Civil Procedure Multistate Bar Practice Exam

What is the purpose of interpleader?

1. To avoid multiple liabilities against a stakeholder

2. To consolidate claims into one action

3. To bring in third parties for defense

4. To settle claims through mediation

The correct answer is: To avoid multiple liabilities against a stakeholder

The primary purpose of interpleader is to allow a stakeholder to avoid the risk of facing multiple liabilities due to conflicting claims from different parties over the same property or money. When there are multiple claimants asserting rights to the same thing, the stakeholder can initiate interpleader to have the court determine who is entitled to the property, thereby protecting the stakeholder from having to satisfy conflicting demands. This process ensures that the stakeholder can deposit the contested property with the court, thus relieving the stakeholder from responsibility for the outcome of the competing claims. In comparison, consolidating claims into one action, bringing in third parties for defense, or settling claims through mediation do not encapsulate the fundamental purpose of interpleader, which specifically centers on protecting the stakeholder from multiple liability rather than simply managing claims or facilitating resolution processes.