American Express Prepaid Card Management Corporation v. Sidamon-Eristoff, et al.

Case Updates

The Third Circuit ruled that a New Jersey law retroactively requiring issuers of gift cards to turn over the unused portion of the cards to the state violated the Contracts Clause. The court did not reach the Takings Clause issue because it ruled that the law violates the Contracts Clause.

NCLC urged the Third Circuit to reject a New Jersey law forcing issuers of gift cards to turn over the unused portion of the cards to the state. About $7 billion in gift cards go unused each year, and a bevy of cash-strapped state legislatures have passed or are considering “escheatment” laws similar to the New Jersey law at issue in this case. In its brief, NCLC argued that the law violates the “Taking Clause” of the Constitution. This case will affect all gift card issuers who do business in New Jersey, Delaware, or Pennsylvania.