34:
482:, 407 U. S. 206 (1972). In this case, Pennsylvania asked for the Supreme Court to change its rules for escheatment because it was creating an unfair "windfall" to states where money orders are purchased, moving money to the state of New York. In the Pennsylvania case, the court refused to change its rule for escheatment.
489:, Congress created a more equitable rule and passed the FDA. Congress stated "as a matter of equity among the several States," the states “wherein the purchasers of money orders and traveler's checks reside should ... be entitled to the proceeds of such instruments in the event of abandonment" §2501(3).
492:
Both
Congress and the court recognized that the common-law rules the court established were failing to achieve an equitable distribution of resources among the states. "A variety of dictionary definitions contemporaneous with the Act's passage universally define a 'money order' as a prepaid financial
472:
The court acknowledged that it created the default rule to escheat to the state of the creditor's last known address because it "tend to distribute escheats amount States in the proportion of the commercial activities of their residents." The court acknowledged that the regulations it had established
357:
MoneyGram's two instruments, "Agent Checks" and "Teller's Checks," are the case's disputed instruments. If the common law related to escheatment applies to the disputed instruments, the abandoned property escheats to the state of incorporation. However, if the FDA applies, the abandoned property goes
548:
This ruling means that
Pennsylvania residents will have a real opportunity to reclaim millions of dollars in unclaimed property. The Supreme Court rejected Delaware's attempt to gain an unfair windfall and struck a strong blow in favor of consumers. I'm eager to get to the business of returning this
517:
The court considered the view of the letter the
Treasury Department sent to Congress about the bill. The letter warned that the proposed wording of the FDA prior to its passage could be interpreted to cover "third party payment bank checks," so the Treasury recommended excluding "third party payment
504:
The court looked at
Delaware and the special master's view that "even if the Disputed Instruments qualify as 'other similar written instrument' under the FDA, they are also 'third party bank check,' which are expressly excluded from the FDA." However, the court noted that the FDA does not define the
468:
According to the primary rule (default), the proceeds of abandoned financial produce should escheat "to the State of the creditor's last known address as shown by the debtor's books." The secondary rule did not resolve the question of escheatment when the creditors' addresses were unknown or because
458:
The court held that the disputed instruments are "sufficiently 'similar' to money orders to fall under the FDA." The court did not decide whether the disputed instruments "are" money orders. The court ruled that they were similar to money orders under 12 U.S.C. 2503. They fall into the FDA's "other
442:
The court accepted briefs and oral arguments, then the special master announced that the proceedings before the court had caused him to "reassess his conclusion." He subsequently issued a Second
Interim Report, which concluded that many of the disputed instruments were or could be "third party bank
418:
The special master stated that he read the oral arguments before the
Supreme Court, where he felt that Delaware was "emphasizing a circumstance that, if correct, would distinguish between rights and obligations, at least comparing the disputed instruments with those that MoneyGram labels as 'money
270:
used the escheatment of "assets like bank and brokerage accounts, unclaimed life insurance policies, uncashed paychecks, traveler's checks, and gift cards" as a source of the state's revenue. It was
Delaware's third-largest source of revenue, representing 10% of incoming funds. Delaware is home to
496:
The court noted that the FDA was passed to change the court's prior common-law rule on the escheatment of these instruments. The court went on to note one reason that the FDA was passed was to "prevent a 'windfall' to the State of incorporation by instead adopting a place-of-purchase escheatment
414:
The special master held oral arguments on
December 8, 2022. On December 13, 2022, he issued a Second Interim Report, in which the special master issued an apology to the Supreme Court stating: "Upon reading the arguments before the Supreme Court and returning to the record in the case, I can no
525:
The court held that, based on the history and text of the FDA, "it would be strange to interpret the 'third party bank check' language to exempt from the statute entire swaths of prepaid financial instruments that are otherwise similar to money orders in that they operate in generally the same
353:
There are two ways laws that the special master was asked consider: the
Disposition of Abandoned Money Orders and Travelers Check Act (Federal Disposition Act or FDA) 12 U.S.C. §2503, and the federal common law rule in which debts left unclaimed by creditors would escheat "to the State of the
296:
that are sold to consumers to pay their own obligations. MoneyGram
International, Inc. is the second-largest money transfer business in the world, with revenues of over $ 1 billion. MoneyGram sells two products: "Official Checks" and "Retail Money Orders." The retail money orders are not the
361:
The special master covered the historical precedent of escheatment. Under English common law, all land titles and property originated from the Crown. "he process by which tenurial land returned to the lord of the fee upon the occurrence of an event obstructing the normal course of descent."
