Pennsylvania v. New York

1972-06-19

Headline: Court applies creditor-address rule to unclaimed Western Union money orders, upholds Special Master decree, and lets states shown in company records claim funds while New York holds missing-address sums.

Holding: The Court rejected Pennsylvania’s exceptions, applied the Texas v. New Jersey rule to Western Union money orders, giving funds to states shown on company records and New York custody when no address appears.

Real World Impact:

Gives states shown on company records priority to claim unclaimed money order funds.
Lets New York hold funds when creditor addresses are missing or no escheat law exists.
States may need to fund searches for creditor addresses or require better recordkeeping.

Topics: unclaimed money, state escheat rules, money orders, state disputes over funds

Summary

Background

Pennsylvania sued New York and other States over millions in unclaimed funds held by Western Union from money orders. The complaint said Western Union held over $1,500,000 in unclaimed funds, about $100,000 tied to purchases in Pennsylvania. A Special Master gathered evidence and issued a report recommending a rule for which State may take custody of those funds.

Reasoning

The central question was which State may take custody of unclaimed money order proceeds. The Court accepted the Special Master’s recommendation and applied the Texas v. New Jersey rule: give the funds to the State shown as the creditor’s last known address in Western Union’s records. If no address appears or that State lacks an escheat law, New York, as Western Union’s domiciliary State, may take custody. The Court overruled Pennsylvania’s exceptions, refused the place-of-purchase alternative, and remanded for a hearing about who must pay to locate available addresses in Western Union’s files.

Real world impact

States will claim unclaimed money order funds using addresses in Western Union’s records. New York may hold funds when records lack addresses or where the creditor’s State has no escheat law. The Court said claimant States, not Western Union, should bear the cost of finding available addresses unless the Special Master orders otherwise, and noted States may require better recordkeeping going forward.

Dissents or concurrances

Justice Powell, joined by Justices Blackmun and Rehnquist, dissented. He argued the Texas rule produces an unfair windfall for New York and imposes costly, item-by-item searches, preferring allocation by place of purchase instead.