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U.S. Supreme Court to Hear Rutledge-led Coalition October 3, 2022

Will Argue Millions Owed to Arkansas and Other States in Unclaimed MoneyGram Funds

LITTLE ROCK – Arkansas Attorney General Leslie Rutledge issued a statement following the U.S. Supreme Court’s announcement scheduling oral argument in Arkansas v. Delaware. The announcement comes after the U.S. Supreme Court Special Master, Judge Pierre N. Leval, submitted a report recommending that the Supreme Court rule in favor of a bipartisan, 29-state coalition led by Attorney General Rutledge and the attorneys general of California, Texas and Wisconsin. The Special Master held that Delaware improperly received more than $200 million dollars in unclaimed funds that MoneyGram Payment Systems, Inc., should have sent to other states. If the Supreme Court adopts the report’s recommendation, Judge Leval will then conduct further proceedings to determine precisely how much money Delaware owes Arkansas and each of the 28 other states in its coalition. Arkansas is owed upwards of $650,000 on unclaimed funds.

“I will fight for every dollar that belongs to the people of Arkansas,” said Attorney General Rutledge. “Delaware has been holding Arkansans’ money hostage for years. I look forward to representing the majority of states before the U.S. Supreme Court and bringing us closer to a total victory and restitution.”

The dispute between the Arkansas-led coalition and Delaware centers around which state is entitled to the funds payable on unclaimed “official checks” sold by MoneyGram, a money transfer services company that operates in all 50 states and internationally. At Delaware’s behest, hundreds of millions of dollars in unclaimed MoneyGram official checks have been wrongfully turned over to Delaware. Misapplying federal law, Delaware instructed MoneyGram to turn over unclaimed official checks only to the State of Delaware, because MoneyGram is incorporated under Delaware law, rather than the states where the checks were purchased.

In 2015, an independent auditor completed an examination of unclaimed “official checks” from MoneyGram and concluded that over $200 million was owed to other states, but MoneyGram had improperly paid it to Delaware. According to the audit, Arkansas was owed over $650,000 payable on unclaimed “official checks.”

In 2016, the Arkansas-led coalition sued Delaware in the U.S. Supreme Court, which can hear lawsuits between states without waiting for a lower court decision. Arkansas and the other states argued that the federal Disposition of Abandoned Money Orders and Traveler’s Checks Act required MoneyGram to return each unclaimed official check to the state where it was sold, not to the state of MoneyGram’s incorporation. As a result, Arkansas’s coalition asked the Supreme Court to order Delaware to repay all the unclaimed funds that it had wrongfully received from MoneyGram.

The Supreme Court appointed Judge Leval, who sits on the U.S. Court of Appeals for the Second Circuit, to serve as Special Master. His duties included taking evidence and issuing a report recommending how the Supreme Court should rule in the case. The Supreme Court will now hear oral argument and decide whether to adopt Judge Leval’s recommendation. 

The coalition is led by Arkansas, with a leadership group from California, Texas and Wisconsin. The other states in the coalition are Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Utah, Virginia, Washington, West Virginia and Wyoming. Pennsylvania is also allied with Arkansas’s coalition but is represented by separate counsel.

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