446:
The special master recommend to the Supreme Court that any of the "Disputed Instruments that are checks issued by banks as drawers (on which banks are thus liable) are 'third party bank checks,' which are excluded from the scope of the 'other similar written instrument' clause and from the
426:
The special master concluded that the disputed instruments did fall in the category of "other similar written instruments," but were not "money orders." However, because some of the disputed instruments are drawn by a bank, they fell within the exclusion of the "third party bank checks."
513:
The majority opinion held that nothing in the legislature's history supported Delaware's view that the disputed instruments were "third party bank checks." The court acknowledged that the term "third party bank check" has "myriad alternative definitions and is generally unknown."
383:, first published in 1954. The act was not universally adopted and did not resolve claims between the states. The revised Uniform Disposition of Unclaimed Property Act, published in 1966, included "money orders and traveler's checks." However, the act did not define these terms.
265:
States are entitled to take custody of abandoned personal property through the process of escheatment. MoneyGram reports that the hundreds of millions of dollars of abandoned money is in dispute, with more than $ 500 million in dispute in recent years. The state of
393:"(1) the books and records of banking and financial organizations and business associations engaged in issuing and selling money orders and traveler’s checks do not, as a matter of business practice, show the last known addresses of purchasers of such instruments;
365:
Under American law, escheatment has been justified under the public policy that unclaimed and abandoned assets should be "used for the general good rather than for the chance enrichment of particular individuals or organizations," per
473:
were leading to an uneven distribution of benefits among certain financial instruments. It specifically drew attention to Western Union's failure to maintain records of the addresses of consumers who purchased its financial products.
349:
to the case. On July 23, 2021, the special master issued the First Interim Report, ruling that disputed instruments are covered by the Federal Disposition Act. Leval split the case into two parts: a liability and a damage phase.
399:(3) the states wherein the purchasers of money orders and traveler’s checks reside should, as a matter of equity among the several states, be entitled to the proceeds of such instruments in the event of abandonment;"
1218:
300:
There are two types of MoneyGram "official checks": "Agent Checks" and "Teller's Check" These checks are sold only by financial institution banks and credit unions. They are not sold at retail locations.
500:
The court dismissed Delaware's argument that the special master's reading and the court's view of section 2503 would "creat surplusage and in all sorts of unintended financial product ... go too far."
1208:
462:
The Supreme Court's opinion addresses the first phase of the bifurcated process from the special master's liability phases. The Court left the special master to decide the damages in the second phase.
493:
instrument used to transmit a specified amount of money to a named payee. And this Court's common-law precedents—the backdrop against which the FDA was enacted—are in accord with that definition."
618:
529:
The court adopted the special master's First Interim Report and the proposed order, overruling Delaware's exception to the First Interim Report, before returning it to the special master.
450:
The special master concluded the Teller's Checks marked by MoneyGram are, indeed, teller's checks. However, the "so labeled Agent Checks" and "unlabeled Agent Checks" are not drawers.
706:
1142:
274:
Multiple states filed suit to petition the Supreme Court to resolve a dispute between the states regarding whether abandoned proceeds are subject to the Disposition of Abandoned
82:
736:
297:
instrument in dispute of this case. Images of the disputed items can be viewed in the two affidavits from Jennifer Whitlock, head of global supply chain for MoneyGram.
