What is interpleader?

• A. It allows a plaintiff to join multiple defendants
• B. Interpleader allows a property holder to initiate a suit to compel multiple claimants to litigate the dispute
• C. It transfers property to the court
• D. It allows a plaintiff to sue a third party for damages

Answer: (B)

Interpleader is a procedural device used when a person or entity holding property or money is faced with competing claims from multiple people. The holder (the stakeholder) files a suit to force those claimants to litigate their rights in one action, with the property deposited into the court. The court then determines who is entitled to the property, relieving the stakeholder from the risk of multiple or conflicting judgments. The key idea is to consolidate competing claims into a single proceeding rather than letting several separate lawsuits proceed.