10/28/2023 0 Comments Moneygram receipts![]() They found that the Disputed Instruments were similar in function and operation to money orders and shared similar characteristics to those types of instruments contemplated by the federal law. “In the context of tangible property, the escheatment rule is straightforward: The State in which the abandoned property is located has the power to take custody of it,” stated Justice Jackson.Īll nine Supreme Court Justices concurred with the 30 states that challenged Delaware’s sourcing of these Disputed Instruments. In the opinion authored by Justice Ketanji Brown Jackson, the Court narrowly held that both Disputed Instruments were sufficiently similar to money orders and would escheat under the federal Disposition of Abandoned Money Orders and Traveler’s Checks Act. Because the terms “money order,” “traveler’s check,” or “third-party bank check” were undefined within the statute, the ultimate decision for determining if either Disputed Instrument technically constituted a money order under federal law rested with the Supreme Court. Passed in 1974, this federal law states that sums “payable on a money order, traveler’s check, or other similar written instrument (other than a third-party bank check)” escheat to the state, where the instrument was purchased, not to the state of incorporation. ![]() Central to this dispute was the assertion by the states that they held a superior claim to these Disputed Instruments based on the Disposition of Abandoned Money Orders and Traveler’s Checks Act. They include Alabama, Arizona, Arkansas, California, Colorado, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Texas, Utah, Virginia, Washington, West Virginia, and Wyoming. With Pennsylvania, Arkansas, and Wisconsin leading the charge, 30 states challenged Delaware on this issue in the U.S. 2 Given that these Disputed Instruments were owner/address unknown, Delaware laid claim to them under the secondary rule. These common law priority rules for reporting unclaimed property were established in Texas v. It was Delaware’s position that when these Disputed Instruments remain abandoned for a certain period of time (“dormancy period”), they are reportable to the state of a creditor’s last known address (“primary rule”), or in the absence of an owner address (“owner unknown”), to the state in which the company holding the funds is incorporated (“secondary rule”). Delaware contended that these Disputed Instruments were not akin to money orders, as they were sold under different names and should be regarded as checks. Both products are prepaid financial instruments used to transfer funds to a named payee-very much like money orders. The IssueĪs reported previously, the primary question in this case was which state has the right to escheat two financial products-Agent and Teller Checks (“Disputed Instruments”)-sold by financial institutions on behalf of MoneyGram. ![]() Supreme Court ruled against Delaware in the ongoing MoneyGram dispute between Delaware and 30 other states. In a unanimous opinion 1 issued on February 28, 2023, the U.S. A recent Supreme Court decision will soon deliver a significant transfer of funds to numerous states.
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