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U.S. Supreme Court Justice Ketanji Brown Jackson issued a majority opinion, garnering unanimous support on most of the filing from the other justices.
Jackson wrote the opinion in the case of Delaware v. Pennsylvania et al., a case involving intangible property escheated to a state. The case involved a dispute between Delaware and 30 other states over which state is entitled to escheat $300 million in uncashed checks issued by MoneyGram Payment Systems.
“We hold that the FDA covers the instruments in question and thus that they should generally escheat to the State of purchase, pursuant to §2503,” Jackson wrote, adding there would be an escheatment “inequitably” if Delaware were the only state allowed to stake a claim to the funds.
“When a financial product operates like a money order— i.e., when it is a prepaid written instrument used to transmit money to a named payee—and when it would also escheat inequitably solely to the State of incorporation of the company holding the funds under our common-law rules due to recordkeeping gaps, then it is sufficiently ‘similar’ to a money order to fall presumptively within the FDA,” Jackson explained. “Such is the case with the Disputed Instruments. And nothing in the parties’ arguments, the Special Master’s Second Interim Report, or the record in these cases persuades us that the Disputed Instruments should be deemed ‘third party bank checks.’”
“The Supreme Court rejected that argument, and Delaware—a state that typically rakes in major revenue from unclaimed property—also unsuccessfully argued that it was entitled to keep the funds at issue because MoneyGram is incorporated in the state,” Law and Crime reported.
In a separate case, the U.S. Supreme Court heard arguments this week on President Joe Biden’s student loan debt forgiveness plan.
The nation’s highest court seemed to hint that they could leave Democrats heartbroken with their final ruling. The 6-3 conservative majority could employ a similar doctrine that ended the Obama administration’s landmark power plant emissions rule.
Last year before the midterm elections, Biden’s administration attempted to cancel $430 billion in student debt.
“About 45 million U.S. borrowers hold $1.6 trillion in federal student loan debt, with the typical undergraduate finishing college with $25,000 in debt, according to White House figures. Many borrowers experienced financial strain during the COVID-19 pandemic. Beginning in 2020, the administrations of President Donald Trump, a Republican, and Biden, a Democrat, repeatedly paused federal student loan payments and halted interest from accruing,” Reuters reported.
“Both administrations relied upon a 2003 federal law called the Higher Education Relief Opportunities for Students Act, or HEROES Act, that allows student loan debt relief during wartime or national emergencies. Biden relied upon the HEROES Act when he unveiled plans to cancel up to $10,000 in federal student debt for Americans making under $125,000 and $20,000 for recipients of Pell grants awarded to students from lower-income families,” the outlet added.
Several conservative justices already have shown skepticism toward allowing a federal agency to make such sweeping decisions.
“It now looms over any big agency action that the administration wants to do,” University of San Diego law professor Mila Sohoni said of the major questions doctrine. “The doctrine allows courts a great deal of leeway to pick and choose which agency actions to strike down and which to sustain.”
The justices used the doctrine since Biden took office in 2021 to block the U.S. Centers for Disease Control and Prevention from extending eviction protections for cash-strapped residential renters, stymie his COVID-19 vaccination-or-testing mandate for large businesses and restrict the Environmental Protection Agency’s power to regulate carbon emissions from power plants,” Reuters added.
Chief Justice John Roberts, writing in the EPA ruling, said the major questions doctrine “developed over a series of significant cases, all addressing a particular and recurring problem: agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted.”
Critics, however, argue that the HEROES Act was specific to student loan borrowers in the U.S. military impacted by the then-Global War on Terror and was not intended to be utilized for any other “national emergency.”
Both Justices Clarence Thomas and Neil Gorsuch have criticized the use of such orders, known as nationwide injunctions, which is what Biden did with the HEROES Act.
Last year, U.S. District Judge Mark Pittman of the District Court in Northern Texas put the giveaway plan on hold, writing, “No one can plausibly deny that it is either one of the largest delegations of legislative power to the executive branch or one of the largest exercises of legislative power without congressional authority in the history of the United States.”
“The Court is not blind to the current political division in our country. But it is fundamental to the survival of our Republic that the separation of powers as outlined in our Constitution be preserved. And having interpreted the HEROES Act, the Court holds that it does not provide ‘clear congressional authorization’ for the Program proposed by the Secretary,” he added.