In Justice Jackson's first ruling, US Supreme Court decides MoneyGram case

MoneyGram International

28/02/2023 17:14

By Nate Raymond
       Feb 28 (Reuters) - In the first ruling written by
President Joe Biden's appointee Justice Ketanji Brown Jackson,
the U.S. Supreme Court on Tuesday sided with 30 states that
argued that Delaware had no right keep hundreds of millions of
dollars in uncashed MoneyGram  MGI.O  checks for itself.
    The ruling authored by Jackson, who was confirmed last year
by the Senate as the newest of the nine justices, was unanimous.
Jackson wrote that the unclaimed funds generally belonged to the
states where the MoneyGram financial products were purchased and
not to Delaware, the state where the world's second-largest
money transfer company is incorporated.
    Many of the largest U.S. companies are incorporated in
Delaware. For the state, unclaimed property has become a big
money maker. It accounted for $448.6 million of Delaware's $5.4
billion in revenue in 2021, making it the third-largest source
of revenue.
    Jackson, the first Black woman to serve as a justice, is one
of three liberal members of a court with a 6-3 conservative
majority. Jackson is the only justice appointed to the court by
Biden, a Democrat. His Republican predecessor Donald Trump was
able to appoint three conservative justices during his four
years in office. Jackson replaced retiring liberal justice
Stephen Breyer and was sworn in to the role in June.
    In the ruling, Jackson wrote that generally a state under
its power called "escheatment" can take possession of abandoned
property if it is located within the state.
    But in the case of MoneyGram checks, Jackson said a federal
law known as the Disposition of Abandoned Money Orders and
Traveler's Checks Act enacted in 1974 governs and generally
gives the rights to the states where the checks were bought.
    Under that law, money orders that go uncashed can be
generally taken by the state in which they are purchased.
    Delaware contended the MoneyGram financial products at
issue, which were known as "official checks," did not qualify
under that law as "money orders" or "other similar written
instruments." Those checks are prepaid financial instruments
that can be bought at banks or credit unions that can be used to
transfer funds to a named payee.
    From 2002 to 2017, Delaware took possession of $250 million
in uncashed MoneyGram checks that were bought around the
country, even though only $1 million was bought in Delaware
itself, Jackson noted.
    A group of states including Pennsylvania, Wisconsin and
Arkansas took Delaware to court, arguing that the 1975 law
applied, and an independent arbiter tasked by the Supreme Court
to conduct an initial assessment of the case at first sided
them.
    But the arbiter, U.S. Circuit Judge Pierre Leval, later
agreed with Delaware's view that they were not legally money
orders but were "third-party bank checks."
    Jackson rejected that position, saying the financial
instruments were similar to money orders in function and
operation by allowing prepayment of a specified amount to a
specific person.
    "And none of the differences Delaware identifies relates to
the statutory text or ordinary meaning of a money order,"
Jackson wrote.
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
U.S. Supreme Court's Jackson emerges as energetic questioner on
first day     urn:newsml:reuters.com:*:nL1N3140ZX
Liberal Justice Jackson joins a rightward-moving U.S. Supreme
Court      urn:newsml:reuters.com:*:nL1N30X1YX
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Nate Raymond in Boston; Editing by Will Dunham)
 ((Nate.Raymond@thomsonreuters.com and Twitter @nateraymond;
347-243-6917))