way infringe the rights of the state to claim the property at issue here or granted some sort of unexpressed right to the holders of property do you not want so in your view it has to be a state themselves to that to the court as the constitutional mechanism to resolve but the conflict is going to exist conflict clearly exists and seems to me that the trial judge gave some very good examples as to  as to irreconcilable contact conflicts and why the texas delaware pennsylvania cases ought to be applied in this way you know the texas law rules the first priority and secretary rules as applied in delaware and i mean it did not address the situation where there was some residuum of property that was not being claimed by another state tax and those cases  suggester transfer some authority of these unclaimed properties to the holder nor did they preserve some unspoken ability of them to capture the properties through location  if there's address information of course the last known address on the debtors books and records can take it if not of the state of incorporation if those two if either of those two conditions are met the third priority  not become operative but the third rule only comes into effect and preserves those properties for either of the first two priority states in the absence of legislative action by the states it preserves that property  cases completely fact based and that's harmonious i think and an application and the kinds of decisions that would be rendered you know it's just like the rule a simple fact based inquiry is there an address is there not just for the for the purchaser for the debt or if the answer's no then it goes to the state of incorporation which is an easy fact based inquiry if neither of those conditions are met then it goes to where the place of transaction occurred also a simple factual inquiry that it doesn't require any legal issues explored or open it doesn't buy the history of both experience over the thirty that ministration of young and property the fact that it vance's it by preserving the property for four other states and for a claim by the rightful owner in contrast that may have states that may have absolutely no connection that's where the place a transaction occurred your honor so that that's where that is a connection it's simple and well but the supreme court didn't think it was much of a connection i mean they've rejected that principle several times did not reject that principles of the what i mean the what texas the state of texas was suggesting was more of a personal jurisdiction sort of analysis to a street and that works fine as long as there's only one state claiming there's more than one state that's when the supreme court invite you know western union they basically invited the states to come in and exercise the court's original jurisdiction and that's what they were addressing in texas was how do we prioritize  in that scream in that system the third priority works perfectly well that the holder is still protected against any claim of double liability no other state can also come out for the same funds instead they come to new jersey and through administrative processes that of reporting and transfer they're able to reclaim the funds from new jersey as opposed to the rule that would you know fashioned by the district court where these funds these properties so it directly advances them and supports the texas rules part of implied prevention is that it stands  the implied preemption doctrine isn't even a political here because there's two things that you can't that third priority doesn't offend one is it doesn't stand as an obstacle to texas priority rules which as the state's  explained don't even apply to this information to the situation and it's not impossible it doesn't make it difficult for it doesn't all affect the holder's ability to comply with both state and federal law holders under federal common law have no obligation under federal law it was only an ordering of priorities among the states what delaware and pennsylvania rejected was not any variation any additional things but rather the other states were trying to displace and to come up with a new rule an exception to the tax the third priority issue in this case which it was a district with invalidated works with that roy it doesn't the states and property in the first or second rule are still entitled to it doesn't affect the state's rights at all it preserves and if we if we were to disagree with the treasurer's guidance are fully questions of state law that this court should not consider and certainly if plaintiffs or others wish to raise state law claims challenging the issuance of those guys as they are free to do so in in competing state claims to be in the property   second in the event that they were to the holder it's legally indifferent to the holder which state claims it and in the event that there is a conflict if two states create different tertiary rules arguably those rules are equal status amongst themselves and it's only the state in title to it on the first or second rule that would have a reasonable argument and maybe come along maybe this is where and if other states start  is all that persuasive will be i i the third priority doesn't hasn't been on the books for all these years and it is for me it would apply to any form of property that  meets these criteria so so what other states do with stored value cards as long as they're asserting an interest in them i did and as this is a lot of most of the states in this union there's no reason to foresee or such a conflict that hasn't happened in the past when there's no reason why it should particularly once the address collection information requirement kicks in then the information available to the state as to the adverse information purchaser somewhat diminishes moving forward the importance of this provision come about your contracts c it doesn't become an implied part of the contract in fact in anderson they suggest that the contracts don't deal with the abandonment of unclaimed property because that's probably a function of the state they have also included in connecticut mutual life that the state is not bound by conditions that may be appropriate as between the parties because they act not as a party to the contract but as a conservatory there too so the conditions or the conditions that might apply as between parties to a gift card do not apply to the state acting