Jeff Mordock

The News Journal

Pennsylvania wants its federal lawsuit against Delaware moved to the U.S. Supreme Court.

The case is over money orders that go unclaimed each year.

Abandoned property is the third largest source of revenue for the state.

Pennsylvania officials have asked a judge to transfer its federal lawsuit against Delaware to the U.S. Supreme Court. If approved, it would be the second lawsuit brought in the high court against Delaware by other states.

Both cases revolve around the millions of dollars in money orders that go unclaimed each year. Delaware argues federal law permits it to collect unclaimed property from financial services companies incorporated in the state, including MoneyGram, the nation's largest provider of money orders. Dallas-based Moneygram earned $1.4 billion in total revenue for 2015, according to a company announcement.

Abandoned property, including money orders, accounts for about 15 percent of Delaware's annual income, according to a task force that studied how the state collects revenue. That makes abandoned property the third largest source of revenue for the state.



But other states contend federal law requires unclaimed money orders to return to the state where the transaction occurred, not the company's state of incorporation. Those states have initiated legal battles to access those funds.

In February, Pennsylvania sued Delaware in the U.S. District Court for the Middle District of Pennsylvania, alleging it wrongly seized more than $10 million in unclaimed money orders. Wisconsin followed in April with a separate lawsuit against Delaware in the U.S. District Court for the Western District of Wisconsin. That lawsuit contends Wisconsin taxpayers are owed more than $13 million in unused money orders.

The biggest suit was filed last week when 21 states, led by Texas and Arkansas, raised similar allegations against Delaware in the U.S. Supreme Court. The states are asking for a combined $150 million in unclaimed money orders that have been remitted to Delaware.

Delaware countered last month against Pennsylvania and Wisconsin by filing a lawsuit in the Supreme Court. In court papers, Attorney General Matt Denn argued that the Supreme Court was the appropriate venue because it was a dispute among states.

On Monday, Pennsylvania filed a motion concurring the case should be moved to the U.S Supreme Court. State officials agreed with Delaware in court filings that the nation's highest court should resolve interstate arguments.

"Given that this is a dispute between states, the U.S. Supreme Court is an appropriate venue and we look forward to arguing the merits of our case," said Pennsylvania State Treasurer Timothy A. Reese in a statement. "We feel strongly that this is money that belongs to Pennsylvania and are pleased to lead this effort that nearly two dozen other states have joined."

Scott Sloat, a spokesman for the Pennsylvania Treasury Department, said the lawsuit filed by 21 states did not influence the transfer motion. He added that it is unclear when the U.S. Supreme Court will issue a decision on whether or not they will accept the case.

It is not known if Wisconsin also plans a venue change. Messages left in a voice mailbox for Wisconsin Treasurer Matt Adamczyk were not immediately returned.

Delaware Finance Secretary Tom Cook said he was pleased Pennsylvania concurred with Delaware that the Supreme Court has jurisdiction over this matter, but said both sides disagree on the application of the 1974 Federal Disposition Act, the law that governs which controls unclaimed property.

"The state of Delaware is still looking for clarity on this issue," he said.

Michael R. Dimino, a professor at Widener University Commonwealth Law School in Harrisburg, Pennsylvania, said the Supreme Court is the most appropriate venue under the U.S. Constitution and other federal statutes.

"Not only does the U.S. Supreme Court have original jurisdiction, but the Supreme Court has exclusive jurisdiction over these kinds of cases," Diminio said. "There is no other choice."

Contact Jeff Mordock at (302) 324-2786, on Twitter @JeffMordockTNJ or jmordock@delawareonline.com.