Mt. Hawley Ins. Co. v. Fed. Sav. & Loan Ins. Corp., 695 F. Supp. 469, 

473 (C.D. Cal. 1987). And others have answered in the negative. See, e.g., Am. Fam. Mut. 

Ins. Co. v. Roche, 830 F. Supp. 1241, 1246–49 (E.D. Wis. 1993); Travelers Ins. Co. v. 

Harville, 622 F. Supp. 68, 69 (S.D. Ala. 1985). We conclude that the better reasoned 

position is that an interpleader plaintiff’s citizenship may be considered to satisfy § 1335’s 

minimal diversity requirement when the action is in the nature of interpleader. 

First, in invoking diversity of citizenship to justify jurisdiction, § 1335 refers to 

§ 1332, where diverse citizenship is defined. See 28 U.S.C. § 1335(a)(1) (employing 
12

“diverse citizenship as defined in subsection (a) or (d) of section 1332”). And diversity 

jurisdiction under § 1332 implements the policy underlying Article III of the Constitution, 

which extends federal judicial power to “Controversies . . . between Citizens of different 

States.” U.S. Const. art. III, § 2, cl. 1. That constitutional provision in turn “entertains”

the “apprehensions” or “fears” of prejudice in state courts against citizens of other States. 

Bank of the U.S. v. Deveaux, 9 U.S. (5 Cranch) 61, 87 (1809) (Marshall, C.J.). This policy 

that underlies diversity of citizenship in judicial actions should thus underlie our analysis, 

recognizing that controversies involving citizens of different states may be litigated in 

federal courts to ensure the impartial administration of justice. And this policy thus informs 

our understanding of § 1335, which requires “two adverse parties [who] are not cocitizens.” Tashire, 386 U.S. at 531; see also Treinies v. Sunshine Mining Co., 308 U.S. 66, 

71 (1939) (noting that statutory interpleader “is based upon the clause of Section Two, 

Article III, of the Constitution, U.S.C.A., which extends judicial power of the United States 

to controversies ‘between citizens of different States’”). 

Second, § 1335 addresses both strict interpleader actions, in which the “plaintiff” is 

neutral and therefore a stakeholder with no interest in the corpus at issue, and actions in 

the nature of interpleader, in which the “plaintiff” claims an interest in all or part of the 

corpus. The statute never uses the word “stakeholder.” Rather, it uses the term “plaintiff,” 

which anticipates the distinct roles that a plaintiff may assume. Thus, when an interpleader 

plaintiff claims no interest in the corpus, it functions in the traditional role of stakeholder, 

much like “a person entrusted with the stakes of bettors.” Merriam-Webster’s Collegiate 

Dictionary 1214 (11th ed. 2020) (defining “stakeholder”). But when the plaintiff claims 
13

an interest in all or part of the corpus — as is the case in an action in the nature of 

interpleader — it stands in conflict or “controversy” with the other claimants to the corpus 

such that the plaintiff and the defendant-claimants are adverse. In this role, the plaintiff 

stands as a claimant vis-à-vis the corpus just as does every other claimant. 

Finally, when the plaintiff in the role of claimant has a citizenship different from 

another adverse claimant, that diversity justifies federal jurisdiction. In that circumstance, 

the “apprehension” or “fear” of an out-of-state citizen that may be attendant to state court 

proceedings is implicated, as the diversity-of-citizenship policy embodies. Thus, when 

§ 1335 confers jurisdiction on federal courts for controversies among “adverse claimants,

of diverse citizenship,” the term “adverse claimants” includes a plaintiff who has an interest 

in the corpus, making its interest adverse to the other claimants. 

Our interpretation of § 1335 comports with the Supreme Court’s description. The 

Court has explained that an interpleader plaintiff’s citizenship does not matter when it is a 

disinterested stakeholder. See Treinies, 308 U.S. at 72 (emphasizing that in a strict 

interpleader action, the plaintiff’s citizenship is irrelevant because its “deposit and 

discharge effectually demonstrates [its] disinterestedness as between the claimants and as 

to the property in dispute”). But this conclusion also suggests its corollary — that an 

interested plaintiff’s citizenship is relevant, as the plaintiff is not disinterested in the money 

or property deposited with the court. 

Moreover, the Supreme Court has emphasized that interpleader is “remedial and to 

be liberally construed,” Tashire, 386 U.S. at 533, to “remedy the problems posed by 

multiple claimants to a single fund,” id. at 530; see also Texas, 306 U.S. at 405–07 
14

(defining interpleader’s purpose over centuries as “avoidance of the risk of loss ensuing 

from the demands in separate suits of rival claimants to the same debt or legal duty”). That 

purpose is certainly furthered by considering an interpleader plaintiff’s citizenship in an 

action in the nature of interpleader where the plaintiff would face rivalrous claims to the 

property and those claims would have “interstate aspects,” i.e., diversity of citizenship, 

suited to federal court. 13F Wright & Miller, supra, § 3636 (3d ed. 2009).

