2012 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-5-2012

American Express Travel Relate v. Andrew

Sidamon-Eristoff

Precedential or Non-Precedential: Precedential

Docket No. 10-4328

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

______

No. 10-4328

______

AMERICAN EXPRESS TRAVEL RELATED SERVICES, 

INC.,

Appellant

v.

ANDREW P. SIDAMON-ERISTOFF,

as Treasurer of the State of New Jersey;

STEVEN R. HARRIS, as Administrator of

Unclaimed Property of the State of New Jersey

______

On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 3-10-cv-04890)

District Judge: Honorable Freda L. Wolfson

______

Argued September 12, 2011

Before: SCIRICA, SMITH and FISHER, Circuit Judges.

(Filed: January 5, 2012)
2

Philip R. Sellinger (Argued)

Louis Smith

Greenberg Traurig

200 Park Avenue

P.O. Box 677

Florham Park, NJ 07932

Richard M. Zuckerman (Argued)

SNR Denton US

1221 Avenue of the Americas, 24th Floor

New York, NY 10020

Counsel for Appellant

Robert T. Lougy (Argued)

Gregory A. Spellmeyer

Office of Attorney General of New Jersey

25 Market Street

Richard J. Hughes Complex

Trenton, NJ 08625

Counsel for Appellees

______

OPINION OF THE COURT

______

FISHER, Circuit Judge.

American Express Travel Related Services (“Amex”) 

challenges the constitutionality of 2010 N.J. Laws Chapter 25 

(“Chapter 25”), which amended New Jersey’s unclaimed 

property statute, N.J. Stat. Ann. § 46:30B (2002), and 

retroactively reduced the period after which travelers checks 
3

are presumed abandoned from fifteen years to three years.1

I. Background and Procedural History

 

Amex filed a motion for preliminary injunction against New 

Jersey Treasurer Andrew P. Sidamon-Eristoff (“Treasurer”) 

and New Jersey Unclaimed Property Administrator Steven R. 

Harris (collectively, “New Jersey” or “State”) in the District 

Court on the grounds that Chapter 25’s provision reducing the 

abandonment period for travelers checks violates the Due 

Process Clause, the Contract Clause, the Takings Clause, and 

the Commerce Clause of the United States Constitution. The 

District Court denied Amex’s motion, holding that Amex 

failed to show a likelihood of success on the merits of its 

claims. Amex filed a timely appeal. For the reasons 

discussed below, we will affirm the District Court’s order.

Amex Travelers Cheques (“TCs”)2

 1 This opinion addresses the challenge brought against 

2010 N.J. Laws Chapter 25 (“Chapter 25”) with respect to 

travelers checks. We discuss the appeal filed by New Jersey 

Retail Merchants Association, New Jersey Food Council, and 

American Express Prepaid Card Management Corporation, 

seeking to enjoin Chapter 25 with respect to stored value 

cards (“SVCs”), in a separate opinion.

are preprinted 

checks for amounts ranging from $20 to $100. Each one is 

identifiable based on a unique serial number. Amex 

maintains that the TCs never expire, so they are contractually 

obligated to honor the TCs once they are issued. Amex sells 

TCs for the face value amount, normally through a third party 

2 We use “TCs” to refer to Amex Travelers Cheques 

specifically, as opposed to travelers checks generally.
4

bank or travel service. The third party can charge a small fee, 

which it retains, but Amex does not charge a fee beyond the 

face value of the TCs. Amex claims that it can sell TCs 

without charging a fee because its contractual relationship 

with TC owners gives Amex the right to retain, use, and 

invest funds from the sale of TCs from the date of sale until 

the date the TCs are cashed or used. Amex asserts that this 

right to invest the funds is integral to the contract between TC 

owners and Amex, and that it relies on these invested funds to 

remain profitable in the TC business.

When a TC is sold, the third party seller transmits the 

funds to Amex and provides Amex with the TC’s serial 

number, its amount, and the date and place of sale. 

Generally, the seller does not provide the purchaser’s name, 

address, or any other identifying information. When Amex 

sells TCs directly to consumers, it retains only the same 

information that it receives from third party sellers.

All fifty states, and the District of Columbia, have a set 

of unclaimed property laws (often called escheat laws), most 

of which are based on a version of the Uniform Unclaimed 

Property Act (“UUPA”). These laws require that once 

property has been deemed abandoned, the holder turn it over 

to the state while the original property owner still maintains 

the right to the property. The purpose of unclaimed property 

laws is to provide for the safekeeping of abandoned property 

and then to reunite the abandoned property with its owner. 

