[12] Oklahoma County District Court, No. In the legal profession, information is the key to success. This federal law prescribes that for money orders, travelers checks or “other similar instruments” (other than third party bank checks) on which a banking or financial organization or business association is liable, the state where the instrument was purchased is the state entitled to take custody. With multiple states claiming jurisdiction over the same property, the nation’s highest court is now being asked to provide clarity on competing state positions. In 2015, the defendants filed a motion to dismiss the suit. Law360, Wilmington (October 6, 2016, 10:49 PM EDT) -- The Delaware Department of Finance asked the Chancery Court Thursday to enforce a summons under the state's unclaimed property law against a company that handles rebates and reward programs for retailers, saying the firm is not cooperating with government demands to examine its records. However, other states have now asserted that the state where the checks were purchased are exclusively entitled to escheat the uncashed checks in accordance with federal law. The Court also granted the motion to dismiss of the National Restaurant Association as its’ part of the purported scheme in marketing the service to its members was too tenuous to have caused the harm alleged. Further, they indicate that because MoneyGram’s money orders and official checks have the same characteristics (i.e., the funds used to purchase both are held by MoneyGram until the instruments are negotiated), they are considered “other similar instruments” covered by the federal law. 37-2014 (Super. In its complaint, Pennsylvania asserts that the federal Disposition of Abandoned Money Orders and Traveler’s Checks Act [2] applies to the checks in question in the suit. [1] Bed, Bath and Beyond v. Chiang, No. Please see our Privacy Policy. The lawsuit was filed in June 2015 and, in November of the same year, the Oklahoma District Court dismissed the lawsuit without merit. In late February, the Pennsylvania State Treasurer initiated a lawsuit against the Delaware State Escheator and Money Gram Payment Systems, Inc. (“MoneyGram”) alleging that Delaware advised MoneyGram to escheat – and retained the escheatment of – nearly $10.3M dollars in official checks that were purchased in Pennsylvania. While this decision is favorable for retailers that issue store credits for returned merchandise and could have a ripple effect in other jurisdictions, it is likely that the Controller will appeal the Superior Court’s decision. In addition, the complaint indicates the state seizes and liquidates IRAs, mutual funds, HSAs, ESAs and other securities and pays claiming owners only the net proceeds from the sale with no consideration for any appreciation in the value of the property after the sale. In Delaware v. Pennsylvania, No. Law360 may contact you in your professional capacity with information about our other products, services and events that we believe may be of interest.You’ll be able to update your communication preferences via the unsubscribe link provided within our communications.We take your privacy seriously. How Do States Assess Penalties and Interest for Unclaimed Property? 2015; writ of certiorari filed 8/5/2015). Column. However, the Court indicated that Texas v. New Jersey[8] and Delaware law would dictate that jurisdiction is based upon the LLCs’ state of formation/organization which for these defendants is Delaware. Ct. San Diego, CA, Mar. The plaintiffs assert that the scheme involved the use of special corporations to issue the gift cards on behalf of the retailers. For example, a case filed by Office Depot in July raises many of the same issues that were central to Temple-Inland. 11737-CB (Del. C. § 1155. Rewards. Blackhawk Engagement Solutions is a leading global provider of customized incentive and engagement solutions for consumer promotions, employee rewards … This is effectively putting Plaintiffs’ property back into the public domain. As Representative Paul Baumbach noted in a recent article on the case, “[t]his particular amount of money is relatively small for us, so I don’t think it’s going to create any big shifts by itself… but it reinforces the need for us to work together to come up with systemic changes.”[3] State Senator Bryan Townsend echoed that sentiment and emphasized that the case shows that Delaware is not the only state that relies on unclaimed property as a revenue stream: “I think it shows how important this is to Delaware, and that other states are going to try and grab as much as they can….”[4]. CJ-2015-3445 (11/4/2015). Ch., filed Nov. 20, 2015). The unclaimed property consultants from Keane’s National Consulting & Advisory Services Team are seasoned financial professionals from a wide variety of industries and backgrounds. Also, the Pennsylvania Treasurer explains that other states (including Texas and Colorado) have requested that the Delaware State Escheator remit to them sums payable on abandoned MoneyGram checks that were purchased in their respective states, but remitted by MoneyGram to Delaware. 22O145 ORG (U.S., filed May 31, 2016), and two other almost identical cases, nearly half of US states have alleged Delaware circumvented federal law by escheating up to $400 million in uncashed checks issued by MoneyGram Payment Systems Inc. (“MoneyGram”). Download our plug-in for Chrome to get customizable, real-time news alerts, Access to case data within articles (numbers, filings, courts, nature of suit, and more. The action was brought to enforce the administrative summons that the DOF served on Blackhawk in February 2015, under which the DOF sought sworn testimony and the production of documents (including client contracts) related to uncashed rebate check payments returned to Blackhawks client companies or subject to an express per-transaction fee discount to its Client companies. In 2015, unclaimed property agencies in the U.S. collected $7.8 billion and returned $3.2 billion to rightful owners, according to NAUPA. Main navigation. In addition to Temple-Inland, another Delaware unclaimed property case involving similar constitutional arguments has likely reached its end. In their complaint they indicate the systematic lowering of dormancy periods and dilution of owner notice requirements (i.e., elimination of required owner outreach mailings and newspaper publication) have created a situation where owner communication efforts are inadequate (via providing information on missingmoney.com) and permit the state to retain owner funds.

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