Texas, 20 other states sue Delaware over millions in unclaimed money


AUSTIN (KXAN) — The states of Texas and Arkansas are leading a 21-state coalition suing the state of Delaware over millions in unclaimed official checks Texas Attorney General Ken Paxton says have been illegally seized.

Paxton announced the lawsuit outside the U.S. Supreme Court in Washington Thursday.

He says tens of millions of dollars of official checks (such as travelers checks and money orders) go unclaimed each year.

The lawsuit claims Delaware began violating federal law at least four or five years ago when they told companies incorporated in their state to turn over unclaimed official checks to the state, which collected the money.

In February of 2015, Paxton says an auditor found Delaware had received more than $150 million since starting to collect the money that should have gone to other states suing. If all 49 other states were to join the lawsuit, he says the amount could reach $400 million. Texas, he says, could be owed more than $10 million.

“The bottom line is simple, Delaware is ignoring controlling federal law in exchange for financial gain,” Paxton said. “They have hundreds of millions of dollars that rightfully belongs to taxpayers of our states.”

Paxton says Delaware’s action violates the Federal Disposition Act passed in 1974, which requires financial institutions to turn over unclaimed official checks to the state in which they were issued.

The lawsuit asks the U.S. Supreme Court to hear the case and determine if Delaware is breaking the law.

The states suing Delaware are: Texas, Arkansas, Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Carolina, Utah and West Virginia.

Paxton says other states, including Pennsylvania and Wisconsin, have filed separate lawsuits in federal district courts previously.

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