Usually, before turning over abandoned property to the state, 

the holder must attempt to return the property by contacting 

the owner, using the owner’s name and last known address. 

If the holder is unable to return the property to the owner and 

turns it over to the state, the holder provides the state with the 

name and last known address of the owner. The holder is no 
5

longer liable to the property owner once it turns over the 

property to the state. The state then makes an effort to reunite 

the owner with the property. Under New Jersey’s custodial 

escheat statute, the rightful owner may file a claim to recover 

the property at any time after the property is turned over to 

the State.

However, travelers checks operate differently because 

issuers like Amex generally do not obtain the names or 

addresses of the purchasers. Thus, the requirement that 

holders send notice to the owner at the last known address 

before turning over such property to the State does not apply 

to travelers checks. Travelers check issuers are also 

exempted from the requirement to include the owner’s name 

and last known address on unclaimed property reports. N.J. 

Stat. Ann. § 46:30B-47 (2002). Amex sends only the serial 

number, amount, and date of sale when TCs are sent to the 

State as unclaimed property. If Amex determines that a 

cashed TC has a serial number indicating that it has been paid 

to a state as unclaimed property, Amex seeks to reclaim those 

funds from that state. In New Jersey, when such claims are 

filed, the Treasurer returns the funds with interest.
6

Until recently, all fifty states had a fifteen-year 

abandonment period for travelers checks.3

On September 23, 2010, Amex filed a complaint in the 

United States District Court for the District of New Jersey, 

alleging that Chapter 25 violated the Due Process Clause, the 

Contract Clause, the Takings Clause, and the Commerce 

Clause of the Constitution. Amex also filed a motion for 

 But on June 24, 

2010, the New Jersey Legislature passed Chapter 25, which 

shortened the abandonment period for travelers checks from 

fifteen years to three years. N.J. Stat. Ann. § 46:30B-11 

(2010). The purpose of the statute was to “protect New 

Jersey consumers from certain commercial dormancy fee 

practices and to modernize New Jersey’s unclaimed property 

laws.” State of N.J. Assemb. Budget Comm., Statement to 

Assembly, No. 3002, 214th Leg., at 1 (June 24, 2010). Under 

the State’s unclaimed property law, after an issuer transfers 

the presumed abandoned property to the State, the property is 

then administered through New Jersey’s unclaimed property 

system. The State preserves the property in perpetuity for the 

owner, N.J. Stat. Ann. § 46:30B-9 (2002), or for another state 

that can prove a superior right of escheat. N.J. Stat. Ann.

§ 46:30B-81 (2002).

 3 Recently, Kentucky also shortened its abandonment 

period for travelers checks from fifteen years to seven years. 

Although Amex successfully challenged Kentucky’s statute 

in federal district court on substantive due process grounds, 

Am. Express Travel Related Serv. v. Kentucky, 597 F. Supp. 

2d 717 (E.D. Ky. 2009), the United States Court of Appeals 

for the Sixth Circuit reversed and remanded, holding that the 

statute withstood rational basis scrutiny. Am. Express Travel 

Related Servs. v. Kentucky, 641 F.3d 685 (6th Cir. 2011).
7

preliminary injunction, seeking to enjoin the State from 

enforcing Chapter 25. On November 13, 2010, the District 

Court denied Amex’s motion for preliminary injunction with 

respect to travelers checks. Amex filed a timely appeal.

II. Standard of Review

“We generally review a district court’s [grant or]

denial of a preliminary injunction for abuse of discretion[,]

but review the underlying factual findings for clear error and 

examine legal conclusions de novo.” Brown v. City of 

Pittsburgh, 586 F.3d 263, 268 (3d Cir. 2009) (citation 

omitted). “We have jurisdiction to review the order [granting 

or] denying a preliminary injunction under 28 U.S.C. 

§ 1292(a)(1).” Id. at 268 n.6.

III. Discussion

A court must consider four factors when ruling on a 

motion for preliminary injunction: “(1) whether the movant 

has shown a reasonable probability of success on the merits; 

(2) whether the movant will be irreparably injured by denial 

of the relief; (3) whether granting preliminary relief will 

result in even greater harm to the nonmoving party; and 

(4) whether granting preliminary relief will be in the public 

interest.” Crissman v. Dover Downs Entm’t Inc., 239 F.3d 

357, 364 (3d Cir. 2001). The moving party’s failure to show 

a likelihood of success on the merits “must necessarily result 

in the denial of a preliminary injunction.” In re Arthur 

Treacher’s Franchisee Litig., 689 F.2d 1137, 1143 (3d Cir. 

