“At bottom, interpleader is an equitable 19 mechanism, and courts should not hesitate to ‘eliminat[e] those technical restraints on the device 20 that are not founded on adequate policy considerations.’”
How later courts described this case
- “At bottom, interpleader is an equitable 19 mechanism, and courts should not hesitate to ‘eliminat[e] those technical restraints on the device 20 that are not founded on adequate policy considerations.’”
Written by the judges who cited it.
The opinion
1
2
3 UNITED STATES DISTRICT COURT
4 NORTHERN DISTRICT OF CALIFORNIA
5 SAN JOSE DIVISION
6
7 THE BOARD OF TRUSTEES OF THE Case No. 13-cv-04383-BLF
LELAND STANFORD JUNIOR
8 UNIVERSITY,
ORDER GRANTING MOTION FOR
9 Plaintiff, AN ORDER RELEASING AND
DISCHARGING STANFORD FROM
10 v. LIABILITY; AND RESTRAINING
EACH DEFENDANT FROM
11 CHIANG FANG CHI-YI, et al., INSTITUTING ACTION AGAINST
STANFORD FOR RECOVERY OF
12 Defendants. DEPOSIT
13 [Re: ECF No. 332]
14
15 The present interpleader action stems from the diaries and other writings of Chiang Kai-
16 shek and Chiang Ching-kuo (the “Deposit”), currently housed at the Hoover Institution at Stanford
17 University (“Stanford”). In September 2013, Stanford came before this Court seeking interpleader
18 relief to resolve the conflicting claims of ownership to the Deposit that Stanford had received and
19 to release it from liability for said claims. Now, Stanford moves for an order effectuating the
20 interpleader protections it requested (the “Motion”), as well as partial judgment pursuant to Rule
21 54(b). For the foregoing reasons, Stanford’s Motion is GRANTED.
22 I. BACKGROUND
23 A. Factual Background
24 The Deposit consists of personal diaries, letters, and other papers created by Chiang Kai-
25 shek and Chiang Ching-kuo, the two most prominent leaders of the Republic of China (Taiwan) in
26 the 20th century. TAC ¶¶ 11-15. These papers are currently on loan to the Hoover Institution at
27 Stanford, where they are maintained under strict archival conditions with controlled light
1 ¶¶ 25-36. Since receiving physical custody of the Deposit around December 2004, Stanford has
2 received or learned of multiple claims of ownership to the Deposit from each of the Defendants
3 and, despite expending significant efforts to resolve the disputes, Stanford has not been able to
4 determine to whom the Deposit should be delivered. TAC ¶¶ 43-48.
5 B. Procedural History
6 Nearly nine years ago, Stanford filed its initial Complaint in Interpleader on September 20,
7 2013. ECF No. 1. Since then, Stanford has amended the complaint three times to add new parties
8 who alleged ownership over the contents of the Deposit, including additional heirs and Academia
9 Historica (“AH”), an instrumentality of the Republic of China and its “highest-level organization
10 tasked with affairs relating to the nation’s history.” TAC ¶ 31; ECF Nos. 29, 52, 152; see also
11 Mot. 2. Defendants have filed their answers and asserted cross claims against other parties,
12 though none were against Stanford. ECF Nos. 34, 58, 59, 63, 65; see also Mot. 4 n.1.
13 Shortly after Stanford filed its initial Complaint, it also filed an Ex Parte Application to
14 Retain Deposit of Res through the pendency of the litigation in lieu of depositing the materials
15 with the Court, citing the fragility of the contents and sheer volume of materials. ECF No. 12.
16 The Court granted Stanford’s request on October 8, 2013, and Stanford has since maintained the
17 res on behalf of the Court.
18 On September 2, 2015, the Court ordered this action be stayed pending the filing of a
19 lawsuit in Taiwan to determine ownership of the Deposit. ECF No. 122, at 19. The stay has since
20 remained in place with limited exceptions to add parties, withdraw counsel, conduct an inventory
21 of the Deposit’s contents, as well as Stanford’s filing of the instant motion. See Mot. 6-7 n.3-5.
22 Most recently, on August 17, 2022, AH informed the Court that the Taiwan intermediate
23 appellate court affirmed the trial court’s judgment, and the time to appeal that decision had run.
24 ECF No. 341. Accordingly, the proceedings were concluded and the Taiwan judgment final. On
25 August 18, 2022, the Court lifted the stay in this action for all purposes. ECF No. 344.
26 II. LEGAL STANDARD
27 In an interpleader action, the “stakeholder” of a disputed property “sues all those who
1 litigate who is entitled to the money.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1265 (9th
2 Cir. 1992). Procedurally, an interpleader action typically involves two stages. “First, the court
3 determines the propriety of interpleading the adverse claimants and relieving the stakeholder from
4 liability. The second stage involves an adjudication of the adverse claims of the defendant
5 claimants.” Metro. Life Ins. Co. v. Billini, 2007 WL 4209405, at *2 (E.D. Cal. Nov. 27, 2007).