in its conservatory but it sherry passes in the absence of  contract as to the young and property the supreme court that's been the law in this country for you know ninety years since security saves and so that the the trial court erred and this is a contract however is there no steward value card is simply to allow the purchase of merchandise not to redeem for cash but only for merchandise that has not been changed your honor between the parties that is still all it can be read is that you don't is sheet merchandise shoes she'd only be cash correct that's correct you are in the state is not a party cheeta honor so what the issuer is required to pay to the state by w when what the issue is required by contract to provide to the owner of the car is merchandise up to the face of my car sufficient to what's being protected is the entire corpus of the cases will provide some return of profit will be that is still the understanding as between the parties are those that were the top twenty five did not say that consumers who go into the store and redeem that for redeem that for for cash so all the state is doing is the state is not bound by the same conditions that might apply as between part i understand that that's that's clearly the result but my question is why does that not in some way impair the contractual rights that existed between the original parties because there's been no there was no contractual term implied or otherwise as to how the abandoned property would be disposed and that's a security savings teaches us that there is no that as the property for your benefit that might be the case but once it's been abandoned the parties cannot contract that and that's the new jersey law says jeffrey let's and let's offer as the parties you know privately contract for priva y so you have the parties not whatever terms between the purchaser and the issuer have not had implied or expressed charms about how to dispose of the un band question requirement if it had no aspect of federal law in fact it directly serves the state's interest under the first priority identified in texas and the supreme court has twice noted that problems of litigation relief because they failed to identify any constitutional or federal infirmity with the data collection of  perspective they're not your own are they actually were they if they function in different directions the place a transaction for which i would stress it is different in a place of purchase presumption because a presumption would seem to this would displace another state you'll be able to identify based on the information collected which state as he settled through it under the first priority rule says you will know the last known address based on the dems books and records and so that they do offer  question is under new jersey state law severability is whether there are so intertwined as you know whether they can operate independently here in the district or properly concluded that they do operate independently one in the absence of thank you your honors i will be focusing on the priority rules and the contract law and first it's clear the statute on its face is not consistent with the texas rules chapter twenty five violates texas it's plain and it's clear it eliminates the debtor state of incorporation and replaces it with a place of prison place a purchased presumption which was express retro actively they did nothing on a prospect of basis in prospectively chapter twenty five is gone so and not only does the contract clause which i'll address in a few me the court said that these rules that they prepared for the rules that everyone should follow and no state should supersede them the action taken here by the state violates the sovereign right of the fine point on it they said there are unwilling to decide each case over and over again based on different facts they're not looking to devise new rules and the instruction then state that if they were dissatisfied they could go to congress for a second as roger indicated the council minutes ago supreme court took great pains on three separate occasions to go through these rules and they fully understood that  state might not the steep a given a particular property they understood that as a matter of fact they built it into the who'll the secondary rule only comes into place if you don't have the address of the creditor wanted to the supreme court could of the i hear counsel suggest that the supreme court in three decisions left the door open or intended each state to come up with its own third priority rule at its  retailers location there is no expiration date it's not redeemable for cast upon the sale the money is itself the buyer only has a right to redeem this is no different than steward credit how many times have you gone to a store after maybe thirty days and those who are not going to give you your money back they say you have store credit and in either case the purchaser cannot remove from money or the purchase important interest moreover as the district court found the state is provided no reasonable justification for commendation for taking of the issue is money or profits the the perfect example is the somebody goes to a store and buys a gift card all they can do with thank you card is then they can go back to your merchandise to get service two years ago by under the state's position for rebuttal on the cross appeal very get on because half of american express prepaid and the other as you see issuers i would like to focus on two issues that are central to the cross appeal the first is not only is chapter twenty five preempted under federal common law under the texas against new jersey rules but chapter twenty five is also preempted by federal statute the credit card act of two thousand and nine and second on each of these issues preemption on federal common law as well as preemption by statute i'd like to address the appropriate scope of the injunction which i will respectfully submit leads the court to the conclusion that the two year ban when period the place of purchase presumption in the data collection required you to all of the unclaimed property provisions of chapter twenty five should come within the scope of the preliminary injunction the federal credit card act passed in two thousand and nine to address principally credit cards but also address and stored value cards has a very simple requirement a very simple preemption rule it expressly pre amps