1982). We evaluate the likelihood of success on the merits of 

Amex’s four constitutional claims accordingly.
8

A. Substantive Due Process Clause

The Due Process Clause of the Fourteenth Amendment 

provides that no state shall “deprive any person of life, 

liberty, or property, without due process of law.” U.S. Const. 

Amend. XIV, § 1. It is well established that the Due Process 

Clause contains both a procedural and substantive 

component. Nicholas v. Pa. State Univ., 227 F.3d 133, 139 

(3d Cir. 2000) (citing Planned Parenthood of S.E. Pa. v. 

Casey, 505 U.S. 833, 846-47 (1992)). Substantive due 

process contains two lines of inquiry: one that applies when a 

party challenges the validity of a legislative act, and one that 

applies to the challenge of a non-legislative action. Id. In a 

case challenging a legislative act, as here, the act must 

withstand rational basis review. Id. To do so, the defendant 

must demonstrate (1) the existence of a legitimate state 

interest that (2) could be rationally furthered by the statute. 

Id. (citation omitted). The rational basis test, although “not a 

toothless one,” Mathews v. Lucas, 427 U.S. 495, 510 (1976), 

requires significant deference to the legislature’s decisionmaking and assumptions. Sammon v. N.J. Bd. of Med. 

Exam’rs, 66 F.3d 639, 645 (3d Cir. 1995). “[T]hose attacking 

the rationality of the legislative classification have the burden 

‘to negative every conceivable basis which might support 

it[.]’” FCC v. Beach Commc’ns, Inc., 508 U.S. 307, 315 

(1993) (quoting Lehnhausen v. Lake Shore Auto Parts Co., 

410 U.S. 356, 364 (1973)).

Amex argues that the sole purpose behind enacting 

Chapter 25 was to raise revenue for the State, which is not a 

legitimate state interest. But under rational basis scrutiny, a 

court’s inquiry is limited to whether the law “rationally 

furthers any legitimate state objective.” Malmed v. 

Thornburgh, 621 F.2d 565, 569 (3d Cir. 1980) (emphasis 
9

added). It is enough that the State offers a conceivable 

rational basis for its action, and “[t]he court may even 

hypothesize the motivations of the state legislature to find a 

legitimate objective promoted by the provision under attack.” 

Id. (citation omitted). It is “constitutionally irrelevant 

whether this reasoning in fact underlay the legislative 

decision . . . .” Fleming v. Nestor, 363 U.S. 603, 612 (1960).

The State submits that Chapter 25 was enacted to 

modernize the State’s unclaimed property laws by making the 

abandonment period for travelers checks more consistent with 

that of other property. The State also argues that Chapter 25 

provides greater protection for property owners. They reason 

that shortening the abandonment period will facilitate the 

transfer of the property from a private company to the State at 

an earlier time; this would provide greater protection for 

property owners because private companies are subject to 

greater economic instability compared to a perpetually 

solvent government entity. In general, taking custody of 

abandoned property is a legitimate state interest. See 

Delaware v. New York, 507 U.S. 490, 497 (1993) (“States as 

sovereigns may take custody of or assume title to abandoned 

personal property. . . .”). We agree that, as a corollary, the 

State has a legitimate interest in protecting its property 

owners and modernizing its unclaimed property laws to 

promote consistency. Accordingly, we reject Amex’s 

contention that Chapter 25 lacks a legitimate state interest.

Amex contests that even if there are legitimate state 

interests, Chapter 25 fails to rationally further these goals. 

Because Amex has the burden of rebutting every conceivable 

rational basis, see Beach Commc’ns, 508 U.S. at 315, we 

examine each of Amex’s arguments in turn.
10

Amex first argues that shortening the abandonment 

period has no rational relationship to increasing property 

protection because 90% of travelers checks not used after 

three years are used within fifteen years. Thus, Amex 

contends, it is irrational to conclude that travelers checks can 

be presumed abandoned after three years. But the statistics 

also show that over 96% of all travelers checks are redeemed 

within three years. Decl. of Susan Helms at 3, Am. Express 

Travel Related Servs., 755 F. Supp. 2d 556 (D. N.J. 2010) 

(No. 10-4328). Even if Amex disagrees with the State 

Legislature’s presumption that travelers checks unredeemed 

after three years are abandoned, the rational basis test does 

not require mathematical precision in the legislature’s 

decisions. See Heller v. Doe, 509 U.S. 312, 321 (1993). 

