DOVER, Del. (AP) — A federal judge has blasted Delaware's practice of collecting abandoned property in a ruling in a lawsuit filed by a subsidiary of Memphis-based International Paper.
In a ruling issued Tuesday, U.S. District Court Judge Gregory Sleet said Delaware's abandoned property, or escheat, practices violate due process and amount to a game of "gotcha" that "shocks the conscience."
The ruling came in a lawsuit in which packaging company Temple-Inland Inc. challenged Delaware's claim to almost $1.4 million in purported uncashed accounts payable and payroll checks.
Abandoned property is a critical source of funding for Delaware's government, amounting to about half a billion dollars annually and representing the state's third-largest revenue category.
State Finance Secretary Tom Cook did not immediately return a cell phone message seeking comment Tuesday evening.