A quick update on the continuing New Jersey gift card law litigation. As you probably know, a variety of New Jersey gift card issuers filed a lawsuit in federal court, seeking to have parts of New Jersey's new gift card law overturned. Last month, the a federal court in New Jersey issued a preliminary injunction prohibiting the state from enforcing at least two provisions of the new law: (1) the law's presumption that all cards sold in New Jersey are escheatable to New Jersey; and (2) the law's requirement that merchandise-only gift cards issued prior to the act be escheatable in cash.
We say "at least" two provisions of the law have been enjoined because the parties to the lawsuit are currently disputing the scope of the federal court's injunction. In particular, the parties disagree as to whether the new law's requirement that gift card issuers obtain purchaser or owner zip code information is enforceable. New Jersey takes the position that the zip code requirement is unaffected, the issuers take the position that the provision can't be enforced. An application has been made to the court to settle the dispute, but no decision has been made.
As you may have noticed, this happens to be a busy time for gift card issuers. In light of the uncertainty, the New Jersey Attorney General's Office filed a letter with the federal court yesterday, which informs the court that "the Treasurer has extended the date for issuers to implement a system or process capable of recording and maintaining the purchaser's zip code until no earlier than January 18, 2011."
A formal announcement should be forthcoming from the Treasury Department