COURT OF CHANCERY 

OF THE 

STATE OF DELAWARE

JOSEPH R. SLIGHTS III

VICE CHANCELLOR

417 S. State Street

Dover, Delaware 19901

Telephone: (302) 739-4397

Facsimile: (302) 739-6179

Date Submitted: March 10, 2020

Date Decided: May 21, 2020

Caroline Lee Cross, Esquire

Elizabeth R. McFarlan, Esquire

Delaware Department of Justice

820 North French Street

Wilmington, DE 19801

Melanie K. Sharp, Esquire

Martin S. Lessner, Esquire

Mary F. Dugan, Esquire

Michael A. Laukaitis, II, Esquire

Young Conaway Stargatt & Taylor, LLP

1000 North King Street

Wilmington, DE 19801

Michael P. Kelly, Esquire

David A. White Esquire

Matthew J. Rifino, Esquire

McCarter & English LLP

405 North King Street, Suite 800

Wilmington, DE 10801

Re: State of Delaware, Department of Finance v. Univar, Inc.

C.A. No. 2018-0884-JRS

Dear Counsel:

Plaintiff, the Delaware Department of Finance (the “Department” or the 

“State”), has statutory authority to audit Delaware corporations to assess their 

compliance with Delaware’s unclaimed property law. Defendant, Univar, Inc. 
State of Delaware, Department of Finance v. Univar, Inc.

C.A. No. 2018-0884-JRS

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Page 2

(“Univar”), received a notice of examination regarding unclaimed property from 

Brenda Mayrack, the State Escheator, in 2015. It has declined to comply with the 

examination, igniting litigation in this Court and the United States District Court for 

the District of Delaware (the “District Court”). The proceedings in this Court

concern the State’s attempt to enforce an administrative subpoena compelling

Univar to produce certain corporate books and records. 

Univar has moved to dismiss, arguing this case is not ripe for adjudication 

because the State has failed to satisfy the statutory prerequisites for enforcing a 

subpoena. The State responds that, to the extent there are such prerequisites, they 

have been satisfied and this case is ripe for adjudication. After carefully weighing 

the parties’ arguments, I am convinced Univar has not met its burden of 

demonstrating, as a matter of law, that the claims asserted here are not ripe. 

Its Motion to Dismiss, therefore, must be denied. 
State of Delaware, Department of Finance v. Univar, Inc.

C.A. No. 2018-0884-JRS

May 21, 2020

Page 3

I. BACKGROUND

I have drawn the facts from the well-pled allegations in the Complaint and 

documents incorporated by reference or integral to the Complaint.1 “Any additional 

facts [discussed here] are either not subject to reasonable dispute or subject to 

judicial notice.”2

A. The Parties and Relevant Non-Parties

Plaintiff, the Department, is charged with enforcing Delaware’s unclaimed 

property law.3 Brenda Mayrack, the State Escheator, performs her function as a 

representative of the Department. 

 

1 Citations to the Complaint are to “Compl. ¶ ___.” See Wal-Mart Stores, Inc. v. AIG Life 

Ins. Co., 860 A.2d 312, 320 (Del. 2004) (noting that on a motion to dismiss, the Court may 

consider documents that are “incorporated by reference” or “integral” to the complaint). 

I also take judicial notice of the court record in companion litigation pending in the United 

States District Court for the District of Delaware (Univar, Inc. v. Geisenberger, 

C.A. No. 1:18 Civ. 01909). See Frank v. Wilson, 32 A.2d 277, 280 (Del. 1943) (taking 

judicial notice of court record in companion litigation when addressing a motion to 

dismiss); Orloff v. Shulman, 2005 WL 3272355, at *12 (Del. Ch. Nov. 23, 2005) (same).

2 Cedarview Opportunities Master Fund, L.P. v. Spanish Broadcasting Sys., Inc., 

2018 WL 4057012, at *1 (Del. Ch. Aug. 27, 2018). 

3 Compl. ¶ 3; 12 Del. C. § 1102. In this Opinion, I use “escheat law” and “unclaimed 

properly law” interchangeably. 
State of Delaware, Department of Finance v. Univar, Inc.

