The Supreme Court sided with 30 states that challenged Delaware’s practice of seizing unclaimed funds from customers of payments giant MoneyGram, ruling on Feb. 28 that the money left over from abandoned money orders may be taken by the state in which the money order was purchased.

Because MoneyGram is incorporated in Delaware, that state reasoned that it was entitled to the abandoned funds from unclaimed financial instruments such as money orders issued by the company. Delaware, the home state of President Joe Biden, is a center for financial services companies and with its business-friendly courts is where many of the nation’s largest businesses are incorporated.

One of several states that do not levy a retail sales tax, Delaware relies heavily on unclaimed assets to fill its budgetary gaps. Unclaimed property reportedly accounted for $448 million of the state government’s $5.4 billion in revenue in 2021.

Pennsylvania and other states sued to stop Delaware, claiming it was taking the money in violation of the Disposition of Abandoned Money Orders and Traveler’s Checks Act of 1974, also known as the Federal Disposition Act or FDA.

The new decision (pdf) written by Justice Ketanji Brown Jackson, who was appointed last year by Biden, is the first majority opinion she has authored since joining the court. The opinion was unanimous.

Under the ancient legal principle of “escheatment,” a state may take custody of property deemed abandoned. Although a state may generally take abandoned property found in the state, Jackson wrote that the Federal Disposition Act generally favors the claim of the state where the money order was purchased.

Jackson noted that the challenging states said Delaware took $250 million between 2002 and 2017 under escheatment rules but had the FDA statute been followed, it would have been entitled to keep only about $1 million of that total.

Delaware had argued that the financial instruments in dispute, called “official checks,” were not money orders because they were sold under different names.

A special master appointed by the Supreme Court to hear the case, Judge Pierre Leval of the U.S. Court of Appeals for the 2nd Circuit, initially agreed with the challenging states but later changed his mind, embracing Delaware’s position that the instruments were “third-party bank checks” and not money orders.

Jackson disagreed with Leval, saying that the instruments were similar to money orders because they facilitated the payment of a prepaid sum to a specific individual.

“The real question is which differences and similarities matter. And none of the differences Delaware identifies relates to the statutory text or ordinary meaning of a money order, nor do they otherwise undermine the [court’s] analysis of similarity,” the justice wrote.

Because individual states lack jurisdiction over each other, state courts cannot hear cases dealing with another state, so the U.S. Constitution allows the Supreme Court to hear disputes between states. Exercising its so-called original jurisdiction, the court agreed to take up the case in 2016.

The attorney general of Arkansas, one of the states challenging Delaware, hailed the new decision.

“This is an important win for Arkansas and our coalition of states,” Tim Griffin, a Republican, said in a Feb. 28 statement to The Epoch Times.

“For the past decade, Delaware has claimed millions of dollars that rightfully belong to us, and that money will now go where it belongs. I’m proud to lead this bipartisan coalition as we applaud today’s unanimous victory in the Supreme Court.”

The Epoch Times reached out for comment to the counsel of record for Delaware but had not received a reply as of press time.

But Brenda Mayrack, director of Delaware’s Office of Unclaimed Property, told The Philadelphia Inquirer that Delaware was “disappointed in the ruling.”

Calculating how much the state may have to pay, involves data from many sources, and “may be complex and take some time,” she said.

The case is Delaware v. Pennsylvania, court file 22O145.

This article by Matthew Vadum appeared March 1, 2023, in The Epoch Times.