In an attempt to curtail the smuggling of undocumented immigrants by trafficking organizations (known as "coyotes") from Mexico to Arizona, the Arizona Attorney General had obtained warrants and seized millions of dollars of money that was wire transferred to Mexico. The Attorney General focused on amounts over $500 which were believed to have been sent as payments to Mexican smugglers who have transported people or drugs into Arizona.
On September 18, 2006, an investigator working for the Arizona Attorney General informed Western Union that it presented a seizure warrant to the Arizona Superior Court in Maricopa County, seeking forfeiture of certain person-to-person money transfers sent from 28 different states, other than Arizona, to Mexico. The application was held under seal until three days later, when the Superior Court issued the seizure warrant. Western Union then filed an emergency motion to quash and stay the warrant.
In a separate proceeding, Western Union filed a § 1983 lawsuit on September 19, 2006 in the U.S. District Court for the District of Arizona in a further attempt to block the threatened seizures. Documents for that case are found in IM-AZ-0007
On September 25, 2006, the Maricopa County Superior Court (Judge Kenneth L. Fields) entered an order staying the seizure warrant until further review by the Court. Following the submission of briefs by the parties and an evidentiary hearing in November 2006, Judge Fields quashed the seizure warrant and entered a preliminary injunction. Judge Fields found that the State of Arizona had no jurisdiction over the transfer of funds from states other than Arizona and that the seizure warrant therefore violated Arizona state law and the U.S. Constitution. The State appealed.
On July 1, 2008, the Arizona Court of Appeals reversed the decision of the Superior Court, holding that "if a foreign corporation is subject to general in personam jurisdiction in Arizona, its debts can be considered within this state for purposes of in rem jurisdiction." The Court also held that the seizure warrant did not violate the Constitution. State v. W. Union Fin. Servs., Inc., 199 P.3d 592 (Ariz. Ct. App. 2008). Western Union petitioned the Supreme Court of Arizona for review.
On June 3, 2009, the Supreme Court of Arizona vacated the judgment of the Court of Appeals, holding that, under the Due Process Clause of the United States Constitution, Arizona lacked in rem jurisdiction to seize wire transfers sent from other states to Mexico. The Court held that "a necessary prerequisite to in rem jurisdiction is location of the subject property within the forum state," and refused to conclude that "the property seized here, although in electronic form, is itself located in Arizona simply because Western Union can be sued here." State v. W. Union Fin. Servs., Inc., 208 P.3d 218 (Ariz. 2009) (en banc).
Following remand, the Superior Court entered a stipulation of the parties vacating the order quashing the seizure warrant and preliminary injunction, releasing the seized property, and dismissing the case. Dan Dalton - 09/17/2007
Dan Whitman - 03/28/2015