Montgomery, AL – Alabama Attorney General Steve Marshall has announced that a bipartisan coalition of 35 states has reached a settlement with the State of Delaware, resolving the outstanding damages phase of a long-standing unclaimed property dispute before the U.S. Supreme Court. This settlement follows a unanimous 2023 decision by the Supreme Court, which sided with the coalition in determining that unclaimed official checks issued by MoneyGram Payment Systems, Inc. (“MoneyGram”) are governed by the Federal Disposition Act.
The dispute began when several states, including Alabama, discovered that Delaware was advising MoneyGram to allocate unclaimed official checks to Delaware, rather than returning them to the states where the checks were purchased. This misapplication of federal law prompted the coalition of states to take legal action against Delaware, leading to the Supreme Court’s decision and the subsequent settlement.
As a result of the settlement, more than $190 million in unclaimed property will be distributed among the coalition states. Delaware will transfer over $102 million in unclaimed property, originally reported to Delaware by MoneyGram from 2011 to 2017, to the coalition states. The distribution will be based on where each monetary instrument was purchased. Additionally, approximately $89 million, which MoneyGram had deposited in a litigation escrow account from 2018 to 2022, along with earned interest, will be divided among all 50 states based on the place of purchase for each instrument.
Attorney General Marshall expressed satisfaction with the outcome, stating, “After the Supreme Court’s decision, states now have a clear process for unclaimed property allowing each jurisdiction to determine how best to handle those funds. We are grateful that our coalition’s original action in the Supreme Court led to this great result for Alabama and its citizens.”
The settlement effectively concludes the remaining damages phase of the consolidated cases of State of Delaware v. Commonwealth of Pennsylvania et al., and State of Arkansas, et al. v. State of Delaware. Under the terms of the agreement, states will assume custody and responsibility for returning any property received through the settlement or from the escrow account to rightful owners, including paying any claims for the property.
In addition to Alabama, the states of Arkansas, Pennsylvania, California, Texas, and Wisconsin played key roles in the original action against Delaware. The coalition was joined by 29 other states: 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.