“[L]egislative choice . . . may be based on rational 

speculation unsupported by evidence or empirical data.” 

Beach Commc’ns, 508 U.S. at 315. Thus, Amex’s argument 

is insufficient to overcome rational basis scrutiny.

Amex next argues that shortening the abandonment 

period for travelers checks does not further Chapter 25’s 

stated purpose of modernizing the State’s unclaimed property 

laws. But the State has a conceivable legitimate interest in 

making its unclaimed property laws more consistent for ease 

of administration. Chapter 25 accomplishes this by making 

the abandonment period for travelers checks the same as 

checks, drafts, and other similar negotiable instruments. See

N.J. Stat. Ann. § 46:30B-16 (2002). Amex responds that 

unclaimed property laws require establishing different time 

periods based upon the nature of the property, so consistency 

is not a rational basis for selecting an abandonment period. 

But state laws cannot be invalidated based on mere policy 

disagreements. See Casey, 505 U.S. at 849 (holding that 
11

under rational basis scrutiny, courts are not free to invalidate 

state law because they disagree with the underlying policy 

decisions). Because modernizing unclaimed property laws 

through consistent abandonment periods is a conceivable 

rational basis for enacting Chapter 25, Amex fails to 

overcome rational basis scrutiny.4

In addition, the State Legislature could have rationally 

believed that the shorter abandonment period better protected 

customers by giving custody of the property to the State at an 

earlier time. Conceivably, there are benefits to having 

property safeguarded by a perpetually-solvent sovereign 

instead of a private entity with a greater risk of insolvency. In 

addition, the State can hold the travelers check funds in 

perpetuity and must invest unclaimed property funds more 

conservatively than Amex is required to invest its TC funds. 

Compare N.J. Stat. Ann. § 17:15C-2 (2000) (permitting 

investment in “any investment which is rated in one of the 

three highest rating categories by a nationally recognized 

statistical rating organization”) with N.J. Stat. Ann. § 46:30B75 (2000) (restricting investments of funds of Unclaimed 

Property Trust Fund to government bonds or interest-bearing 

notes or obligations). The State has offered several legitimate 

interests that justify shortening the abandonment period for 

travelers checks from fifteen years to three years. Chapter 25 

 4 Amex also contends that changing the abandonment 

period does not rationally further the statute’s purpose of 

reuniting property with its owners because the State does not 

have the names and addresses of travelers check purchasers. 

But, as discussed above, changing the abandonment period 

conceivably furthers other rational bases, which is sufficient 

for Chapter 25 to survive rational basis scrutiny.
12

rationally furthers these interests, and Amex does not meet its 

burden of defeating every conceivable basis that might 

support Chapter 25’s enactment. See Beach Commc’ns, 508 

U.S. at 315. Therefore, Amex fails to show a likelihood of 

success on the merits of its substantive due process claim.

B. Contract Clause

The Contract Clause under Article I, Section 10, 

Clause 1 of the U.S. Constitution provides that “[n]o State 

shall . . . pass any . . . Law impairing the Obligation of 

Contracts.” To ascertain whether there has been a Contract 

Clause violation, a court must first inquire whether the 

change in State law has “operated as a substantial impairment 

of a contractual relationship.” Gen. Motors Corp. v. Romein, 

503 U.S. 181, 186 (1992) (citations omitted); Nieves v. Hess 

Oil Virgin Islands Corp., 819 F.2d 1237, 1243 (3d Cir. 1987)

(citations omitted). If this threshold inquiry is met, the court 

must then determine “whether the law at issue has a 

legitimate and important public purpose.” Transport Workers 

Union of Am., Local 290 v. S.E. Pa. Transp. Auth., 145 F.3d 

619, 621 (3d Cir. 1998). If so, the court must ascertain 

“whether the adjustment of the rights of the parties to the 

contractual relationship was reasonable and appropriate in 

light of that purpose.” Id. Where the contract is between 

private parties, courts may “defer to legislative judgment as to 

the necessity and reasonableness of a particular measure.” 