quote inconsistent unquote state laws the federal reserve board which has authority to implement regulations under the credit card act has stated that state laws are inconsistent if they quote require or permit a prohibited by threat of so that's the question on statutory preemption this chapter twenty five require or permit an act that's prohibited by federal law the credit card act requires that s expiration date at all and the credal credit card act provides that not only can't you impose an expiration date shorter than five years but if you either don't depose an expiration date or you don't properly disclose an expiration must honor the s b c indefinitely so let's put that up against chapter twenty five chapter twenty five says after two years of inactivity and of course if it is fees the isn't used at all from  date of sale that two years could be as soon as two years here to sale after two years have been an activity the proceeds of the not yet used as b c are to be paid to the state but chapter twenty five has a related provision board reg elation is but he did not do so but need not do so that is correct so how is there a conflict isn't it possible in other words to satisfy both statutory require it is possible to satisfy both deter requirements but only by paying twice if if from it and so let me go through the three steps towards that first step if american express dishonor and under the credit card act it violates chapter twenty five the only way to abide by both laws is to pay twice if the two years of inactivity in the funds to the state and then continue to honor the  the minimum five year period or if it doesn't expire indefinitely and are if i if i could ask you a question but the purpose of the credit card act was to protect the consumer absolutely not ok now the consumer hasn't lost anything under chapter twenty five because c issuer to pay twice is a violation of their process because the supreme court explicitly so held in the western union case which preceded the texas against new jersey trilogy and in specific we held that it was a violation of due if american express they have to pay in the funds to new jersey after two years of inactivity dishonors the s b c american express most certainly would be held liable for violating the credit card act and for violating the terms of its contract with the s b c owner so so if the only way to comply with both statutes is a violation of due process then the then the statute fails chapter twenty five fails under both preemption and the due process i may under your thumb under a third scenario that they could not be reclaimed from the state yes it can be reclaimed from the state but western union protects more than that western union says you should not be held liable is far west worse off under chapter twenty five but what the federal credit card act guarantees is that a consumer who has an s u v c in his pocket or her pocket can use the s p c for a minimum of five years and if it doesn't have an expiration date indefinitely can go into a store or go online and use it to purchase goods or services which is exactly what the consumer set out to do what would chapter twenty five does is  is suggest that the state will create an a reclamation process where the consumer if the consumer knows that the s that the underlying funds went to new jersey rather than some other state which the consumer might not know because they might have gotten the s v c is a gift from someone else and they might not remember where they got the s v c but if the consumer could figure out that new jersey was the right state and knew how to go through the reclamation process yes the consumer might be able to get the money back but that is of far less favorable to the consumer the consumer getting what it set out what the consumers set out to get which is the right to use the s b c in accordance with it unconstitutional place of purchase resumption whether one calls it a safe harbor to the place of purchase presumption or an alternate needs of compliance with the place of purchase presumption or sanction for not abiding by the place of purchase presumption their injury related with one another and would have stayed pretty as an interim lated statute of that nature and part is deemed unconstitutional the rest should fall unless this court can say in the new jersey supreme court's words quote with assurance if injunction is not continued the retailers will suffer a taking of their property by the implementation of chapter twenty five and secondly that this court in determining the constitutionality of chapter twenty five under texas versus new jersey should not consider the guidance issued by the treasurer subsequent to the passage of the law the reason that the guidance is a rule that meets the definition of a rule under new jersey law even if it procedure recall the chief that judge judge rules and i mean that particular point at that particular point of fact which judge will find said was that a minute on page sixty nine she says that a state agency may flush out statutory directives through under the taking clause we were quite to look at the transfer of property rights that happens when you get part of what a customer walks into one of our retailers locations in new jersey and let's say they ask for one hundred dollars gift card and the customer gives the cashier hundred dollar bill and in exchange gets an activated gift card that customer at that moment in time has transferred in its entirety that customer property rights in one hundred dollars that was used to purchas that customer no blogger has any right or any legal basis through claim or recover that purchase price that customer more importantly did not give the hundred dollars to that through the retailer to hold an astro or as a deposit or as the customer's conservative or as they would in any of the other terms that the state used on the other end of the transaction the retailer has from that moment forward complete the minion control and ownership of that one hundred dollars they can do with as they please it goes into general revenue the retailer has income and most importantly the retailer from their point of view not accept the one hundred dollars under some agreement that they're going to hold it as a deposit for the customer to be reclaimed at some later point in time is that create in the retailer the issue some right to earn a profit absolutely fails does it not