Millions at stake in SCOTUS case of 30 states vs. Delaware

Published: Sep. 30, 2022 at 4:07 PM EDT

WASHINGTON (Gray DC) - Thirty states says it’s time for Delaware to pay up.

“In this instance, the state of Delaware was using unclaimed money orders that belonged back to other states they were using it to offset their own budget,” says Arkansas Attorney General Leslie Rutledge.

Arkansas along with 29 other states are suing Delaware for cashing unclaimed MoneyGrams.

Between $250-$400 million is at stake when justices hear the Supreme Court case Delaware vs. Pennsylvania and Wisconsin on Monday.

“This is a case of original jurisdiction any time that you have a state suing another state and in this instance you have 30 states suing the state of Delaware. That’s why it goes up before the U.S. Supreme Court,” said Rutledge.

The dispute was first filed in 2016 by Pennsylvania against Delaware involving unclaimed property. Afterwards, 29 other states joined the suit.

The argument centers around who has the authority to claim uncashed MoneyGram official checks as unclaimed property.

According to the states where MoneyGram operates, uncashed “official checks” by MoneyGram are a form of money order.

Under the Federal Disposition Act (FDA), uncashed money orders should be handed over to the states where they were initially purchased.

But, Delaware where MoneyGram is incorporated believes MoneyGram’s “official checks” don’t fall under the FDA.

Michael Lurie is counsel on this case, but for this report he spoke as an attorney who specializes in unclaimed property cases.

“The wrinkle here is that official checks for MoneyGram do not say money order on them, and there’s a question among the states over whether these are money orders and within that exception,” said Lurie. “Or, they go back to the general rule and go back to Delaware or the state of incorporation.”

In May of last year, a SCOTUS-appointed Special Master Judge ruled in Pennsylvania’s favor conclusively determining the disputed MoneyGram “official checks” should be returned to the state where they were initially purchased in compliance with the FDA.

When this case goes before justices it will be among the first cases to be heard by Associate Supreme Court Justice Ketanji Brown Jackson.