U.S. Trust Co. of N.Y. v. New Jersey, 431 U.S. 1, 23 (1977). 

But this review of legislative judgment is more exacting than 

the rational basis standard applied in the due process analysis. 

Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 

717, 733 (1984).
13

Amex fails to show that Chapter 25 imposes a 

substantial impairment on Amex’s contractual relationships 

with TC owners. While Amex has the right to use and invest 

TC funds until the date the TC is cashed or sold, the duration 

of use is further subject to the lawful abandonment period set 

by unclaimed property laws. The Supreme Court has long 

established that

the contract of deposit does not give the banks a 

tontine right to retain the money in the event 

that it is not called for by the depositor. It gives 

the bank merely the right to use the depositor’s 

money until called for by him or some other 

person duly authorized. If the deposit is turned 

over to the state in obedience to a valid law, the 

obligation of the bank to the depositor is 

discharged.

Sec. Sav. Bank v. California, 263 U.S. 282, 286 (1923)

(citation omitted). In Anderson National Bank v. Luckett, the 

Supreme Court again stated that “[s]ince the bank is a debtor

to its depositors, it can interpose no due process or contract 

clause objection to payment of the claimed deposits to the 

state, if the state is lawfully entitled to demand payment . . . .” 

321 U.S. 233, 242-43 (1944) (citation omitted). Like banks, 

Amex, as a debtor to the TC purchasers, only has the right to 

use the funds received from issuing a TC until either the 

owner or the State, under a valid law, claims the funds. 

Accordingly, a state’s ability to claim abandoned property in 

the travelers check context does not ordinarily substantially 

impair travelers check issuers’ contractual relationships or 
14

otherwise violate the Contract Clause.5

In assessing substantial impairment under the Contract 

Clause, we look to “the legitimate expectations of the 

contracting parties,” U.S. Trust Co. of N.Y., 431 U.S. at 19 

n.17 (1977), and whether the modification imposes an 

obligation or liability that was unexpected at the time the 

parties entered into the contract and relied on its terms. See 

Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 247 

(1978). An important factor in determining the substantiality 

of any contractual impairment is whether the parties were 

operating in a regulated industry. See Energy Reserves Grp., 

Inc. v. Kansas Power and Light Co., 459 U.S. 400, 411 

(1983) (citing Allied Structural Steel Co., 438 U.S. at 242 

n.13). When a party enters an industry that is regulated in a 

particular manner, it is entering subject to further legislation 

in the area, and changes in the regulation that may affect its 

contractual relationships are foreseeable. See id. New Jersey 

has consistently regulated travelers checks, both generally 

under the Money Transmitter Law, N.J. Stat. Ann. § 17:15C 

(2000), and as abandoned property under the unclaimed 

property statute, N.J. Stat. Ann. § 46:30B-11 (2010). Given 

such consistent regulation, Chapter 25’s amendment of the 

abandonment period did not upset Amex’s legitimate 

 See Sec. Sav. Bank, 

263 U.S. at 285-86.

 5 This analysis differs from the analysis with respect to 

issuers of SVCs because, unlike travelers checks or bank 

deposits, SVCs are not redeemable for cash. Thus, the 

relationship between SVC purchasers and their issuers is 

distinguishable from the relationship between depositors and 

banks, which are required to turn over the value of the deposit 

in cash upon the depositor’s demand.
15

expectations as the contracting party or impose an unexpected 

change in its contractual obligations. U.S. Trust, 431 U.S. at 

19 n.17 (stating “a reasonable modification of statutes . . . is 

much less likely to upset expectations than a law adjusting the 

express terms of an agreement”).

Amex next claims that the fifteen-year abandonment 

period was an implied term of the contract for TCs that were 

sold prior to the enactment of Chapter 25. It is true that the 

terms of a contract often include the state law relating to the 

contract. See Farmers & Merchs. Bank of Monroe v. Fed. 

Reserve Bank of Richmond, 262 U.S. 649, 660 (1923). But 

not all “state regulations are implied terms of every contract 

entered into while they are effective, especially when the 

regulations themselves cannot be fairly interpreted to require 

such incorporation.” Gen. Motors, 503 U.S. at 189. And 

“state laws are implied into private contracts regardless of the 

assent of the parties only when those laws affect the validity, 

construction, and enforcement of contracts.” Id. (citation 

omitted). Critically, the adjustment of the abandonment 

period merely shortens the time during which Amex can 

invest the TC funds, without affecting the validity, 

construction, and enforcement of the contract between Amex 

and its customers. Amex also fails to show how New Jersey 

law pertaining to unclaimed property can be interpreted to 
16

require incorporation into Amex’s contract with its customer.6

C. Takings Clause

 

Because Amex has not shown that Chapter 25 constitutes a 

substantial impairment on this contractual relationship, it did 

not succeed in showing a likelihood of success on its Contract 

Clause claim.

