The U.S. Supreme Court refused to question the federal government's custody of more than $16 billion in unredeemed, decades-old U.S. Savings Bonds, turning down an appeal by five states.
The justices today left intact a federal appeals court decision that said the states couldn't use their unclaimed- property laws to take custody of the savings bonds. The three- judge panel said states can't interfere with the contract between the federal government and the bondholders.
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Montana, Kentucky, Oklahoma, Missouri and Pennsylvania pressed the lawsuit against the U.S. Treasury, joined by North Carolina and New Jersey at earlier stages in the case. The seven states sought custody of $1.6 billion in bonds owned by people whose last known address was in one of those states.
The states say the U.S. government holds 40 million savings bonds that no longer earn interest. Some date back as far as 1941, when they were issued to raise money for World War II.
The case is Montana v. Department of the Treasury, 12-926.