Office Depot Sues Delaware over Unclaimed Gift Card Law
Office Depot and an associated gift card program manager are suing Delaware officials in federal court, challenging the state’s unclaimed property law. The Florida-based retail chain and Virginia-based North American Card and Coupon Services LLC, Office Depot’s gift card operator, said Delaware’s escheat law violates the U.S. Constitution’s Fourth Amendment, which guards against unreasonable search and seizures.
The suit, filed the in the U.S. District Court for the District of Delaware, alleges that the state’s power to treat gift cards issued by the out-of-state company as unclaimed property and to conduct a more than three-year audit of the chain’s records when Delaware state law calls for a two-year examination is unconstitutional.
The suit also claims that Delaware is violating federal common law by requesting out-of-state records to which the state has no right. The state seeks to “obtain voluminous, overbroad and irrelevant information and documents from Plaintiffs, including documents concerning property under the jurisdiction of other states (not Delaware), including gift cards, gift certificates and merchandise credits issued by NACCS, a Virginia limited liability company, which, under federal law, Delaware lacks standing to claim by escheat,” according to the suit.
The suit names the following Delaware officials as defendants: Thomas Cook, secretary of finance; David Gregor, the state’s escheator; and Michelle Whitaker, abandoned property audit manager. Office Depot and the gift card operator seek a declaratory judgment and preliminary and permanent injunctions against Delaware.
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