The Takings Clause of the Fifth Amendment prohibits 

the federal government from taking private property for 

public use without providing just compensation. U.S. Const. 

Amend. V. The Takings Clause applies to state action 

through the Fourteenth Amendment. Webb’s Fabulous 

Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 160 (1980) 

(citing Chicago, B. & Q. R. Co. v. Chicago, 166 U.S. 226, 

239 (1897) and Penn Cent. Transp. Co. v. New York City, 438 

U.S. 104, 122 (1978)). When a state directly appropriates 

private property, it is considered a per se taking, and the state 

has a duty to compensate the owner. Tahoe-Sierra Pres. 

 6 Amex’s reliance on Nieves v. Hess Oil Virgin Is. 

Corp., 819 F.2d 1237 (3d Cir. 1987) is misplaced. In Nieves, 

a 1986 amendment to the Virgin Island’s Workmen’s 

Compensation Act retroactively eliminated an employer’s 

immunity from tort actions. 819 F.2d at 1248. Because the 

employer had immunity under the law at the time of the 

contract, this amendment exposed the employer to significant 

additional tort liability that was unexpected. Id. Chapter 25, 

however, does not impose an unexpected liability on Amex 

that would “completely destroy[] its contractual 

expectations.” Id. at 1248. It only seeks to retroactively 

claim abandoned travelers checks that ultimately belong to 

the purchasers, not Amex.
17

Council v. Tahoe Reg’l Planning Agency, 535 U.S. 302, 322 

(2002). Where, as here, a party asserts a regulatory taking, 

there is no set formula. Rather, courts must engage in a 

factual inquiry to determine whether a taking has been 

effected. New Jersey v. United States, 91 F.3d 463, 468 (3d 

Cir. 1996) (citing Lucas v. S.C. Coastal Council, 505 U.S. 

1003, 1015 (1992)).

To succeed on a takings claim, Amex must show that 

the State’s action affected a “legally cognizable property 

interest.” Prometheus Radio Project v. FCC, 373 F.3d 372, 

428 (3d Cir. 2004) (citing Cleveland Bd. of Educ. v. 

Loudermill, 470 U.S. 532, 538 (1985) and Webb’s, 449 U.S. 

at 160-61 (1980)). “Relevant considerations include ‘[t]he 

economic impact of the regulation on the claimant and . . . the 

extent to which the regulation has interfered with distinct 

investment-backed expectations.’” New Jersey v. United 

States, 91 F.3d at 463 (quoting Penn Cent., 438 U.S. at 124).

The character of the state action is also relevant: 

unlike “a physical invasion of land[,] . . . a public program 

adjusting the benefits and burdens of economic life to 

promote the common good . . . ordinarily will not be 

compensable.” Id. (internal quotation marks and citation 

omitted). Thus, that a regulation “adversely affect[s] 

recognized economic values” is not enough to constitute a 

taking. Id. Even a regulation that prohibits the most 

beneficial use of property, or prevents an individual from 

operating an otherwise lawful business, does not necessarily 

violate the Takings Clause. Penn Cent., 438 U.S. at 125-26.

We agree with the District Court that Amex failed to 

show a likelihood of success on the merits of its takings 

claim. Amex maintains that it has both a right to invest the 
18

proceeds from the sale of TCs and a property interest in the 

income generated. Amex argues that the retroactive 

application of Chapter 25 constitutes a taking because it 

interferes with Amex’s investment-backed expectation that 

TCs already sold would have an abandonment period of 

fifteen years, which would have allowed Amex to invest the 

proceeds for fifteen years unless the owner redeemed the 

check.7

Lastly, the fact that Amex has a contractual right to 

invest TC funds does not necessarily render Chapter 25 an 

 However, Amex’s claim that Chapter 25 interferes 

with its investment-backed expectations cannot stand because 

Amex’s TC business has long been subject to regulation by 

New Jersey. The Supreme Court has established that 

“‘[t]hose who do business in the regulated field cannot object 

if the legislative scheme is buttressed by subsequent 

amendments to achieve the legislative end.’” Connolly v. 

