Texas v. New Jersey
Headline: Order assigns priority for unclaimed property: state listed on a company’s records may claim it, otherwise New Jersey may take custody, subject to later recovery by other states.
Holding:
- Prioritizes the state listed on a company’s records to claim unclaimed property.
- Allows New Jersey to hold property lacking addresses or when other states lack escheat laws.
- Permits a state to recover property later if it proves the creditor’s last-known address.
Summary
Background
In this case a company named Sun Oil Company held various items of property on its books for people who were owed money or other benefits. The records sometimes showed a last-known address for the person entitled to the property and sometimes did not. The dispute asked which State has the right to take custody of, or "escheat," those items when the person cannot be located.
Reasoning
The court issued a set of rules. First, if Sun Oil’s records show a last-known address, the State at that address has the primary right to claim the property under its own laws. Second, if there is no address on the company’s books, New Jersey, where Sun Oil was incorporated, may take custody, but another State can recover the property later if it proves the creditor’s last-known address was within its borders. Third, if the records show an address in a State whose laws do not permit escheat, New Jersey may take custody until the other State makes legal provision to claim it. The court also denied any other requested relief.
Real world impact
This order tells companies how to determine which State to give unclaimed property to, relying mainly on the address shown in company records. It gives states and companies a clear priority rule, while preserving a later right for states to recover property if laws or proof change. People owed small sums are affected only to the extent that state law decides custody and recovery.
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