In the continuing saga of the battle in Delaware regarding the true nature of MoneyGram’s official checks, the U.S. Supreme Court (“the Court”) has agreed to hear the consolidated cases of Delaware v. Pennsylvania1 and Arkansas v. Delaware.2 The ongoing battle, which includes more than 30 states, centers around the definitions used in unclaimed property statutes to require escheatment to the appropriate states for abandoned checks and money orders.
Last May, the Court appointed a Special Master to review the legislative history of the Federal Disposition of Abandoned Money Orders and Traveler’s Checks Act (“the Act”). This Act dictated different treatment for money orders and checks for purposes of unclaimed property. Abandoned money orders would escheat to the state of purchase, while third-party checks would escheat to the state of legal domicile of the issuer. In the above cases, Delaware maintains that MoneyGram’s instruments are equivalent to a third-party check and should escheat to Delaware, the state of domicile for MoneyGram. The remaining states refer to the rules in the Act to claim that MoneyGram’s instruments should be classified as money orders and, as such, should escheat to the last known residence of the purchaser. In the first interim report issued, the Special Master agreed with the states against Delaware.
A review of the exceptions to the Special Master Report is set for oral argument in due course. We will keep you updated as the case progresses.
1 Case No. 220145.
2 Case No. 220146.
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