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469:
the state did not have a law allowing escheatment. Thus, the secondary rule served to allow the abandoned property to default to the state of incorporation.
1109:
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The FDA applies only to money payable on "a money order, traveler's check or other similar written instruments (excluding third-party bank check).
1198:
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257:'s first majority opinion on the Supreme Court. It was also the first case the Supreme Court had taken on unclaimed property in over 30 years.
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Once the special master's First Interim Report concluded the disputed instruments were covered under the FDA, Delaware filed an exception.
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fashion and would likewise escheat inequitably pursuant to the common law due to the business practice of company holding the funds."
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bank checks from the FDA". Congress adopted this recommendation. The court also considered the statements of committee chair Senator
933:
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619:"Justice Ketanji Brown Jackson's first opinion on the Supreme Court decides who gets to keep millions in unclaimed funds"
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believes that Delaware may owe up to $ 400 million to the plaintiff states as result of the court's ruling.
478:
305:
234:
Disposition of Abandoned Money Orders and Travelers Check Act (Federal Disposition Act or FDA) 12 U.S.C. §2503
316:
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The case now returns to the special master for the second part of the bifurcated action to assess damages.
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396:(2) a substantial majority of such purchasers reside in the states where such instruments are purchased;
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522:, which reviewed the addition of the "third party payment bank check" exclusion as a "minor" change.
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423:. After briefing and oral arguments, the special master revised his recommendation to the court.
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707:"Supreme Court Rules Delaware Doesn't Have Dibs On Hundreds Of Millions Of Unclaimed Dollars"
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The court looked at the common-law it created in by the court's own case law of two rules.
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653:"Unclaimed MoneyGram checks are subject of Jackson's first SCOTUS opinion in argued case"
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longer subscribe to the entirety of the recommendations I made to the Supreme Court."
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737:"Delaware loses Supreme Court case with millions at stake over unclaimed property"
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The special master highlighted the congressional findings in the FDA that noted:
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On May 26, 2016, a motion was filed for leave to file a bill of complaint. The
435:
Delaware exception to Supreme Court of the United States Special Master ruling
312:
224:(Parts I, II, III, and IV–A); Roberts, Sotomayor, Kagan, Kavanaugh (Part IV–B)
934:"SCOTUS: Delaware illegally took $ 19M from PA, $ 400M total to other states"
505:
term "third party bank check," nor does it have a commonly accepted meaning.
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Creditor's last known address as shown by the debtor's books and records."
1110:"Special Master Tells Supreme Court He's Changed His Mind About MoneyGram"
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covers disputed instruments in dispute. The rules came from the case of
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in Delaware for the legal and tax protections that the state offers.
678:"Supreme Court Issues First Unclaimed Property Opinion in 30 Years"
874:"Special Master | Second Circuit | United States Court of Appeals"
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orders.'" The special master notified the court clerk and ordered
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rule." This was done as a matter of equity between the states.
33:
899:"Transcript of Video Conference Proceedings March 10, 2021"
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money to the hardworking people it rightfully belongs to.
1219:
United States Supreme Court original jurisdiction cases
1209:
United States Supreme Court cases of the Roberts Court
282:
Act (Federal Disposition Act or FDA) 12 U.S.C. §2503.
1016:"Standard Oil Co. v. New Jersey, 341 U.S. 428 (1951)"
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check" and would thereby be "excluded from the FDA."
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heard oral arguments on the case on March 10, 2021.
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849:"Delaware v. Pennsylvania, 598 U.S. ___ (2023)"
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485:In a direct response to the court's holding in
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124:" or "similar written instruments" subject to
1082:"Second Interim Report of the Special Master"
608:Delaware v. Pennsylvania, 598 U.S. 115 (2023)
377:Uniform Disposition of Unclaimed Property Act
8:
991:"First interim report of the special master"
960:"First Interim Report of the Special Master"
554:Pennsylvania State Treasurer Stacy Garrity.