Those courts that have reached the opposite conclusion have done so primarily 

based on the assumed textual distinction in § 1335 between claimants and stakeholders. 

See Roche, 830 F. Supp. at 1248. This reading, however, ignores the long-held distinction 

between strict interpleader actions and actions in the nature of interpleader, which § 1335 

explicitly recognizes. And more particularly, it fails to recognize that in an action in the 

nature of interpleader, the plaintiff is a claimant in the action and its position is adverse to 

at least one other claimant. See Moore’s, supra, § 22.04[2][b] (“[I]n essence, the 

stakeholder is in fact a claimant”). Importantly, these cases overlook that the interpleader 

statute never uses the term “stakeholder” and does not otherwise exclude the possibility 

that the plaintiff that filed the interpleader action may simultaneously claim an interest in 

the property. But even if a court labels the plaintiff, regardless of its role, as a stakeholder, 

it must recognize that while some stakeholders are disinterested in the corpus, others do

have an interest and thus are also claimants.

In this case, AmGuard did not simply seek, as a disinterested party, to distribute to 

claimants the proceeds of its insurance policy. Rather, it sought to deny its liability for 

paying the majority of the funds claimed by the defendants. Cf. Robert E. Keeton, 
15

Preferential Settlement of Liability-Insurance Claims, 70 Harv. L. Rev. 27, 40 (1956) 

(noting that “since the [insurance] company is usually contesting the liability of the insured 

to the claimants, it is not a disinterested stakeholder”). Accordingly, AmGuard is a 

claimant, and its diverse citizenship from other claimants gave the district court jurisdiction 

under § 1335.

We therefore reverse the judgment of the district court rejecting the minimal 

diversity jurisdiction of § 1335 in the circumstances of this case and remand for further 

proceedings.

III

In its complaint, AmGuard also invoked 28 U.S.C. § 1332 (diversity jurisdiction) to 

justify the district court’s jurisdiction over the case. As AmGuard alleged, it was a citizen 

of Pennsylvania, the defendants were citizens of South Carolina, and the amount in 

controversy exceeded $75,000. The district court, however, never addressed this basis for 

jurisdiction and therefore erred.

To be sure, AmGuard invoked jurisdiction under both § 1332 and § 1335, relying 

on § 1332 to justify its declaratory judgment claim and § 1335 for its interpleader claim. 

But even after rejecting AmGuard’s § 1335 invocation of jurisdiction, the district court 

could have relied on jurisdiction under § 1332 and applied Rule 22 to address AmGuard’s 

interpleader request. A district court may consider a request for interpleader under either

method of interpleader — Rule 22 or § 1335 — “even if the complaint asserts the wrong 

one, so long as the complaint can be construed to confer jurisdiction under one or the 
16

other.” Moore’s, supra, § 22.04[1]. But the district court here refused to do so because it 

understood AmGuard as having “expressly declined application of Rule 22 interpleader” 

during the course of the motions hearing. 

At the hearing, AmGuard stated that “[i]t’s not a Rule 22 interpleader” but instead 

that the action had been filed under the interpleader statute. That statement, however, was 

made in the context of AmGuard explaining why it sought to deposit funds with the court, 

which was required for statutory interpleader but not for rule interpleader. See 28 U.S.C. 

§ 1335(a)(2). Thus, when read in context, AmGuard’s statement should not have been 

taken to foreclose any reliance on Rule 22 if the court were to determine that statutory 

interpleader was unavailable. After all, the district court provided no notice to AmGuard 

that it was concerned about statutory interpleader’s diversity requirement at the time of the 

hearing. But even if that subject had been discussed at the hearing, the court would still 

have had discretion to consider Rule 22 interpleader. See Truck-A-Tune, Inc. v. Ré, 23 F.3d 

60, 62 (2d Cir. 1994). In these circumstances, we conclude that the district court abused 

its discretion in failing to consider application of Rule 22 after it dismissed the statutory 

interpleader claim without notice to the parties. See Frey v. EPA, 270 F.3d 1129, 1132 (7th 

Cir. 2001) (observing that “sua sponte dismissals without prior notice or opportunity to be 

heard are hazardous” (cleaned up)).

