is suggesting, and the plaintiff herein admits, that state law
relative to the granting or denying of attorneys' fees should be
followed if the action is brought under the diversity statute,
28 U.S.C. § 1332 (see Republic of China v. Central Scientific Co.,
D.C., 20 F. Supp. 924), but, that if the action is initiated under
the interpleader statute, 28 U.S.C. § 1335, then we have a
federal matter and must apply federal law.
I seriously question Moore's major premise, that Section 1335
creates a new remedy where none was formerly available and that
as such it is distinguishable from the diversity section. As I
said in the Blood case, 69 F. Supp. at page 707, the Federal
Interpleader Statute (there I cited 28 U.S.C.A. Section 41(26)
which is the forerunner and in substance the same as the present
Section 1335), "* * * does not create a federal right but merely
extends the jurisdiction of the district courts in applying a
traditional equitable remedy." In support of this statement I
cited Danville Building Ass'n v. Gates, D.C., 66 F. Supp. 706,
wherein the late learned Judge Lindley, when confronted with the
same issue presently before me, denied the interpleading
stakeholder the right to attorneys' fees, this right not being
available in the courts of the State. Judge Lindley speaking of
an action brought under the provisions of the Federal
Interpleader Statute (he also cited the old statute, Title
28 U.S.C.A. Section 41(26)) unequivocally stated at page 709 of 66
F. Supp.: "We are not dealing with a federal right." And further:
"No federal question is involved." The Judge also said "* * * in
no case should the remedy granted by the federal court lead to a
substantially different result from that obtainable in the state
court." There clearly was no question in Judge Lindley's mind,
and there is none in mine but that an intervener's right to
receive attorneys' fees, or the absence of such a right, is a
matter of substantive law. Were this to be considered otherwise,
then the rights existing in the federal courts would differ
materially from those afforded in the state courts, the attendant
result being a manifest and unmistakable attenuation of the Erie
I firmly reiterate my opinion that it comports and is consonant
with fundamental legal principles to hold that the denying or
granting of attorneys' fees relates to the substantive rights of
an interpleader action. This being so, a fortiori, the Erie
doctrine precludes any discretion on behalf of the federal
courts; they must follow the law of the state. Moreover, were I
to assume even arguendo that the question of attorneys' fees was
merely procedural, still the federal courts, and I now quote from
Moore's treatise, "should" follow the state law where it, the
state law, "* * reflects a `substantive' policy relative to
non-conventional items of expense, such as attorney's fees."
Therefore, even assuming the issue to be procedural, the federal
courts under such circumstances "should" follow the state policy.
Further, where as here we are dealing with an equity action, it
would be much more equitable to grant or deny the same rights to
litigating parties in a particular area, whether the action be
brought in the federal or the state courts.
The Federal Interpleader Statute does not create a new remedy.
As I pointed out earlier this substantive right, or remedy if you
will, was available for centuries here and in England. As Judge
Lindley wrote in his masterful Danville decision, this right of a
stakeholder to interplead; "* * * is a part of the state's innate
equity jurisprudence." Not only is and has this right been
available in the state courts, but even absent the provisions of
Section 1335 this right is available in the federal courts,
either under the diversity section, 1332, or possibly under
Section 1331 should a federal question be involved. Section 1335
merely embraces an equitable right long enjoyed by stakeholders
by reducing the jurisdictional requirements necessary to properly
replace such an interpleader action before the federal courts.
How can it be said that this
extension of jurisdiction creates a new remedy?
The manifest purpose of the Erie decision was to insure to
litigants that the results obtainable in the federal courts would
not differ substantially from those available in the local state
courts. To now suggest that issues similar to this should be
subjected to a federal law belies and does violence to the
doctrine of Erie v. Tompkins and the purpose it was intended to
subserve. I will have to wait for the Supreme Court or the Court
of Appeals of my own Circuit to tell me that the Erie v. Tompkins
decision has been thus repudiated.
Plaintiff's motion for allowance of attorneys' fees is denied.
© 1992-2003 VersusLaw Inc.