Monday, May 4, 2015

A "Star Wars Day" Update

Today, May 4th, is Star Wars Day ("May the Fourth be with you").  Little known fact:  According to the State of Texas unclaimed property database.  The Lone Star state is in possession of funds for Darth Vader (last-known address:  The Death Star).

Apparently, mail sent to the Death Star was returned as undeliverable.  Must have been after the Battle of Yavin.

Happy Star Wars Day!





Wednesday, April 29, 2015

Legislative Updates Relating to Life Insurance, Savings Bonds, and Dormancy Periods


Death Master File SearchesIdaho Senate Bill 1023 was enacted in March, to come into effect on July 1, 2016.  Arkansas Senate Bill 768, a similar bill, was enacted earlier this month, to come into effect June 30, 2016.  Utah House Bill 168 comes into effect in July of this year.   These laws require, among other things, life insurers to do a search of in-force policies against the Social Security Death Master File on a semiannual basis.

Extension of State Unclaimed Property Acts to U.S. Savings Bonds -- Indiana Senate Bill 282 and Arkansas Senate Bill 356 apply the unclaimed property acts in those states to U.S. savings bonds that have stopped earning interest, or matured, respectively.

Dormancy Period Changes -- Arkansas House Bill 1782 reduces the dormancy period for certain corporate bonds, deposit accounts and mineral proceeds from 5 years to 3 years.




Wednesday, March 18, 2015

Unclaimed Property Provides Boost to South Carolina Budget

The Charleston Post & Courier has an article about the boost provided to South Carolina's budget as a result of unclaimed property collections.  Just as lawmakers were putting the finishing touches on the state budget, State Treasurer Curtis M. Loftis, Jr. announced that unclaimed property estimates for the year would rise by nearly $50 million.  The article notes that some of the excess resulting from unclaimed property and other increases was used to reduce cuts to educational and hospital programs.


Friday, March 13, 2015

Court Renders Federal Preemption Decision in Temple Inland - Case to Continue

Earlier this summer a company called Temple-Inland commenced a lawsuit against the State of Delaware, challenging the findings of a Kelmar-initiated unclaimed property audit, especially as to how estimated liabilities are calculated.  In particular, Temple-Inland alleged that Delaware made an audit demand in excess of $1 million for estimated historical unclaimed property liabilities after having identified only about $150 in actual liability.  Delaware promptly moved to dismiss that litigation (that is, that the court should not even hear the dispute) and Temple-Inland responded by asking the Court for summary judgment (an order that Plaintiff is entitled to judgment as a matter of law, without the need for a trial) on the grounds of federal preemption.

Wednesday afternoon, the trial court issued its decision on the dueling motions.  In sum, both parties' attempts for a quick knockout were largely rejected, and the case will continue.  The one substantive decision that the Court made relates to federal preemption (i.e., the argument that federal law displaces contrary state law).  The Court expressly rejected T-I's argument that federal preemption prevented Delaware from employing estimation to assess historical unclaimed property liabilities.

The Federal Preemption Decision
In numerous cases, the Supreme Court has held that a state's jurisdiction to take custody of unclaimed property relates to the debtor-creditor relationship between the holder and owner of unclaimed property.  In Delaware v. New York, for example, the Court held that the determination of which state was entitled to escheat property started with a determination of the "precise debtor-creditor relationship" that gave rise to the property.   In the T-I case, Temple Inland argued that the use of estimation to calculate unclaimed property liabilities (where no exact debtor-creditor relationship is shown) was preempted (i.e., prohibited) by federal authority relying on the existence of this debtor-creditor relationship, and similar authority refusing to use statistical estimates to apportion unclaimed property among the states in lieu of the Texas v. New Jersey priority rules.  T-I also argued that, although the Texas v. New Jersey and Delaware v. New York holdings arose in the context of disputes between states, the Supreme Court's holdings in those cases were nonetheless applicable to disputes between a state and a holder.

The Delaware District Court rejected this argument and dismissed T-I's federal preemption claim.  In so doing, the court reasoned that the since the "stated purpose" of the Texas v. New Jersey priority rules was to "apply to disputes among States, not to disputes between private parties and States" there was no relevant federal law to preempt Delaware's enforcement of its unclaimed property act.  Accordingly, the District Court avoided the need to determine whether estimation itself was preempted via federal law by finding, in effect, that there was no applicable federal law at all.  The court's holding regarding federal preemption necessarily resulted in the denial of T-I's motion for summary judgment.

The Case Will Continue
As to the remainder of T-I's claims, the court held that the complaint stated a set of facts that, if proven, might entitled T-I to relief, and thus denied the remainder of Delaware's motion to dismiss.  The case will now continue.

Friday, February 20, 2015

Friday Lost + Found: Happy Unclaimed Property Day and Kentucky & California Questions

Kentucky State Treasurer Defends His Post -- Kentucky.com has an article about Kentucky Treasurer Todd Hollenbach's defense of the position of State Treasurer.  Although term limits prevent Hollenbach from running again, a according to Kentucky.com some candidates for the position of State Treasurer seek to abolish the office - arguing that the various tasks can be handled by other government departments.

California Legislative Analysts' Office: California Can Do More to Return Unclaimed Property -- The LA Times is reporting on a release by the California Legislative Analyst's Office (LAO) noting a potential conflict between the California Controller's Office's obligation to return unclaimed money to California citizens, and the revenue generated by the more than $400 million in revenue that unclaimed funds contribute to the state budget.

February 18 Was Unclaimed Property Day in South Carolina -- According to WMBF, February 18 was declared "Unclaimed Property Day" in South Carolina by that state's General Assembly and State Treasurer Curtis Loftis.  To be your own Santa in South Carolina, you can check the Treasury;s "Palmetto Payback" program here.