Texas Files Another Lawsuit, This Time Against Another State

by | June 10, 2016

By Abby Livingston

Standing on the steps of the U.S. Supreme Court, Texas Attorney General Ken Paxton announced Thursday morning that his office is launching a lawsuit against the state of Delaware over millions of dollars he argued are owed to Texas and 20 other states.

Texas is co-leading the lawsuit with the state of Arkansas, charging that Delaware unlawfully took possession of uncashed MoneyGram checks instead of the state where the money order was purchased.

MoneyGram, a money transferring company, is based in Delaware.

“Delaware is ignoring controlling federal law in exchange for financial gain,” Paxton told reporters on Thursday. “They have hundreds of millions of dollars that rightfully belongs to taxpayers of our states.”

“Arkansas and Texas are co-leading this coalition of states to get our money back,” he added. “We are urging the Supreme Court to enforce federal law."

In a news release, the Texas attorney general’s office said an audit showed Delaware owed the states $150 million. Of that share, Paxton was unable to give a specific figure of how much belonged to Texas but estimated it was in the tens of millions.

Moneygram spokeswoman Michelle Buckalew said in a statement, "This is a dispute among states over which state has the priority to property escheated to the State of Delaware in good faith by MoneyGram. MoneyGram will comply with the decision made by the U.S. Supreme Court.”

Delaware Finance Secretary Thomas Cook suggested Texas' lawsuit is redundant.

“This issue has been the subject of two prior lawsuits, filed by Pennsylvania and Wisconsin, against Delaware in federal district courts earlier this year," Cook said in a statement. "Delaware disputes the allegations in those suits and, to bring some clarity to this issue, filed an action in the U.S. Supreme Court last week to resolve the outstanding legal question. Delaware cannot speculate why Texas did not intervene in the existing Supreme Court case, but is hopeful that the Supreme Court will provide all states with guidance on how companies should handle this particular type of unclaimed property in the future.”

Along with Texas and Arkansas, 19 other states joined the suit: Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Carolina, Utah and West Virginia.

Patrick Svitek and Aneri Pattani contributed to this report. 

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