6 “To determine the complaint’s appropriateness, the Court must determine whether it has
7 jurisdiction and whether there is a legitimate fear of multiple litigation.” Great Am. Life Ins. Co.
8 v. Brown-Kingston, 2019 WL 8137717, at *2 (E.D. Cal. May 14, 2019); see 28 U.S.C. § 1335.
9 Once a court has determined that the interpleader action is appropriate and the disputed
10 property has been deposited with the court, “a court should readily discharge a stakeholder absent
11 bad faith or delay by the stakeholder.” Metro. Life Ins., 2007 WL 4209405, at *2. The Court may
12 also “enter its order restraining [all claimants] from instituting or prosecuting any proceeding in
13 any State or United States court affecting the property . . . involved in the interpleader action” and
14 “discharge the plaintiff from further liability.” 28 U.S.C. § 2361; see also In re 1563 28th Ave.,
15 San Francisco, CA 94112, 333 F.R.D. 630, 635 (N.D. Cal. 2019).
16 III. DISCUSSION
17 The propriety of this interpleader action is undisputed. To the extent AH’s response
18 opposed Stanford’s Motion in part (ECF No. 334), none of AH’s arguments or concerns disputed
19 the Court’s interpleader jurisdiction in this action. That said, the Court briefly addresses the
20 jurisdictional requirements for interpleader.
21 A. Interpleader
22 i. Subject Matter Jurisdiction
23 Pursuant to 28 U.S.C. § 1335, a federal court generally has jurisdiction over a “statutory
24 interpleader” claim if five requirements are met:
25 First, a “stake” or “res” must exist that is under the control of the person bringing
the lawsuit so as to be deliverable to the registry of the court. The “stake” must be
26 valued at $500 or more. Second, the plaintiff must establish that two or more
adverse claimants . . . are claiming or may claim entitlement to the stake. Third,
27 the claims must be adverse to and independent of one another. Fourth, minimal
must exist. Finally, venue must be proper.
1
Nevada ex rel. Colorado River Comm'n of Nevada v. Pioneer Companies, Inc., 245 F. Supp. 2d
2
1120, 1125 (D. Nev. 2003) (internal citations and quotation marks omitted). Here, Stanford has
3
alleged the requisite facts unopposed and taken the necessary actions to satisfy the federal
4
statutory interpleader requirements. Mot. 14-17.
5
There is no dispute that a res exists under Stanford’s control, consisting of 59 boxes of
6
handwritten and autographed materials from Chiang Kai-shek and Chiang Ching-kuo. Wakin
7
Decl. ¶¶ 5, 19-20. Although ascertaining the specific monetary value of the Deposit may be
8
impossible given the items’ historical and cultural significance, the Court has no issue finding that
9
the value exceeds the jurisdictional $500 threshold. See id. ¶¶ 17-19. Although the Deposit is
10
physically in Stanford’s possession at the Hoover Institution and Stanford is willing to deposit the
11
Deposit with the Clerk of the Court (Wakin Decl. ¶¶ 23-42), the Court has ordered Stanford to
12
retain possession of the Deposit and maintain its contents under current archival conditions. ECF
13
No. 13, Oct. 8, 2013; see also Mot. 16 (“[W]hile the Deposit is physically in Stanford’s
14
possession, Stanford is effectively holding the Deposit in trust for the Court at the Court’s
15
request.”). Given the exceptional circumstances here, the fragile nature of the Deposit, and
16
Stanford’s commitment to complying with the Court’s future orders regarding the Deposit, the
17
Court finds that its jurisdiction is secure with respect to 28 U.S.C. § 1335(a)(2). See also Hudson
18
Sav. Bank v. Austin, 479 F.3d 102, 107 (1st Cir. 2007) (“At bottom, interpleader is an equitable
19
mechanism, and courts should not hesitate to ‘eliminat[e] those technical restraints on the device
20
that are not founded on adequate policy considerations.’”).
21
Regarding the second and third requirements listed above, the TAC alleged that Stanford
22
had “received or learned of claims of ownership to the Deposit, or parts of it, from each of the
23
Defendants.” TAC ¶ 44, 47. These fears of competing claims were borne out by Defendants’
24
answers to Stanford’s Second Amended Complaint, in which they each claimed some rightful
25
ownership over the Deposit. See, e.g., ECF No. 65, at 8-9; ECF No. 68 ¶ 21; ECF No. 69 ¶ 21.
