28 February 2023- Today, the U. S. Supreme Court unanimously ruled in favor of the Pennsylvania Treasury Department in a landmark unclaimed property case, creating the potential return of nearly $19 million in escheated funds to Pennsylvania from Delaware.
The case, Delaware v. Pennsylvania et al, was originally filed by Pennsylvania in 2016. It was subsequently joined by 29 other states.
“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 money to the hardworking people it rightfully belongs to.”
Pennsylvania State Treasurer, Stacy Garrity
The Court’s decision adopted much of the reasoning and many of the arguments advanced by Pennsylvania Treasury.
The next step is for the Special Master appointed by the Supreme Court to determine exactly how much money is owed to Pennsylvania and other states. It’s estimated that Delaware could owe as much as $400 million in escheated funds to other states – including the nearly $19 million to Pennsylvania – as unclaimed property from MoneyGram Payment Systems, Inc., a provider of money transfer and bill payment services.
Pennsylvania argued that uncashed “official checks” sold by MoneyGram in Pennsylvania are a form of money order. According to the Federal Disposition Act (FDA), uncashed money orders and similar instruments are to be escheated to the state in which they were originally purchased. Delaware argued that MoneyGram’s “official checks” do not fall into this FDA classification, and are therefore due to the state where the company is incorporated.
In May 2021, SCOTUS-appointed Special Master Judge Pierre N. Leval of the 2nd Circuit Court of Appeals issued a 100-page report which ruled in Pennsylvania’s favor, finding that Delaware improperly demanded and received uncashed MoneyGram checks purchased in other states. Today’s Supreme Court decision adopted the recommendations of that report.
In Special Master Leval’s 2021 report, he conclusively determined the disputed MoneyGram “official checks” should be returned to the state of original purchase in compliance with the FDA. He found Delaware’s argument to be logically “flawed” and both “insubstantial and unpersuasive.”
In October 2022, Pennsylvania Treasury and other states presented oral arguments before the Supreme Court.
Pennsylvania’s case was originally filed in the U.S. District Court for the Middle District of Pennsylvania. The case was subsequently moved to the Supreme Court as a dispute between states that falls within the Supreme Court’s original jurisdiction. After Pennsylvania’s filing, 29 other states filed suit using the same legal arguments advanced by Pennsylvania.
Pennsylvania is the only state directly represented by its unclaimed property administrator, Treasurer Garrity. Pennsylvania Treasury is represented by its Chief Counsel, Christopher B. Craig, along with Matthew H. Haverstick and Joshua J. Voss of Philadelphia-based Kleinbard LLC.
The other states were all represented by their respective Attorney General Offices.