Pension Ben. Guar. Corp., 475 U.S. 211, 227 (1986) (quoting 

FHA v. The Darlington, Inc., 358 U.S. 84, 91 (1958)). Since 

Chapter 25 is a subsequent amendment to achieve the 

legislative end of assuming custody of abandoned property, 

Amex has no ground to claim interference with its 

investment-backed expectations.

 7 Contrary to Amex’s contention, E. Enterp. v. Apfel, 

524 U.S. 498 (1998), is distinguishable from this case. In E. 

Enterp., the Supreme Court held that the Coal Industry 

Retiree Health Benefit Act was an unconstitutional taking 

because it imposed on the employer retroactive pension 

liability for retired miners. Id. at 532. But here, Chapter 25 

does not impose any further liability on Amex. It only 

requires that issuers like Amex turn over property owned by 

the travelers check owners to State custody.
19

unconstitutional taking. The State has considerable authority 

to enact legislation, including “the power to affect contractual 

commitments between private parties.” See E. Enterp., 524 

U.S. 498, 528 (1998). Amex’s ability to utilize TC funds is 

constrained by the owner’s ability to redeem a TC on demand 

and by the terms of the State’s unclaimed property laws. See 

Security Sav. Bank, 263 U.S. at 286. In Delaware v. New 

York, the Supreme Court delineated the property right of 

debtors with regard to state escheat laws:

Funds held by a debtor become subject to 

escheat because the debtor has no interest in the 

funds – precisely the opposite of having “a 

claim to the funds as an asset.” We have 

recognized as much in cases upholding a State’s 

power to escheat neglected bank deposits. 

Charters, bylaws, and contracts of deposit do 

not give a bank the right to retain abandoned

deposits, and a law requiring the delivery of 

such deposits to the State affects no property 

interest belonging to the bank. [Sec. Sav. Bank, 

263 U.S. at 285-86]; Provident Institution for 

Sav. v. Malone, 221 U.S. 660, 665-66 (1911). 

Thus, “deposits are debtor obligations of the 

bank,” and a State may “protect the interests of 

depositors” as creditors by assuming custody 

over accounts “inactive so long as to be 

presumptively abandoned.” [Anderson Nat. 

Bank, 321 U.S. at 241] (emphasis added). Such 

“disposition of abandoned property is a function 

of the state,” a sovereign “exercise of a 

regulatory power” over property and the private 

legal obligations inherent in property. 
20

[Standard Oil Co. v. New Jersey, 341 U.S. 428,

436 (1951)].

507 U.S. 490, 502 (1993). Thus, Amex, as debtor to TC

owners, has no right to retain the funds once they are deemed 

abandoned under the State’s unclaimed property laws. 

Accordingly, the District Court did not err in finding that 

Amex failed to show a reasonable probability of success on 

its Takings Clause claim.

D. Commerce Clause

Under the Commerce Clause, Congress has the power 

to “regulate Commerce . . . among the several States.” U.S. 

Const. Art. I, § 8, cl. 3. “This clause also has an implied

requirement (often called the ‘negative’ or ‘dormant’ aspect 

of the clause) that the states not ‘mandate differential 

treatment of in-state and out-of-state economic interests that 

benefits the former and burdens the latter.’” CloverlandGreen Spring Dairies, Inc. v. Pa. Milk Mktg. Bd., 462 F.3d 

249, 261 (3d Cir. 2006) (citing Granholm v. Heald, 533 U.S. 

460, 472 (2005)). Our inquiry as to whether a state law 

violates the dormant Commerce Clause is twofold: first, we 

determine whether heightened scrutiny applies, and, if not, 

then we determine whether the law is invalid under the Pike

v. Bruce Church, Inc., 397 U.S. 137 (1970), balancing test. 

Cloverland-Green, 462 F.3d at 261 (citation omitted). We 

apply heightened scrutiny when a law “discriminates against 

interstate commerce” in purpose or effect. C & A Carbone, 

Inc. v. Town of Clarkstown, 511 U.S. 383, 390 (1994). 

Because Amex has not alleged that heightened scrutiny 

applies, we look to the Pike balancing test. Under this test, 

courts will uphold nondiscriminatory regulations that only 

incidentally affect interstate commerce unless “the burden 
21

imposed on [interstate] commerce is clearly excessive in 

relation to the putative local benefits.” Pike, 397 U.S. at 142.

