(DOVER, Del.)- Texas Attorney General Ken Paxton announces Texas has joined Arkansas' Attorney General Leslie Rutledge in co-leading a 21 State coalition to file a lawsuit at the U.S. Supreme Court against the State of Delaware. The suit being filed later today alleges violations to the Federal Dispositions Act. With this legal action, Texas and Arkansas seek to revert an estimated $150 million from the State of Delaware to their rightful owners in 21 states affected by the unlawful practice.
¨Thanks to the diligent and methodical work from the Arkansas AG Rutledge's office, it was determined how Delaware, for its financial gain, completely disregarded the Act and kept millions of dollars from Texas, Arkansas and 19 other states, ¨ said Texas Attorney General Ken Paxton. We are committed to get this money for unclaimed MoneyGram checks reverted to the States, claiming what rightfully belongs to our taxpayers.¨
In the lawsuit, Texas and Arkansas ask the Supreme Court to hear the interstate dispute, and determine the applicability of the Act. In their legal challenge, the States allege Delaware and MoneyGram have violated the Act by escheating all unpresented and uncashed MoneyGram checks to the State of Delaware instead of the State in which such money order, traveler's check or other written instrument was purchased.
WRDE reached out to Governor Jack Markell's office and received the following statement from Secretary of Finance, Thomas J. Cook:
"Today we learned of a lawsuit filed by Texas and other states relating to Moneygram's practice of remitting a specific type of abandoned property to Delaware, its state of incorporation. This issue has been the subject of two prior lawsuits, filed by Pennsylvania and Wisconsin, against Delaware in federal district courts earlier this year. Delaware disputes the allegations in those suits and, to bring some clarity to this issue, filed an action in the U.S. Supreme Court last week to resolve the outstanding legal question. Delaware cannot speculate why Texas did not intervene in the existing Supreme Court case, but is hopeful that the Supreme Court will provide all states with guidance on how companies should handle this particular type of unclaimed property in the future."
According to the lawsuit, the State of Delaware and MoneyGram have routinely ignored the law. An audit commissioned by a coalition of states determined that MoneyGram, against what is required by law, routinely rendered the amounts of money collected in unclaimed checks to the State of Delaware, and Delaware in turn kept all moneys for its financial gain. Furthermore, the audit concluded that Delaware owes over $150 million to the coalition States. Texas could be owed more than $ 10 million and if all 49 states were to claim what is rightfully theirs, the amount could reach the $400 million.
The states part of the coalition are: Arkansas, Texas, Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Carolina, Utah, West Virginia.