C.A. No. 2018-0884-JRS

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Page 4

Defendant, Univar, is a Delaware corporation.4 It received a notice of an 

unclaimed property examination from the State on December 11, 2015.5

B. The Escheat Law

Delaware’s escheat law allows the State to acquire title to abandoned property 

if, after the statutory waiting period, no rightful owner appears.6 Until the property 

is claimed, the State may (and does) use the funds in its operating budget.7 Large 

sections of Delaware’s escheat law were struck down as unconstitutional by court 

order in 2016 (the “Old Law”).

8 Apparently in response to the Temple-Inland, Inc.

decision, the escheat law was substantively amended in 2017 (the “New Law”).9

 

4 Compl. ¶ 1. 

5 Compl. ¶ 9. 

6 See 12 Del. C. §§ 1130, et seq. This property often takes the form of bank accounts, 

stocks or unused gift cards.

7 See Univar, Inc. v. Geisenberger, 409 F. Supp. 3d 273, 276 (D. Del. 2019).

8 See Temple-Inland, Inc. v. Cook, 192 F. Supp. 3d 527 (D. Del. 2016). 

9 See 8 Del. C. §§ 1101, et seq.
State of Delaware, Department of Finance v. Univar, Inc.

C.A. No. 2018-0884-JRS

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Delaware’s recovery of unclaimed property is facilitated by the priority rules 

set forth by the United States Supreme Court in Texas v. New Jersey.

10 There, the 

court explained that only one state may escheat unclaimed property.11 The first 

priority goes to the state of the owner’s last known address.12 When, as often is the 

case, that address is unknown, the second priority, in the entity context, goes to the

state where the holder is incorporated.13 Because so many business organizations 

call Delaware home, our state often has priority to escheat unclaimed property held 

by those entities.

14

As an entity incorporated in Delaware, Univar is a potential holder of 

unclaimed property under the New Law.15 As such, the New Law, like the Old Law, 

authorizes the State Escheator to “[e]xamine the records of a person or the records 

 

10 379 U.S. 674 (1965). 

11 Id. at 677. 

12 Id. at 681–82.

13 Id. at 682. 

14 Federal Complaint ¶ 20. 

15 Compl. ¶ 2; 12 Del. C. § 1130(9).
State of Delaware, Department of Finance v. Univar, Inc.

C.A. No. 2018-0884-JRS

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in the possession of an agent, representative, subsidiary, or affiliate of the person 

under examination in order to determine whether the person complied with 

[the Escheat Law].”16 Delaware utilizes an agent, Kelmar Associates LLC 

(“Kelmar”), to perform audits to investigate whether entities are complying with 

Delaware law.17 As a part of this auditing procedure, the New Law, unlike the Old 

Law, authorizes the State to issue administrative subpoenas that can direct a 

company to turn over corporate books and records to Kelmar.18 

C. Procedural History

As noted, the State sent an examination notice to Univar in late 2015.19 

Kelmar sent its first document request to Univar on September 23, 2016.20 Since 

 

16 Compl. ¶ 4 (quoting 12 Del. C. § 1171(1)).

17 Compl. ¶ 10. 

18 Compl. ¶¶ 6, 10. 

19 Compl. ¶ 9. 

20 Compl. ¶ 10. 
State of Delaware, Department of Finance v. Univar, Inc.

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then, Univar has declined to cooperate with the State’s audit and has refused to 

produce any documents in response to Kelmar’s requests.

21

 

On October 30, 2018, the State issued an administrative subpoena, pursuant 

to 12 Del. C. § 1171(3), directing Univar to provide responsive documents by 

December 3, 2018.22 Again, Univar did not comply and, instead, filed an action in

the District Court challenging the New Law’s constitutionality.23

The State responded by filing its Complaint in this Court seeking a summary 

order enforcing its subpoena. Specifically, the Complaint seeks an Order under 

12 Del. C. § 1171(4) requiring Univar to comply with the State’s administrative 

subpoena.24 

 

21 Compl. ¶ 11. 

22 Compl. ¶ 13. 

23 Compl. ¶ 14; see Univar, 409 F. Supp. 3d at 273.

24 Compl. ¶ 7. See 12 Del. C. § 1171(4) (“The State Escheator . . . may . . . [b]ring an action 

in the Court of Chancery seeking enforcement of an administrative subpoena issued under 

paragraph (3) of this section, which the Court shall consider under procedures that will lead 

to an expeditious resolution of the action.”). 
State of Delaware, Department of Finance v. Univar, Inc.