In this same vein, § 1332 also provided the district court with jurisdiction to resolve 

AmGuard’s declaratory judgment claim, yet the court dismissed the entire action without 

addressing why it did not have jurisdiction under § 1332. This error too requires reversal.
17

IV

The defendants neither defend nor dispute the grounds for dismissal relied on by the 

district court. Rather, in a two-and-one-half-page appellate brief, they argue simply that 

because they withdrew their Tyger River letter and had not filed any other lawsuits based 

on Patel’s sale of beer to the underaged defendants, this action is moot, and therefore this 

court lacks jurisdiction to decide the case under Article III, citing Simon v. E. Ky. Welfare 

Rts. Org., 426 U.S. 26, 37 (1976). At oral argument, however, the defendants declined to 

foreswear any future action for damages against Patel and AmGuard.

AmGuard contends in response that there still is a justiciable controversy between 

the parties to determine the extent of its liability to the defendants. We agree. 

To begin, the interpleader statute confers jurisdiction on a district court so long as 

the claimants “may claim to be entitled to such money or property . . . arising by virtue of 

any . . . policy.” 28 U.S.C. § 1335(a)(1) (emphasis added). Based on this language, the 

Supreme Court has consistently held that “to bring an interpleader suit, ‘a plaintiff need 

not await actual institution of independent suits,’” as the defendants now insist. California 

v. Texas, 457 U.S. 164, 166 n.1 (1982) (per curiam) (emphasis added) (cleaned up) (quoting 

Texas, 306 U.S. at 406). Rather, to satisfy the requirement of a justiciable case, “it is 

enough if [the plaintiff] shows that conflicting claims are asserted and that the consequent 

risk of loss is substantial.” Id. (quoting Texas, 306 U.S. at 406). In other words, an 

interpleader plaintiff need only “possess[] a bona fide fear of adverse claims” to the 

property to file an interpleader action. Lexington Ins. Co. v. Jacobs Indus. Maint. Co., 435 

F. App’x 144, 147–48 (3d Cir. 2011) (emphasizing that “a formal claim against the policy 
18

or suit by [a claimant] was not required”); see also CNA Ins. Co. v. Waters, 926 F.2d 247, 

251 (3d Cir. 1991). 

This is the uniform approach taken in authoritative treatises and by all other courts 

of appeals. See 7 Wright & Miller, supra, § 1707; Moore’s, supra, § 22.03[1][e] (“The 

stakeholder has a right to bring an interpleader case even if some or all of the claims against 

the stake are prospective”); see also, e.g., N.Y. Life Ins. Co. v. Sahani, 730 F. App’x 45, 50 

(2d Cir. 2018); Auto Parts Mfg. Miss., Inc. v. King Constr. of Hous., LLC, 782 F.3d 186, 

194 (5th Cir. 2015) (“Even the mere threat of multiple vexation by future litigation provides 

sufficient basis for interpleader. Statutory interpleader under § 1335 is especially liberal, 

permitting a valid interpleader action if two claimants may claim to be entitled to the 

interpleader funds, even if there is not yet a claim” (cleaned up)); Michelman v. Lincoln 

Nat’l Life Ins. Co., 685 F.3d 887, 895 (9th Cir. 2012) (“[I]nterpleader extends to potential, 

as well as actual, claims” (cleaned up)); United States v. High Tech. Prods., Inc., 497 F.3d 

637, 642 (6th Cir. 2007) (“The primary test for determining the propriety of interpleading 

the adverse claimants and discharging the stakeholder . . . is whether the stakeholder 

legitimately fears multiple vexation directed against a single fund or property” (cleaned 

up)); Dakota Livestock Co. v. Keim, 522 F.2d 1302, 1308 (8th Cir. 1977) (“Although [the 

claimant] has not as yet asserted any liability on the part of [the plaintiff], he has not 

admitted that no such liability exists”).

Here, AmGuard’s complaint adequately alleged a bona fide fear of adverse claims

in describing its policy insuring Patel, in recognizing that Patel sold beer to an underaged 

person leading to a fatal automobile accident, and in noting the claimants’ Tyger River 
19

letter threatening claims in excess of policy limits. As is well settled, AmGuard “need not 

await actual institution of independent suits” against it or its insured before it may request 

a court to determine its liability. Texas, 306 U.S. at 406. It had a bona fide fear of adverse 

claims.

The district court was therefore not deprived of jurisdiction upon the defendants’

withdrawal of their time-sensitive demand letter. 

V

For the reasons given, we reverse the district court’s judgment and remand for 

further proceedings. And in conducting those proceedings, the court may conclude that 

major issues no longer need to be resolved, as the defendants in their appellate brief, which 

was signed by all defendants, expressly assured us that they “do not contest AmGuard’s 

assertion that its liability limits on its policy issued to Patel are $500,000.” (Emphasis 

added). Of course, resolution of this issue does not affect the district court’s jurisdiction, 

which is, in these circumstances, determined as of the time the complaint was filed. Nor 

does it foreclose resolution of the remaining issues and the need to follow procedures as 

specified under § 2201 and § 1335.

REVERSED AND REMANDED

FOR FURTHER PROCEEDINGS