Unclaimed Property Suit Continues to Challenge Escheat Practices

On March 10, 2021, a Special Master appointed by the United States Supreme Court heard oral argument regarding summary judgment motions in the original jurisdiction dispute in Delaware v. Arkansas. In that matter, the Commonwealth of Pennsylvania, through the Chief Counsel of Pennsylvania Treasury, is seeking recovery of in excess of $12 million originating in Pennsylvania that was sent to Delaware by MoneyGram Payment Systems, Inc. Pennsylvania Treasury’s position was presented by Joshua Voss, a partner in Kleinbard’s Litigation Department.

Pennsylvania Treasury alleges Delaware violated the Disposition of Abandoned Money Order and Traveler’s Checks Act (The Act) by collecting funds from abandoned MoneyGram official checks. The Act notes that funds from “unclaimed money orders, traveler’s checks, and similar written instruments,” if abandoned, should be sent to the state in which such checks were purchased. Pennsylvania Treasury joined 29 other states to challenge Delaware’s unclaimed property practices and recover in excess of $250 million in unclaimed property funds.

The case not only challenges application of The Act, but also challenges the common law regarding unclaimed property. Pennsylvania Treasury is advocating for a rule that restores fairness among the states by ensuring the citizens who generated the funds receive the benefit of those funds in the state in which they live.