C.A. No. 2018-0884-JRS

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Defendant moved to dismiss or stay this action on January 11, 2019, in favor 

of the first-filed federal action.25 On April 8, 2019, this Court granted the motion to 

stay upon concluding that the statute granting the State subpoena power, at issue in 

this litigation, was among the statutory provisions Univar was challenging as 

unconstitutional in the first-filed federal action.

26

 On September 17, 2019, the 

District Court granted in part and denied in part the State’s Motion to Dismiss.27 

In doing so, the court determined that Univar had stated a claim that the State has 

violated its due process and equal protection rights.28 The court also held many of 

Univar’s claims were not ripe, and stayed that case while this Court decides whether 

to enforce the State’s subpoena as a matter of Delaware law.

29

 

25 D.I. 6. 

26 D.I 32; State of Del., Dep’t. of Fin. v. Univar, Inc., C.A. No. 2018-0884-JRS (Del. Ch. 

Apr. 8, 2019) (TRANSCRIPT) (D.I. 35). 

27 Univar, 409 F. Supp. 3d at 273. 

28 Id. at 282–84. 

29 Id. at 284–85. 
State of Delaware, Department of Finance v. Univar, Inc.

C.A. No. 2018-0884-JRS

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Univar has now moved to dismiss this action, arguing the State’s claim is not 

ripe for adjudication because the State has failed to comply with the statutory 

prerequisites for issuing a subpoena.30 It also argues it has preserved all 

constitutional arguments that are properly before the District Court, and that this 

Court need not address any constitutional issues when deciding the State’s 

entitlement to enforce its subpoena.

31

II. ANALYSIS

“Ripeness, the simple question of whether a suit has been brought at the 

correct time, goes to the very heart of whether a court has subject matter 

jurisdiction.”32 “Courts in [Delaware] decline to exercise jurisdiction over cases in 

which a controversy has not yet matured to a point where judicial action is 

 

30 Opening Br. in Supp. of Def. Univar’s Mot. to Dismiss (“OB”) 2. 

31 Reply Br. in Supp. of Def. Univar’s Mot. to Dismiss (“RB”) 16–22.

32 Bebchuck v. CA, Inc., 902 A.2d 737, 740 (Del. Ch. 2006). 
State of Delaware, Department of Finance v. Univar, Inc.

C.A. No. 2018-0884-JRS

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appropriate.”33 This measured approach both preserves limited judicial resources 

and ensures an orderly development of the law.34 

At oral argument, Univar made clear that its ripeness defense is predicated on

two points. First, it argues the State has not adequately demonstrated its compliance 

with the New Law’s confidentiality provisions, a necessary prerequisite to any 

audit.35 Second, it argues the State has not promulgated sufficient regulations to 

manage multistate audits fairly, as required by the New Law.

36

 Separately, the 

 

33 Stroud v. Milliken Enters., Inc., 552 A.2d 476, 479 (Del. 1988). 

34 Id. 

35 Oral Arg. on Def.’s Mot. to Dismiss (“OA”)13; OB 16–20. 

36 OA 13; OB 20–23. While Defendant argued in its briefs that this action was unripe 

because the State has not made a determination whether the Old Law or New Law applies, 

it candidly acknowledged at oral argument that the State has made that determination and 

has communicated as much to Univar within the body of the subpoena at issue here. 