Amex contends that Chapter 25, if implemented, will 

violate the dormant Commerce Clause because its effects will 

be projected into other states. Specifically, Amex claims that 

it will be forced to choose between: (a) selling TCs in New 

Jersey at a marginal profit or at a loss; (b) not selling TCs in 

New Jersey; (c) charging a fee for selling TCs in New Jersey; 

or (d) charging a fee to sell TCs throughout the country so 

that it can maintain uniform conditions. If it chooses to 

charge a fee to sell TCs throughout the country, Amex argues, 

then Chapter 25 will have dictated commercial activity in 

other states.

Amex compares such a result to laws the Supreme 

Court struck down on dormant Commerce Clause grounds in 

Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 

476 U.S. 573, 582 (1986) and Healy v. Beer Institute, Inc., 

491 U.S. 324, 336 (1989). In Brown-Forman, the Supreme 

Court found that New York had “project[ed] its legislation 

into [other States]” by requiring distillers to seek the approval 

of the New York State Liquor Authority before lowering 

prices in other states. 476 U.S. 583-84 (internal quotation 

marks and citation omitted) (second alteration in original). 

Similarly, in Healy, the Supreme Court struck down a 

Connecticut statute that “require[d] out-of-state shippers of 

beer to affirm that their posted prices for products sold to 

Connecticut wholesalers [were] . . . no higher than the prices 

at which those products are sold in [neighboring states.]” 491 

U.S. at 326. The Court held both statutes to be 

unconstitutional because “States may not deprive businesses 

and consumers in other States of ‘whatever competitive 

advantages they may possess based on the conditions of the 
22

local market.” Healy, 491 U.S. at 339 (quoting BrownForman, 476 U.S. at 580).

Unlike these statutes, Chapter 25 does not directly 

regulate travelers checks sold in other states or force Amex to 

conform its out-of-state practices to less favorable in-state 

conditions. Nothing prevents other states from regulating 

travelers checks differently from the way New Jersey has 

chosen to do in Chapter 25. And by Amex’s own admission, 

the costs of compliance could be passed on to New Jersey 

travelers check customers or be absorbed by issuers like 

Amex.8

 8 Amex argues that requiring it to change its TC

business so that it operates differently in New Jersey than it 

does in other jurisdictions (e.g., charging a fee in New Jersey)

would substantially burden interstate commerce based on the 

Supreme Court’s decision in Bibb v. Navajo Freight Lines, 

Inc., 359 U.S. 520, 529-30 (1959). But the Supreme Court 

acknowledged that Bibb was an exceptional case because the 

state law obstructed the literal movement of goods between 

states by requiring trucks to alter their safety equipment upon 

entering Illinois. Id. at 529. The Court maintained that states 

have “great leeway in providing safety regulations for all 

vehicles—interstate as well as local[,]” but in that case, the 

burden on the interstate movement of trucks passed “the 

permissible limits even for safety regulations.” Id. at 530. 

Amex has not shown that Chapter 25 imposes a similarly 

heavy burden for this to be considered an exceptional case.

 Under the Pike balancing test, when the costs of a 

regulation may be born solely by those in the state enacting it, 

the burden imposed on interstate commerce is minimal, and 

not excessive in relation to the putative local benefits 

articulated by the State. See United Haulers Ass’n, Inc. v. 
23

Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 

345 (2007) (holding when “the very people who voted for the 

laws” bear the costs attributable to those laws, the costs of the 

regulation do not fall outside the state). Therefore, Amex 

failed to show a reasonable probability of success on the 

merits of its Commerce Clause claim.

E. Remaining preliminary injunction factors

Because Amex was unable to show a likelihood of 

success on the merits of its claims, we need not address the 

remaining preliminary injunction factors, see Crissman, 239 

F.3d at 364 (listing preliminary injunction factors), and the 

District Court’s denial of Amex’s motion for preliminary 

injunction must be affirmed. See In re Arthur Treacher’s 

Franchisee Litig., 689 F.2d at 1143.

IV. Conclusion

We hold that Amex failed to show a likelihood of 

success on the merits of its Due Process Clause, Contract 

Clause, Takings Clause, and Commerce Clause claims. Thus, 

the motion for preliminary injunction of Chapter 25 must be 

denied. For the foregoing reasons, we will affirm the order of 

the District Court.