Background on the case:
Under various state unclaimed property laws, companies are required to report and escheat unused balances on gift certificates or gift cards. Marathon Petroleum and Speedway are incorporated in Delaware, but created a gift card management company incorporated in Ohio (a state that does not escheat unused balances on gift cards) to issue their stored-value gift card programs. Following an 8-year unclaimed property audit conducted by third-party auditor Kelmar, Delaware expanded the scope of the audit to include the stored-value gift cards held by Marathon’s Ohio-based subsidiary.
Upon request for further details about the Ohio card management subsidiaries, Marathon and Speedway argued that the request went beyond Delaware’s jurisdiction and violated the federal priority rules and the 4th amendment, and filed a lawsuit in federal court in February of 2016. The district court dismissed the case in favor of Delaware, holding that the federal priority rules only applied to disputes between states and not to disputes between a private party and a state. Marathon appealed to the Third Circuit, which recently partially reversed the district court decision and remanded the matter for further proceedings. The ruling could provide a significant precedent for holders to challenge audits from Delaware and other states.
Partner, Reed Smith
Diane is a partner in Reed Smith's Chicago office, and is a member of the firm's Global Regulatory Enforcement Group. She represents clients in a wide variety of industries that are engaged in commercial litigation and arbitrations, as well as administrative, regulatory and government proceedings. Her representations include cases involving antitrust, consumer fraud, privacy, Lanham Act, trade regulation, trade secrets, unfair competition, tortious interference, healthcare, and state attorney general actions, both in individual actions and in class actions. Diane is AV-rated by Martindale-Hubbell. Read more.
National Practice Lead, Unclaimed Property Consulting, Georgeson
As the National Practice Leader for Georgeson's unclaimed property consulting practice, Pam is responsible for business development and the management and delivery of consulting services. Pam brings over 20 years of diverse and extensive experience to clients of Georgeson’s unclaimed property services. Read more.