Litigation over unclaimed property rules and obligations
continues to accelerate. The first quarter of 2016 brought
developments in several cases, including a much-watched contest
over merchandise credits and a new battle between the states over
which state gets the money.
California Merchandise Credits Not Subject to Remittance as
Unclaimed Property; Implicit Application of Derivative Rights
Doctrine Prevails
On March 4, 2016, a California superior court held in
Bed Bath & Beyond, Inc. v John
Chiang that unredeemed merchandise return
certificates (certificates) issued by Bed Bath & Beyond
(BB&B) to tis California customers are exempt "gift
certificates" under the California Unclaimed Property
Law—and not "intangible personal property" under
the California catch-all provision. Like many retail stores,
BB&B provides the certificates as credits to customers who
return items without a receipt. While the certificates may be
redeemed for merchandise at BB&B or one of
