## Facts

- Sunshine Mining Co., a Washington corporation, issued stock and owed dividends on approximately 30,598 shares claimed by competing groups.
- The disputed shares traced to community property of Amelia and John Pelkes in Washington; the shares were treated as valueless and not inventoried in Amelia’s 1922 estate administration.
- Washington claimants (including Evelyn H. Treinies) claimed through John Pelkes, asserting that Katherine Mason had relinquished any interest in the shares during an informal partition of the estate.
- Idaho claimants (including Katherine Mason) asserted Pelkes held roughly half the shares in trust for Mason and later breached that trust.
- A Washington probate court decree in administering Amelia’s estate adjudged the shares belonged to Pelkes.
- An Idaho court of general jurisdiction later entered a final decree awarding the same shares to Mason and determining the Washington probate court lacked subject-matter jurisdiction over the shares.
- Facing inconsistent state judgments and risk of multiple liability, Sunshine filed a federal statutory interpleader action in the District of Idaho under the Interpleader Act of 1936, naming the rival claimant groups (and related parties) as defendants.
- The district court awarded the shares and dividends to Mason based on the Idaho decree; the Ninth Circuit affirmed.

## Issues

1. Whether the 1936 Interpleader Act permits federal jurisdiction when diversity exists between adverse claimant groups, even though the stakeholder shares citizenship with one claimant group.
2. Whether such interpleader jurisdiction is consistent with Article III’s grant of jurisdiction over controversies “between citizens of different States.”
3. Whether joining a state judge and receiver as parties, and issuing interpleader-related injunctive relief to stop parallel suits, violates the Eleventh Amendment or is barred by the federal anti-injunction statute.
4. Whether the Idaho judgment was res judicata on jurisdiction and ownership, controlling the interpleader despite a conflicting Washington probate adjudication.

## Decision

- The Supreme Court affirmed the Ninth Circuit and the district court’s decree awarding the stock and dividends to Katherine Mason.
- The Court held interpleader jurisdiction was satisfied because the statute requires diversity only between adverse claimants, not between the stakeholder and all claimants.
- The Court held Article III permits Congress to authorize jurisdiction in interpleader where the real controversy is between diverse claimant groups.
- The Court rejected Eleventh Amendment objections, treating the state judge and receiver as non-substantive parties where the state had no interest and the final decree did not enjoin them.
- The Court upheld the Interpleader Act’s authorization to enjoin further litigation concerning the interpleaded property, concluding the general anti-injunction provision did not defeat that specific statutory power.
- The Court held the Idaho decree, including its determination that the Washington probate court lacked jurisdiction, was res judicata between the relevant parties in the federal interpleader and therefore controlled.

## Legal Principles

- Statutory interpleader jurisdiction may rest on diversity between adverse claimant groups; complete diversity between the stakeholder and all claimants is not required.
- Article III’s “between citizens of different States” requirement is satisfied where the substantial controversy in interpleader is between diverse claimants, even if the stakeholder shares citizenship with one side.
- In statutory interpleader, federal courts may enjoin parties from prosecuting other suits concerning the interpleaded property when such relief is authorized by Congress and necessary to protect the interpleader proceeding.
- The Eleventh Amendment is not implicated merely because a state judge or receiver is named, where the state has no proprietary interest in the property and the decree does not operate against the state.
- A final judgment of a state court of general jurisdiction can be res judicata in later proceedings between the same parties concerning the same property, including as to the court’s jurisdictional determinations.

## Conclusion

The Court sustained federal statutory interpleader based on claimant diversity, permitted protective injunctive relief, and treated the later Idaho judgment as preclusive on jurisdiction and ownership, resulting in an award of the disputed stock and dividends to Mason notwithstanding conflicting Washington proceedings.


Treinies v. Sunshine Mining Co., 308 U.S. 66 (1939)