BBB VALUE SERVICES, INC. VS. TREASURER, STATE OF NEW Â NEW JERSEY, DEPARTMENT OF THE TREASURY, ETC.BED BATH & BEYOND, INC. VS. TREASURER, STATE OF NEW JERSEY, DEPARTMENT OF THE TREASURY, ETC.(NEW JERSEY DEPARTMENT OF THE TREASURY, UNCLAIMED PROPERTY ADMINISTRATION)(CONSOLIDATED)
A-2973-14T3/A-4880-14T3
| N.J. Super. Ct. App. Div. | Sep 21, 2017Background
- Bed Bath & Beyond, Inc. (BB&B) issued non‑cash merchandise return certificates to customers who returned items without receipts; BBB Value Services, Inc. (BBB‑VSI) is a BB&B subsidiary that issued similar certificates.
- Unredeemed certificates for NJ customers totaled ~$939,341 (issued before July 1, 2010) and ~$244,553 (issued July 1, 2010–June 30, 2011).
- BB&B historically treated those instruments as non‑cash credits redeemable only for merchandise/services; BB&B reported and remitted some amounts to the State under the Unclaimed Property Administration (UPA).
- BB&B (pre‑2010 certificates) and BBB‑VSI (post‑July 1, 2010 certificates) sought refunds or recharacterizations: BB&B argued pre‑2010 certificates were not UUPA “property”; BBB‑VSI argued post‑2010 certificates are “stored value cards” but were remitted prematurely.
- The UPA denied refunds, treating the instruments as credit memoranda (pre‑2010) and as reportable property (post‑2010); these appeals followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether certificates issued before July 1, 2010 are "property" under the UUPA | BB&B: Certificates redeemable only for goods/services are not claims for payment of money and thus are outside the UUPA | UPA: Certificates are credit memoranda from returns and effectively obligations to pay (i.e., reportable as unclaimed property) | Court: Pre‑2010 certificates are not UUPA property; refund ordered (UPA denial reversed) |
| Whether certificates issued on/after July 1, 2010 constitute "stored value cards" and whether remission was premature | BBB‑VSI: These are stored value cards under the 2010 amendment; UPA received funds prematurely (remitted after 3 years rather than 5) and remitted 100% rather than statutory 60% for non‑reloadable cards | UPA: Treated the instruments as credit memoranda and reportable when remitted | Court: Instruments issued on/after July 1, 2010 qualify as stored value cards; value was remitted prematurely and refund is required; case remanded for compliance and recalculation |
| Whether constitutional claims (takings, due process, contract clause, single‑object rule, federal injunction) bar UPA collection | Plaintiffs: Enforcement or retrospective application violates constitutional protections and may conflict with a federal injunction | UPA: Enforcement is authorized by statutory amendments; constitutional arguments not dispositive | Court: Did not reach or decide constitutional claims because statutory relief (refund/recalculation) resolved the appeals; constitutional issues unnecessary to decide |
Key Cases Cited
- Clymer v. Summit Bancorp, 171 N.J. 57 (N.J. 2002) (discusses UUPA custody, liberal interpretation in favor of the State, and that title remains in owner but State takes custodial use of unclaimed property)
- In re the Nov. 8, 1996, Determination of State, Dep't. of Treasury, Unclaimed Prop. Office, 309 N.J. Super. 272 (App. Div. 1998) (held gift certificates redeemable only for goods/services were not UUPA intangible property because they were not claims for payment of money)
- Am. Express Travel Related Svcs. Co. v. Sidamon‑Eristoff, 755 F. Supp. 2d 556 (D.N.J. 2010) (discusses the impact of the 2010 UUPA amendment that added stored value cards and related federal injunction context)