Arkansas and 28 other states will litigate in the U.S. Supreme Court seeking $250 million in unclaimed money



The United States Supreme Court will hear oral arguments on Monday in a case where Arkansas and 28 other states will try to recover $250 million in unclaimed money from the state of Delaware.

In 2016, Arkansas sued Delaware claiming it was working with payment transfer company MoneyGram Inc., to route unclaimed money orders or checks into Delaware vaults. Arkansas, along with attorneys general representing 28 other states, argue that unclaimed funds should go to the states they originated from instead of Delaware, where MoneyGram is incorporated.

Arkansas Attorney General Leslie Rutledge said the lawsuit was to “protect our assets, especially from another state.” Rutledge said Delaware used the unclaimed assets to help fund its budget.

Rutledge met with reporters on Tuesday to preview the argument Arkansas Solicitor General Nicholas Bronni will make Oct. 3 in the U.S. Supreme Court.

Under federal law, unclaimed money orders must be returned to the states they originated in, but checks must not, Rutledge said.

“Delaware has made an arrangement with MoneyGram to ensure that money orders that have been renamed to official checks are returned to a specific state – the State of Delaware,” Rutledge said.

At dispute is the difference between a money order and a check. MoneyGram offers transfer services for money orders and official checks.

Under the Federal Disposition Act, states are “entitled to the proceeds” of unclaimed money orders and travelers checks from their state. Delaware instructed MoneyGram to deliver unclaimed official checks to Delaware, where the company is incorporated, according to Rutledge.

In June, the Supreme Court appointed US Circuit Judge Pierre Leval as a special master in the case. Leval recommended the U.S. Supreme Court’s decision in favor of the 29-state coalition led by Arkansas. Leval said Delaware wrongly received more than $200 million in unclaimed funds from MoneyGram.

State Auditor Andrea Lea found unclaimed Arkansans property held in Delaware, Rutledge said.

“I’m proud that the AG office has joined us in this fight for Arkansas money,” Lea said in a statement. “We look forward to this 7-year issue concluding with a favorable opinion from the Supreme Court.”

The United States Constitution gives the United States Supreme Court initial jurisdiction to hear interstate cases. In legal disputes between states, the Supreme Court can appoint a special master to gather the facts of the case, said Dylan Jacobs, deputy solicitor general.

“MoneyGram is not a party to this matter and the outcome will have no financial impact on MoneyGram,” a MoneyGram spokesperson said in a statement. “MoneyGram takes no position on which side should win or what the court should decide, but the company has an interest in ensuring the law is clear and not subject to multiple conflicting state claims for the same property.

The case will be among the first to be argued before new Associate Supreme Court Justice Ketanji Brown Jackson, whom President Joe Biden appointed to the court in February.

Arkansas could receive $650,000 if the U.S. Supreme Court rules in its favor, according to a June press release from the attorney general’s office. The 29-state coalition suing Delaware is led by Arkansas with attorneys general from California, Texas and Wisconsin.

Other coalition states are Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Montana , Nebraska, Nevada, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Utah, Virginia, Washington, West Virginia and Wyoming.

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