TOPEKA – (October 4, 2016) – A lawsuit against the State of Delaware will go forward after the U.S. Supreme Court granted a motion allowing Kansas and 20 other states to proceed with their case, Kansas Attorney General Derek Schmidt said today.
In an order issued yesterday, the U.S. Supreme Court agreed to take up the case and allow the states to file their “bills of complaint.” The lawsuit stems from a dispute over unclaimed “official checks,” which are similar to money orders, issued by MoneyGram, which is incorporated in Delaware. When an “official check” is never presented for payment, MoneyGram doesn’t release the money it collected for the “official check.” Thus, MoneyGram accumulates hundreds of millions of dollars each year in unclaimed funds when these checks are not presented.
The states filing the lawsuit against the State of Delaware allege that instead of sending the value of those uncashed checks as unclaimed property to the states where they were purchased, MoneyGram, at the direction of Delaware, has been turning over all of the funds to the Delaware unclaimed property system. It is believed that $1.78 million in these uncashed official checks were purchased in Kansas.
“Kansans who purchased these ‘official checks’ from MoneyGram that were left uncashed should be able to claim them through our Kansas unclaimed property program under the supervision of our own state treasurer,” Schmidt said. “We’re encouraged that the nation’s highest court has agreed to hear our claim on behalf of the Kansas owners of this property. Our goal is to get the money back to the Kansans it belongs to.”
Under the U.S. Constitution, lawsuits between states originate before the U.S. Supreme Court. The plaintiff states are asking the Supreme Court to declare that the federal Disposition of Abandoned Money Orders and Traveler’s Checks Act applies to these “official checks” and that the State of Delaware violated the law by failing to return these funds to the states where the checks were purchased.
The case is State of Arkansas, et al. v. State of Delaware, No. 146, Original, consolidated with State of Delaware v. State of Pennsylvania and State of Wisconsin, No. 145, Original. A copy of the motion that was granted by the Court is available at http://1.usa.gov/1PMgokP.