Delaware v. Pennsylvania

Background

A group of States challenged how MoneyGram handled prepaid financial instruments called Agent Checks and Teller's Checks. Delaware, MoneyGram's State of incorporation, had been taking abandoned proceeds under the Court's common-law escheat rules. Other States argued that a federal law from the 1970s—the Disposition of Abandoned Money Orders and Traveler's Checks Act—applies and generally awards abandoned prepaid instruments to the State where they were purchased. The cases were consolidated and a Special Master issued reports reaching different conclusions. Under prior common-law rules, abandoned prepaid funds went to a creditor's last known address or, when address records were not kept, to the holder's State of incorporation.

Reasoning

The Court focused on whether the disputed products are similar enough to money orders to fall within the federal statute. The law was written to cover prepaid instruments that often lack purchaser or payee addresses, producing unfair escheat results under the old common-law rules. MoneyGram does not keep creditor address records for these products, so the Court found they operate like money orders and trigger the statute's place-of-purchase rule. The Court also rejected arguments that these items are excluded as “third party bank checks.”

Real world impact

Practically, abandoned proceeds from MoneyGram's Agent Checks and Teller's Checks will generally go to the State where the instrument was bought, not to MoneyGram's State of incorporation. That changes who can claim unclaimed prepaid funds and may shift past and future distributions among States. The case returns the matter to the Special Master for further proceedings consistent with the Court's ruling.