moses or follow the the the retailer as part of the underlying crime contract has a right to earn a profit and doesn't earn a profit on the pros on the revenue the cast is paid for if it's their property right from that moment forward the retailer has full possession and control it's been transferred in the only the only contract that matters is what takes place the property rights transferred between the customer and the retailer at the final the gift or this purchase and the retailer has at that moment in time complete ownership the determination of the amount of the profit is subsequently determined jersey law the cost and we would have no basis to require at any point time subsequent to the purchase the the issuer to to convert that money back to cash and so the state here under the guise of  acquire something that the customer him or herself wouldn't have it meets the definition of it the takings clause because first the that the retailers have a property interest in the fund which they received at the time of the perhaps greater precision the necessary it's they're certainly not unconditional rights to the face value of the stored value card well they have a pager will promise that they've made  customer on of the card for goods and services up to the face value absolutely right so if that's the obligation then what else is there other then the right to some residual profit if not a right at least some expectancy to a profit in some residual amount between the cost of the goods provided and the amount of the card purchase that is the amount of the retailers profit in the difficult transaction of the card is redeem if you're honest question as asked my question is what more of a right does the retailer have ben that it's not a right to the face value of the card and that's what i say well i have saying that at the time the card is purchase because the customer has tender to the retailer cash knowing it can never get it back that at that point in time that money is income to the retailer and it is the present it is the it is the property of the retail what happened subsequently is up to the customer if the customer comes in and depending on what the customer purchased the profit margin of course very all across the lot will be completely wiped out for that matter they may not be any profit realized is only pending upon market condition i suppose if it was redeemed the cost of goods was equal to the face value but but by the same token if the cost of those and the state cannot change that contract in the guise of an estate law as not to say the state doesn't have a power to address that issue through on some other type of legislation with this particular statute doesn't change to emphasize to the court that the lower court was incorrect when it held the effect of the guidance basically agencies can do two things they make rules and they enfor in new jersey the definition of an administrative rule is found in the administration code and would give two minutes and it was further fleshed out by the court the metro media our position here is that even assuming that the treasurer had the authority in the enabling legislation through an act of guidance dealing with priority roles and even assuming that the policy expressed by the treasury in the guidance was reason the guidance which should still be disregarded by the court because it meets the definition of a rule under the metromedia case and as such the treasurer had an obligation to do formal notice to be for comment and to go through the hearing meets all of the all of the six points that are in the metromedia test for what constitutes an administrative rule in particular it contains a legal standard that is not otherwise clearly or obviously insurable from the enabling legislation because the guidance changed the priorities and for those for that reason and the other factors that are going to fly by the court and metromedia change the status  authority in texas or otherwise to suggest the district courts conclusion that states have that the federal common law afford say some of the permit of right to not associate unclaimed property there's nothing in actually the state's consent there is nothing in those cases to reach the abrogation of the states immunity that the district court effectuated hear the stored value cards covered by previous forms of unclaimed property x this is the modern version there of the could district court recognize that different states taking different approaches to addressing us that there's no constitutional significance between the legislatures decision to do one hundred percent of them in a property or sixty percent there's that that's a legislative choice with respect to the card act the federal reserve board specifically addressed the this issue  all of the of the major pains in this area that the property is the right of the creditor not the debtor absent a property right though there is no takings and here we have the property belong to court in their brief the only argument made by the state on the credit card act was an argument that the federal reserve board had rejected the preemption issue that's simply wrong on page forty three of our principal brief on the stored value card and we quote in full the statement of the federal reserve board on whether or not status sheet was would be preempted and i won't read it in full that would take all of my three minutes and it ends with the phrase as such the board believes it is not feasible or prudent to make a preemption determination that applies generally to all states so that the federal reserve board said very decisively we're leaving it in the hands of the courts the federal reserve board did say one thing very very clearly and that is the regulation that says that a state law which as was quoted before either requires or commits an act that's a violation of federal federal law is preempted by chapter twenty five permits s v c issue to dishonor s v c's after two years of inactivity cred the credit card act prohibits exactly that so the preemption is clear and as i noted in my main argument the only way of complying with both laws is to pay twice which is a violation of due process as help by the supreme court in western union this is to take the matter of matters under advisement court would like to have a transcript made of the oral argument and asked the both parties to share the cost of that fifty fifty and if you will check