[00:00:14] Speaker 01: Ms. [00:00:15] Speaker 01: Klein. [00:00:19] Speaker 00: May it please the court, Elisa Klein for the United States. [00:00:22] Speaker 00: I'd like to very briefly put into the big picture context the main statistic that is in the Kansas brief, and this is the one we've discussed on page six, five to six, which is that there were, as of January 2018, 26 million [00:00:40] Speaker 00: series E savings bonds that had matured but not yet been redeemed. [00:00:45] Speaker 00: So the chart that they cite in footnote six, the same chart, makes clear this is a massive program and we're talking about less than one percent of all series E bonds. [00:00:57] Speaker 00: The United States honors its debts. [00:00:59] Speaker 00: The vast, vast majority of matured bonds have already been... Let's talk about the law here. [00:01:05] Speaker 01: Yes, Your Honor. [00:01:08] Speaker 01: In terms, your brief discusses conflict preemption at some length, but are we really talking about solely the meaning of the Treasury regulations, which seem on their face to bar any transfer or payment to anyone except the original owner, except specifically provided in the regulations. [00:01:32] Speaker 01: So are we really confronted solely with the question of what these regulations mean? [00:01:38] Speaker 01: whether they allow for recovery through S-sheet or they don't allow? [00:01:44] Speaker 00: Yes and no. [00:01:46] Speaker 00: Yes, the decision, the controlling legal issue turns on the meaning of Treasury's own regulations. [00:01:52] Speaker 00: These are the prior regulations. [00:01:54] Speaker 00: But in understanding what this particular regulation means, it is crucial to understand the background principle set out in the Third Circuit decision, which is that under [00:02:06] Speaker 00: the general Treasury regulations, a bond owner has the right to surrender her paper bond for payment at any time. [00:02:15] Speaker 01: So the question... I mean, it's useful, you're suggesting, to understand the language here in the light of the purpose of it, is that the point? [00:02:23] Speaker 00: In light of the purpose, but also in light of the specific Treasury regulations in subpart H that give the... Now, we're talking about this, you know, under one percent of people [00:02:34] Speaker 00: who wait and don't redeem their bonds at or near maturity. [00:02:38] Speaker 00: But time passes, and as the chart that plaintiffs sent in last week illustrates, millions and millions of people redeem bonds by taking the paper bond, turning it into their local bank, and getting paid by the federal government well after they mature. [00:02:54] Speaker 00: And they have the right to do that under the payment regulations. [00:02:59] Speaker 00: And what we're saying is, knowing that it is [00:03:03] Speaker 00: not plausible to read this other regulation to give state governments, essentially carte blanche, to take away their right to cash their bonds. [00:03:14] Speaker 01: Okay, so let me, both sides barely mention our deference. [00:03:20] Speaker 01: And of course, we know there's a case in the Supreme Court called the Kaiser case, which involves the question of whether our deference is going to survive. [00:03:30] Speaker 01: What role should our deference play [00:03:33] Speaker 01: in the interpretation of this regulation. [00:03:36] Speaker 01: Obviously, our deference doesn't apply if the regulation is clear on its face, but if it's ambiguous, don't we then get in a situation where we have to decide whether there's our deference to an interpretation which the government has previously given to this regulation and putting us in a position of having to figure out what the government meant by its earlier statements. [00:04:01] Speaker 00: Well, the short answer is that the regulations clearly foreclose the plaintiff's attempt to redeem bonds that they do not have in their possession and can't even identify the owners. [00:04:15] Speaker 00: So this is under the explicit terms of the redemption regulations. [00:04:20] Speaker 01: What happens if we say, well, we're not so sure? [00:04:23] Speaker 01: It looks to us as though maybe the regulation's ambiguous. [00:04:26] Speaker 01: What do we do then? [00:04:28] Speaker 00: The Treasury's interpretation, as Judge Cooper set out based on an exhaustive look at the historical record, has been consistent over time. [00:04:37] Speaker 00: Treasury has never allowed a state to come in and redeem a bond that didn't come into the state's possession. [00:04:44] Speaker 00: Understand that the possession is not a technicality. [00:04:47] Speaker 