26
The Court is satisfied that the jurisdictional requirement of adverse claims is met.
27
Minimal diversity is also satisfied in this case. The claimant Defendants include residents
1 of California, New York, the United Kingdom, Taiwan, and Hong Kong (a Special Administrative
2 Region of the People’s Republic of China). TAC ¶¶ 21-36; 28 U.S.C. § 1335(a)(1).
3 With respect to the venue requirement, venue is proper for an interpleader action in any
4 “judicial district in which one or more of the claimants reside.” 28 U.S.C. § 1397. The TAC
5 alleges that Defendant Chiang Hsiao-chang is a resident of this district, TAC ¶ 41; therefore,
6 venue is proper in the Northern District of California.
7 Because Stanford has made the requisite showing and no Defendant has opposed
8 Stanford’s motion or the Court’s jurisdiction, the Court finds that interpleader is proper.
9 ii. Relief to Stanford
10 “Once the court determines that an interpleader is proper, it may discharge the stakeholder
11 from further liability.” Great Am. Life Ins., 2019 WL 8137717, at *2; see also 28 U.S.C. § 2361.
12 The Court finds that Stanford has filed this interpleader in good faith and with
13 consideration for the Deposit’s contents. Stanford has made no ownership claim over the Deposit
14 and taken no position as to the rightful ownership of the Deposit. TAC ¶ 48; Mot. 1. Following
15 the Court’s discussion with the parties on August 18, 2022, there is no opposition to Stanford’s
16 request. Accordingly, the Court GRANTS the Motion pursuant to 28 U.S.C. § 2361 to release and
17 discharge Stanford from any liability for the claims each Defendant may have in the Deposit and
18 to enjoin all Defendants from instituting any action against Stanford for recovery of the Deposit.
19 B. Rule 54(b) Partial Judgment
20 During the Court’s discussion on August 18, 2022, Stanford also requested that the Court
21 enter partial judgment as to Stanford under Federal Rule of Civil Procedure 54(b).
22 The Court may direct entry of a final judgment as to one or more, but fewer than all,
23 parties if there is no just reason for delay. Fed. R. Civ. P. 54(b). This power is largely
24 discretionary, to be exercised “in light of ‘judicial administrative interests as well as the equities
25 involved,’ and giving due weight to ‘the historic federal policy against piecemeal appeals.’”
26 Reiter v. Cooper, 507 U.S. 258, 265 (1993) (internal citation and quotation marks omitted).
27 Rule 54(b) is applicable to this interpleader action. Following the Court’s finding that
1 Defendants may have in the Deposit, there is nothing left for the Court to resolve with respect to
2 Stanford while the remaining Defendants litigate amongst themselves to determine their respective
3 interests in the Deposit. See, e.g., Great Am. Life Ins., 2019 WL 8137717, at *3 (finding no just
4 || reason to delay entry of final judgment after stakeholder plaintiff discharged from liability and
5 || claimants enjoined from pursuing suit against stakeholder); Transamerica Life Ins. Co. v. Est. of
6 Ward, 2011 WL 5241257, at *5 (E.D. Cal. Oct. 31, 2011) (noting that entering partial judgment is
7 a “key first step in providing [stakeholder] with the certainty and finality that judgment in an
8 || interpleader is intended to provide”). Accordingly, the Court determines that there is no just
9 || reason for delay and directs entry of final judgment with respect to Stanford.
10 || IV. ORDER
11 For the foregoing reasons, IT IS HEREBY ORDERED that Stanford’s Motion is
12 GRANTED, as follows:
5 13 1. Stanford is RELEASED and DISCHARGED from any and all liability on account
14 of the claims each Defendant may have in the Deposit, or any and all parts thereof;
3 15 2. Each Defendant is RESTRAINED from instituting any action against Stanford for
16 recovery of the Deposit;
3 17 3. Stanford shall continue to maintain possession of the Deposit on behalf of this
18 Court, in conditions substantially similar to those in which it currently maintains
19 the Deposit, for the pendency of this litigation, or until further Order of this Court;
20 4. The Court shall retain jurisdiction with regard to Stanford’s maintenance of
21 possession of the Deposit on behalf of this Court and the ultimate disposition of
22 portions or all of the Deposit as may be ordered by the Court; and
23 5. There being no just reason for delay, final judgment pursuant to Federal Rule of
24 Civil Procedure 54(b) is therefore DIRECTED as to Stanford.
25
26 || Dated: August 22, 2022
27 hem Lh homer
BETH LABSON FREEMAN
28 United States District Judge