Delaware v. New York

PETITIONER: Delaware
RESPONDENT: New York
LOCATION: Jackson Circuit Court

DOCKET NO.: 111 ORIG
DECIDED BY: Rehnquist Court (1991-1993)
LOWER COURT:

CITATION: 507 US 490 (1993)
ARGUED: Dec 09, 1992
DECIDED: Mar 30, 1993

ADVOCATES:
Bernard Nash - in support of the Special Master's Report
Dennis G. Lyons - for the plaintiff
Jerry Boone - for the defendant

Facts of the case

Question

Media for Delaware v. New York

Audio Transcription for Oral Argument - December 09, 1992 in Delaware v. New York

Audio Transcription for Opinion Announcement - March 30, 1993 in Delaware v. New York

William H. Rehnquist:

The opinion of the Court in No. 111 original, Delaware against New York will be announced by Justice Thomas.

Clarence Thomas:

This, in a state dispute, is before the Court under our original jurisdiction.

At issue are unclaimed securities distributions held by intermediaries in their own names on behalf of beneficial owners cannot be identified or located.

New York escheated $360 million in such funds without regard to the beneficial owner's last known address or in intermediary's State of incorporation.

Delaware initiated this original action alleging wrongfully escheat.

A Special Master recommended that the right to escheat be awarded to the State of the securities issue as principal executive offices.

Both Delaware and New York lodged exceptions.

In an opinion filed with the Clerk today, we sustain the exceptions in part overruled the exceptions in part and remand.

The State in which an intermediary is incorporated has a right to escheat in this case.

We would ordinarily award the right to escheat to the State in which a creditor has a last known address, but because a beneficial owners cannot be located, we award the right to escheat to the State in which each intermediary as debtor is incorporated.

We therefore, sustain Delaware's and New York's exceptions to the Master's contrary conclusion.

We also sustain Delaware's exception to the Master's proposal to award the right to escheat to the State in which the debtor has its principal executive offices rather than to the State in which the debtor is incorporated.

Finally, we reject New York's claim to a right to escheat based on statistical evidence that most of the relevant creditors are brokers with New York addresses.

A State wishing to claim the right to escheat must prove transaction by transaction that a particular creditor had a last known address within that State.

Justice White has filed a dissenting opinion in which Justice Blackmun and Justice Stevens have joined.