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Univar Inc. Latest to Sue Delaware Over Audit Tactics

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On Monday, December 3, Univar, Inc. brought an action against the state of Delaware in the U.S. District Court for the District of Delaware. The same court where the famed Temple-Inland case was heard and settled. The instant case presents different issues however, significant in many respects. Univar alleges 5 separate infringements of Constitutional rights in its Complaint: 1) 4th Amendment right to be free from unreasonable search and seizure; 2) deprivation of substantive due process rights under the 14th Amendment; 3) deprivation of procedural due process rights under the 14th Amendment; 4) unconstitutional taking of private property for public use without just compensation; and 5) violation of the company’s 14th Amendment equal protection rights.

All of these claims arise from an audit conducted on behalf of several states, including Delaware, by its agent Kelmar Associates. Interestingly, the facts presented in the Complaint indicate that the audit never really got going – as Univar, Kelmar and the state spent 3 years corresponding with each other over data privacy concerns and the proper application of terms contained in a Non-Disclosure Agreement which are commonly put in place at the outset of an audit. It appears that Delaware, even though it was not the only state represented by Kelmar in the audit, ultimately tired of waiting for Univar to begin the exam in a substantive way, and issued a subpoena to the company for production of records. The subpoena required an appearance or response of document production by December 3, 2018, the same day this lawsuit was filed.

There are parallels in this litigation to the Plains All-American case, but advocates and holders in our industry will eagerly await the next action from the state of Delaware in response to the Complaint filed. Stay tuned to hear more about these developments as they occur. Contact us and we’ll send you a copy of the Complaint, and provide answers to any questions you may have about Delaware unclaimed property, audits, or annual compliance with these laws. We are here to help.

Tagged: delaware escheat audit, kelmar audit, delaware unclaimed property, delaware escheat, delaware litigation, univar lawsuit