Civil Procedure Keyed to Friedenthal
State Farm Fire & Cas. Co. v. Tashire
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An accident involving a Greyhound bus and a truck occurred in California. The accident resulted in one death and 33 injured persons. Four passengers filed suit in California against the bus driver (Nauta), Greyhound, the truck driver (Clark) and the owner of the truck (Glasgow) requesting damages in excess of $1,000,000. Clark’s insurer, State Farm, brought an interpleader action in federal court located in Oregon. State Farm alleged that it had a policy covering Clark that had a $20,000 limit. State Farm asked the court to order that all claimants establish their claims against Clark in that court alone and to discharge State Farm of all liability. State Farm joined Greyhound, Nauta, Clark and potential claimants as defendants. All defendants except for Greyhound, the claimants and State Farm were residents of Oregon. Jurisdiction was based on diversity and the Interpleader Act. A temporary restraining order was issued, and claimants filed for a change of venue to where the c ollision occurred. The TRO was expanded to require any actions against Nauta, Glasgow and Greyhound be instituted in the Oregon federal court. The claimants appealed and the Court of Appeals reversed. The Court of Appeals held that because Oregon state law does not allow direct actions against the insurer until the claim has been reduced to a judgment, the potential plaintiffs were not “claimants” and interpleader could not be maintained. State Farm appealed to the Supreme Court.
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