OA 13, 17. Univar also argued in its opening brief that this Court would have no power to 

enforce its order with respect to the subpoena, rendering any decision on the State’s claim 

here an advisory opinion. OB 25–28. It appeared to back off that argument in its reply 

brief and at oral argument. OA 19. In any event, I am satisfied that nothing about the New 

Law in any way restricts this Court’s inherent contempt power. See DiSabatino v. Salicete, 

671 A.2d 1344, 1348 (Del. 1996) (“Courts have ‘an inherent contempt authority, . . . as a 

power necessary to the exercise of others.’”) (quoting Int’l Union, United Mine Workers of 

Am. v. Bagwell, 512 U.S. 821, 831 (U.S. 1994)). If the Court were to order Univar to 

respond to the State’s subpoena, and Univar were to refuse to comply with that order, the 

Court would have several coercive options at its disposal to compel compliance. 
State of Delaware, Department of Finance v. Univar, Inc.

C.A. No. 2018-0884-JRS

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parties dispute whether Univar has preserved, and may present to the District Court,

its constitutional arguments with respect to the subpoena under England v. Louisiana 

State Board of Medical Examiners.

37

 I address each argument below. 

A. This Action is Ripe for Adjudication

As noted, Univar maintains this action is not ripe because the State has not 

demonstrated its compliance with the New Law’s confidentiality requirements for 

multistate audits.38 In this regard, Univar maintains that the audit being conducted 

by the State is a multistate audit, notwithstanding the State’s insistence that it is 

conducting a “Delaware-only” audit.39 Univar then argues that, because the public 

records laws of the other states participating in this supposed multistate audit 

materially conflict with the confidentiality requirements of the New Law, this action 

will not be ripe for decision until the State demonstrates its full compliance with 

Delaware’s confidentiality requirements.40

 

37 375 U.S. 411 (1964) (addressing constitutional abstention). 

38 OA 8; 12 Del. C. §§ 1181, 1189. 

39 OB 16–20; RB 12–16.

40 OB 16–20; 12 Del. C. § 1189. 
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I am not persuaded. First, there is no basis to conclude as a matter of 

undisputed fact that the State is conducting a multistate audit.41 More to the point, 

even if the State were conducting a multistate audit, Kelmar is bound by Delaware 

law not to share any of Univar’s confidential information with “any person who is 

not a current officer or employee of [Delaware]. . . .”42 This Court has the authority, 

backed by its inherent contempt powers, to order that any books and records Univar 

produces in response to the subpoena be subject to a confidentiality order that 

complies with (and imposes) Delaware law.

43

 Such an order could include, for 

example, a provision prohibiting the Kelmar auditors who receive Univar’s 

information pursuant to the Delaware subpoena from sharing that information with 

others, including other Kelmar auditors. 

 

41 AB, Ex. A.

42 12 Del. C. § 1189(a). Violation of the New Law’s confidentiality provisions is a 

misdemeanor, with the Superior Court having “exclusive original jurisdiction over such 

misdemeanor.” 12 Del. C. § 1189(d).

43 See generally Hallett v. Carnet Hldg. Corp., 809 A.2d 1159, 1162 (Del. 2002) (noting 

that the court has inherent authority to enter appropriate confidentiality orders); In re Trust 

for Gore, 2011 WL 13175994, at *1 (Del. Ch. Dec. 22, 2010) (same).
State of Delaware, Department of Finance v. Univar, Inc.

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Univar next argues that the State has failed to demonstrate it has promulgated 

regulations that will allow it to ensure that the New Law is being enforced as 

intended.44 Here again, I disagree. Section 1172 of the New Law empowers the 

Department of Finance to promulgate regulations.45 The State has written a number 

of rules and regulations pursuant to that statutory grant of rule-making authority.46 

Nothing in the New Law, however, sets some qualitative or quantitative regulatory 

threshold against which the State’s authority to enforce its administrative subpoenas 

should be measured. While Univar may not like the number or content of regulations 

that have been promulgated, that does not mean this case is unripe. Any gap that 

might exist in the regulations can easily be filled by the well-developed common law 

standards in Delaware for enforcing subpoenas.47 When the question of the 

subpoena’s enforceability is called, this Court can and will look to that body of law. 

 

44 OB 20.

45 12 Del. C. § 1172(e). 

46 See OB, Ex. A.

47 The parties have not pointed to any Delaware authority that provides guidance on the 

standards for enforceability of a subpoena specifically under the unclaimed property law. 

But there is abundant authority with respect to the parameters for enforcement of 

administrative subpoenas generally. See, e.g., State v. Salasky, 2013 WL 5487363, at *14–
State of Delaware, Department of Finance v. Univar, Inc.