345:The Supreme Court appointed special master
311:Delaware sought this issue be a matter of
304:Many large companies in the United States
249:case related to unclaimed money and check
23:
787:Whitlock, Jennifer (December 13, 2017).
762:"Delaware v. Pennsylvania and Wisconsin"
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816:Whitlock, Jennifer (October 3, 2017).
459:similar written instrument" category.
375:The special master then evaluated the
57:Delaware v. Pennsylvania and Wisconsin
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1041:"Revised Proceeding Held Remotely"
932:Staff Report (February 28, 2023).
454:Supreme Court of the United States
39:Supreme Court of the United States
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1204:United States Supreme Court cases
1149:115 (2023) is available from:
18:U.S. Supreme Court case from 2023
818:"Affidavit of Jennifer Whitlock"
789:"Affidavit of Jennifer Whitlock"
476:The court discussed the case of
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958:Leval, Pierre (July 23, 2021).
1199:2023 in United States case law
369:Standard Oil Co. v. New Jersey
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325:, 379 U. S. 674, 675 (1965).
245:, 598 U.S. 115 (2023), was a
1181:Supreme Court (slip opinion)
271:over 2 million businesses.
247:United States Supreme Court
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1172:Oyez (oral argument audio)
372:341 U.S. 428, 436 (1951).
358:to the state of purchase.
447:disposition of the act."
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48:Decided February 28, 2023
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1139:Delaware v. Pennsylvania
487:Pennsylvania v. New York
479:Pennsylvania v. New York
404:12 U.S.C. § 2501(1)–(3).
253:. This case was Justice
242:Delaware v. Pennsylvania
27:Delaware v. Pennsylvania
317:Federal Disposition Act
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533:Reaction and aftermath
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381:Uniform Law Commission
292:that provides prepaid
46:Argued October 3, 2022
705:Erb, Kelly Phillips.
294:financial instruments
255:Ketanji Brown Jackson
204:Ketanji Brown Jackson
120:payments constitute "
1114:National Law Journal
878:ww2.ca2.uscourts.gov
410:Second Interim Order
290:Delaware corporation
105:Opinion announcement
101:Opinion announcement
768:. February 28, 2023
625:. February 28, 2023
341:First Interim Order
322:Texas v. New Jersey
220:Jackson, joined by
1050:. December 8, 2022
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429:FDA 12 U.S.C. 2503
421:expedited briefing
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168:Samuel Alito
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122:money orders
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657:ABA Journal
306:incorporate
251:escheatment
180:Elena Kagan
134:§ 2503
126:escheatment
1193:Categories
1020:Justia Law
853:Justia Law
563:References
540:Treasurer
313:common law
261:Background
116:Unclaimed
63:Docket no.
1119:March 27,
1094:March 27,
1089:US Courts
1054:March 27,
1000:March 27,
972:March 27,
943:March 27,
912:March 27,
883:March 27,
830:March 27,
801:March 27,
772:March 27,
746:March 27,
716:March 27,
687:March 27,
662:March 27,
629:March 27,
286:MoneyGram
222:unanimous
118:MoneyGram
73:Citations
1137:Text of
766:Oyez.org
682:JD Supra
552:—
520:Sparkman
402:—
268:Delaware
217:Majority
91:Argument
111:Holding
1184:
1178:
1175:
1169:
1166:
1163:Justia
1160:
1157:
1151:
711:Forbes
202:
200:·
198:
190:
188:·
186:
178:
176:·
174:
166:
164:·
162:
132:
67:22O145
1145:
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963:(PDF)
902:(PDF)
821:(PDF)
792:(PDF)
288:is a
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1147:U.S.
1121:2023
1096:2023
1056:2023
1027:2024
1002:2023
974:2023
945:2023
914:2023
885:2023
860:2024
832:2023
803:2023
774:2023
748:2023
718:2023
689:2023
664:2023
631:2023
278:and
83:more
78:U.S.
76:598
1143:598
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