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.
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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