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B. The District Court Should Decide Any Issues Concerning Abstention 

Doctrines

The State argues that, having moved to dismiss this action, Univar should be 

forced, here and now, to litigate the facial challenges it has mounted to the New Law, 

and its failure to do so in its Motion should result in a declaration from this Court 

that those challenges have been waived.48 The State acknowledges that it would 

then take that declaration to the District Court, drop it in on the district judge’s

proverbial lap and argue—presumably with the intent to suggest issue or claim 

preclusion—that the abstention issues have already been decided.49 For its part, 

Univar denies it has raised a facial challenge to the statute in the current action, and

 

15 (Del. Super. Sept. 26, 2013) (discussing the Attorney General’s statutory subpoena 

power under 29 Del. C. §§ 2505(4), 2508(a)); U.S. v. Powell, 379 U.S. 48, 57–58 (1964) 

(Finding an administrative subpoena is enforceable when “the investigation will be 

conducted pursuant to a legitimate purpose, that the inquiry may be relevant to the purpose, 

that the information sought is not already within the [agency’s] possession, and that the 

administrative steps required by the [law] have been followed . . . .”).

48 AB 33–38; OA 32. 

49 OA 32.
State of Delaware, Department of Finance v. Univar, Inc.

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maintains that all constitutional issues were properly presented to, and preserved for 

argument in, the District Court.

50

Given that a ruling by this Court that the subpoena was not enforceable as a 

matter of Delaware law would moot certain claims in the federal action, the District 

Court understandably deemed it appropriate to stay that case pending adjudication 

of this case.51 In doing so, the District Court acknowledged that asking this Court to 

rule on the subpoena’s enforceability before addressing Univar’s constitutional 

claims would bring “certain abstention doctrines [] into play.”52 The District Court

further noted “that according to Supreme Court precedent certain issues may be 

preserved for adjudication in federal courts if those issues are explicitly noted and 

deliberately avoided during state court litigation.”53 

Nothing in the District Court’s opinion suggests the court there intended that 

this Court would adjudicate whether either party has properly preserved its 

 

50 RB 16–21; OA 45–51. 

51 Univar, 409 F. Supp. 3d at 284.

52 Id. at 285. 

53 Id. at 285 n.5 (citing England, 375 U.S. at 420). 
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constitutional arguments under England, much less that this Court would actually 

decide constitutional issues that are clearly at the heart of the federal litigation. 

Indeed, the State has pointed to no authority where a Delaware state court took it 

upon itself to decide whether a party had preserved constitutional arguments for 

presentation in a federal court. In my view, that decision is properly left to the 

District Court.

54

 My reading of the District Court’s opinion is that the presiding 

judge there shares that view.

55

* * * * *

Having determined that the State has stated a justiciable claim for enforcement 

of its subpoena under the New Law, the next step is to present the claim for decision 

 

54 See Temple of Lost Sheep Inc. v. Abrams, 930 F.2d 178, 183 (2d Cir. 1991) (federal court 

ruling that a plaintiff was precluded from asserting its federal claims); Lupin Pharm., Inc. 

v. Richards, 2015 WL 4068818, at *4 (D. Md. July 2, 2015) (federal court determining it 

should abstain). 

55 Univar, 409 F. Supp. 3d at 285. This is not to say that Univar will be prohibited from 

making arguments that narrowly implicate constitutional considerations when addressing,

on the merits, whether the State’s administrative subpoena is enforceable. See In re Blue 

Hen Country Network, Inc., 314 A.2d 197, 200 (Del. Super. 1973) (noting that the State’s 

subpoena must comply with the Fourth Amendment). 
State of Delaware, Department of Finance v. Univar, Inc.

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on the merits promptly. With this in mind, the parties shall confer and submit a joint 

or, if they cannot agree, separate proposed case scheduling order(s) within the next 

ten (10) days. 

III. CONCLUSION

For the foregoing reasons, Defendant’s Motion to Dismiss is DENIED. 

IT IS SO ORDERED. 

Very truly yours,

/s/ Joseph R. Slights III