Plains All American Pipeline, L.P. v. Cook
201 F. Supp. 3d 547
D. Del.2016Background
- This case concerns enforcement of Delaware unclaimed property laws, including audits of holders by the State Escheator.
- The Audit Manager conducts examinations to determine compliance, with procedures for protests if underreporting is found.
- Kelmar is a third‑party auditor engaged by Delaware to examine plaintiffs' books and records.
- Plaintiff refused to submit to the audit and raised objections to Kelmar and the Audit Manager.
- Plaintiff filed suit on June 5, 2015, later amending the complaint to allege constitutional and related claims.
- The court granted both the Delaware Defendants’ and Kelmar’s motions to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue Kelmar | Kelmar has standing to challenge audit action. | Kelmar lacked authority to compel or litigate on states' behalf; no injury | Kelmar lacks standing; claims against Kelmar dismissed |
| Ripeness of declaratory relief against Delaware Defendants | Declaratory judgment sought on ongoing/audit process is ripe | Audit process not sufficiently concrete; claims contingent and speculative | Not ripe, except equal protection; declaratory relief denied for others |
| Equal Protection claim viability | Delaware Defendants targeted Plaintiff and wealthy entities, violating equal protection | Audits rationally related to legitimate state interest; wealth not a suspect class | Equal protection claim dismissed |
Key Cases Cited
- NE Hub Partners, L.P. v. CNG Transmission Corp., 239 F.3d 333 (3d Cir.2001) (ripeness and standing framework in declaratory actions)
- Young America Corp. v. Affiliated Computer Services (ACS), Inc., 424 F.3d 840 (8th Cir.2005) (standing where audit enforcement not shown; no authority to bind states)
- Texas v. New Jersey, 379 U.S. 674 (Supreme Court, 1965) (priority rules for interjurisdictional taxation/audit context)
- N.J. Retail Merchants Ass’n v. Sidamon-Eristoff, 669 F.3d 374 (3d Cir.2012) (preemption and rational basis considerations in state regulation)
- Step-Saver Data Sys., Inc. v. Wyse Tech., 912 F.2d 643 (3d Cir.1990) (ripeness factors and declaratory judgment considerations)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (Supreme Court, 1992) (standing requirements: injury, causation, redressability)
- Hodel v. Va. Surface Mining & Reclamation Ass’n, 452 U.S. 264 (Supreme Court, 1981) (fact-specific inquiry for taking-related challenges)
- Travelers Ins. Co. v. Obusek, 72 F.3d 1148 (3d Cir.1995) (practical utility and adequacy of declaratory judgments)