Delaware v. Pennsylvania
The Supreme Court ruled unanimously that a federal law — the Federal Disposition Act — governs abandoned bank-issued payment instruments similar to money orders, meaning those unclaimed funds go to the states where the instruments were purchased rather than to Delaware, where the issuing company MoneyGram is incorporated.
The decision shifts potentially hundreds of millions of dollars in unclaimed property away from one company's home state and toward the states whose residents actually bought the financial products, settling a long-running dispute among states over who gets to keep unclaimed prepaid funds.
How it got here: Multiple states sued Delaware in the Supreme Court's original jurisdiction; the Court appointed a Special Master who issued two conflicting interim reports, and both sides filed exceptions to those reports.
The Case in Depth
What happened
MoneyGram, a financial services company incorporated in Delaware, sells prepaid payment instruments — called "Agent Checks" and "Teller's Checks" — through banks nationwide. When customers buy these instruments and never cash them, the funds sit unclaimed. Delaware collected that money under a rule directing unclaimed intangible property to a company's state of incorporation. More than two dozen other states argued that a federal law requires the funds to go instead to whichever state the instruments were purchased in.
The question before the Court
Which states get to collect the unclaimed funds from abandoned bank-issued payment instruments — the states where the instruments were purchased, or the state where the company holding the funds is based?
The Court's answer
The states where the instruments were purchased. The Court ruled that MoneyGram's Agent Checks and Teller's Checks are covered by the Federal Disposition Act (FDA) because they are sufficiently "similar" to money orders. Like money orders, these instruments are prepaid, transfer money to a named recipient, and are held by a company that does not track customer addresses as a matter of routine business practice. That recordkeeping gap is exactly the inequity Congress targeted when it passed the FDA.
The Court also rejected Delaware's argument that the instruments fall under a "third party bank check" exception that would exclude them from the FDA. That phrase has no accepted meaning in law or finance — the experts could not agree, and the Special Master adopted three different definitions over the course of the litigation. Neither Delaware's proposed definition nor the Special Master's connected logically to the FDA's purpose, so the unclaimed funds must go to the states where the instruments were purchased.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
States whose residents purchased MoneyGram's payment instruments will now collect the unclaimed funds instead of Delaware. According to the other states, Delaware had collected roughly $250 million it was not entitled to. The ruling also establishes a rule for how similar prepaid financial products are classified under federal unclaimed-property law going forward.
What changes now
The case returns to the Special Master for the damages phase — calculating how much each state is owed in unclaimed funds going back to when the FDA should have been applied to these instruments. The core question of which state gets the money is now resolved. Pennsylvania's separate request to revisit the Court's common-law escheatment rules was rendered moot by the ruling.
What this does not decide
The Court explicitly did not decide whether the FDA applies to cashier's checks, certified checks, or teller's checks issued by companies other than MoneyGram. The ruling turns partly on MoneyGram's specific recordkeeping practices; a company that does track customer addresses may be treated differently.
Concurrences and dissents
Concurrence in part — Justice Thomas
Justices Thomas, Alito, Gorsuch, and Barrett joined all parts of the majority opinion except Part IV-B, which draws on congressional history to interpret the ambiguous 'third party bank check' phrase. No separate opinion was filed. Their non-joinder of Part IV-B almost certainly reflects a textualist approach — the view that courts should resolve statutory ambiguity from text and structure alone, without consulting what Congress members said during the legislative process.
How the Court got there
The legal reasoning, step by step
- The FDA applies to 'money orders, traveler's checks, or other similar written instruments (other than a third party bank check)' when a banking entity is directly liable. The Court focused on whether the Disputed Instruments qualify as 'other similar written instruments' — a finding that would bring them under the law without deciding whether they are technically money orders at all.
- To determine what 'similar' means in context, the Court consulted dictionary definitions from when the FDA was passed and its own earlier escheatment decisions. Those sources converge on a core definition of a money order: a prepaid instrument used to transmit a specified amount of money to a named recipient — a description that fits MoneyGram's Agent Checks and Teller's Checks.
- The Court identified a second, equally important similarity: the FDA was enacted specifically because companies selling money orders typically don't track customer addresses as a matter of business practice, causing unclaimed funds to flow inequitably to the company's home state. MoneyGram has exactly this same recordkeeping gap for the Disputed Instruments, producing the same inequitable outcome the FDA was designed to fix.
- The Court rejected Delaware's argument that the FDA was really aimed at protecting low-income money order buyers from higher costs, and therefore didn't cover these larger-value instruments bought by wealthier consumers. The statute's text mentions cost only to explain why Congress rejected a mandatory recordkeeping solution — not to limit the FDA's coverage to any particular consumer class.
- On the 'third party bank check' exclusion, the Court found the phrase has no recognized meaning in law or finance — the retained experts all agreed it was an undefined term, and the Special Master adopted three different definitions over the litigation. Neither Delaware's definition nor the Special Master's (which turned on whether a bank was liable on the instrument) explained why bank liability should matter for escheatment purposes, since banks can be liable on ordinary money orders, which the FDA expressly covers.
- Five justices also consulted congressional history (Part IV-B): the 'third party bank check' phrase was added to the bill as a 'minor' and 'technical' clarification at the suggestion of a Treasury Department official who was concerned one type of instrument might be swept in unintentionally. Reading the phrase broadly enough to exclude all of MoneyGram's prepaid instruments would far exceed what was described as a minor clarification and would undermine the FDA's entire framework for equitable distribution of unclaimed funds.
Doctrinal impact
Cases affected by this decision
Reaffirms Texas v. New Jersey (379 U. S. 674)
The common-law escheatment rules still govern unclaimed intangible property that falls outside the FDA's reach.