Western Union Telegraph Co. v. Pennsylvania

Background

Pennsylvania used a state escheat law (state taking ownership of unclaimed property) to try to claim unclaimed Western Union money orders and unpaid drafts that had sat unclaimed for seven years. Western Union is a New York corporation that did money‑order business across many States. Pennsylvania courts declared the unclaimed funds escheated to the State, but New York had already escheated part of the same funds and Western Union warned it could face multiple lawsuits or be forced to pay the same obligation twice.

Reasoning

The Court focused on whether Pennsylvania could enter a binding judgment that would prevent other States from claiming the same funds. It held that Pennsylvania courts could not protect Western Union from later claims by other States because those other States were not parties and could not be bound. The Constitution provides a way for States to resolve disputes between them in a federal forum where all interested States can be heard, and the Court said that interstate contests over multi‑state unclaimed intangibles should be handled there.

Real world impact

The decision prevents a single State from unilaterally seizing multi‑state unclaimed intangible funds when other States may have competing claims. Companies that hold unclaimed money orders and drafts are protected from being forced to pay the same debt twice. The ruling reversed Pennsylvania’s decision and sent the case back to the state court for further proceedings consistent with the opinion; it is not a final ruling on which State ultimately wins.

Dissents or concurrances

Justice Stewart agreed with reversal but added that, in his view, New York — where the company’s principal office and the funds were located — likely had the power to escheat these funds.