00: Well, again. [00:04:48] Speaker 01: Yeah, but wait. [00:04:50] Speaker 01: That's inconsistent with your interpretation. [00:04:52] Speaker 01: You say we pay bonds where the state has possession as a matter of grace, as a matter of discretion. [00:04:58] Speaker 01: If the Treasury agrees that these regulations give the state, as a matter of right, the ability to redeem bonds in their possession, that's inconsistent with your construction of these regulations. [00:05:14] Speaker 00: The principal issue. [00:05:15] Speaker 00: There's a subsidiary question. [00:05:17] Speaker 01: No, no, no. [00:05:18] Speaker 01: Address that. [00:05:18] Speaker 01: Is that not correct? [00:05:20] Speaker 00: There are different issues. [00:05:22] Speaker 00: Yes, no. [00:05:23] Speaker 00: No. [00:05:24] Speaker 00: The regulations have never allowed states [00:05:27] Speaker 00: to give them a right to redeem bonds that are in their possession. [00:05:32] Speaker 00: What Treasury has in limited, very limited circumstances, is said when you've come forward with evidence that these bonds are actually abandoned, meaning to start, you have them and you've gotten them under circumstances that show that they were in fact abandoned, in those contexts, [00:05:51] Speaker 00: even assuming this valid judicial regulation applies at all, that will be treated as a valid judicial proceeding. [00:05:59] Speaker 02: Treasury has... All of what you're saying is contingent on a certain understanding of what a valid judicial proceeding is under the regulation 315.20b, right? [00:06:10] Speaker 02: The other side believes that that encompasses its cheat proceedings, and then your side believes it doesn't. [00:06:18] Speaker 02: So we first have to figure that out. [00:06:19] Speaker 02: If it does, [00:06:21] Speaker 02: then what we have is federal law that contemplates and permits what the states are doing here. [00:06:29] Speaker 00: No, Your Honor. [00:06:30] Speaker 00: The question, as Judge Cooper recognized, is not whether this regulation recognizes a cheat proceedings, but which a cheat proceedings? [00:06:39] Speaker 02: The only actual- Well, that's- when we dig down further, yes, that's the next question. [00:06:46] Speaker 02: But the first question is, does it contemplate a cheat proceedings? [00:06:49] Speaker 02: And then maybe the next question is, does it [00:06:51] Speaker 02: encompass all SG pursuits. [00:06:54] Speaker 00: I'm happy to address them in this order, but Judge Cooper was correct in that the sequence doesn't... Do you mean Judge Kaplan? [00:07:00] Speaker 00: Sorry? [00:07:00] Speaker 00: No, I mean Judge Cooper in the district court case in which he looked at exactly the same historical record and arguments and rejected the claims. [00:07:09] Speaker 00: Of course it's not binding, but neither... Judge Kaplan certified the order based in part on the conflict with Judge Cooper's analysis. [00:07:16] Speaker 04: So are you making a distinction between [00:07:20] Speaker 04: what you think are valid as sheet proceedings when they have actual physical possession of the bond and therefore, you know, and have gone through whatever due process rights they need to go through to give the bondholders notice that they consider this abandoned property. [00:07:38] Speaker 04: And the cases like this, where they have not only have no possession, have no idea whether there are even bonds in existence that come within their jurisdiction. [00:07:48] Speaker 00: Yes, there are a series of reasons that this regulation, the valid judicial proceedings, doesn't apply. [00:07:54] Speaker 00: Again, it starts from the beginning of the sentence, the regulation. [00:07:58] Speaker 00: Treasury will recognize a claim against an owner of a savings bond. [00:08:02] Speaker 04: So I will let you finish, but I wanted to ask you that to set up a hypothetical, which is suppose somebody puts a list of all of their bonds' serial numbers in their safety deposit box. [00:08:18] Speaker 04: but keeps the bonds with them somewhere else. [00:08:21] Speaker 04: And at some point, that safety deposit box gets turned over to the State as abandoned property. [00:08:27] Speaker 04: And the State now has in its possession a list of bonds. [00:08:32] Speaker 04: Can it go to Treasury under the regulations that permit a bond holder to ask for lost bonds if they have the serial numbers? [00:08:42] Speaker 00: No, Your Honor, because there needs to be evidence that the bond was in fact lost after receipt by the owner. [00:08:48] Speaker 00: So that's the crucial substantive provision. [00:08:53] Speaker 04: Right. [00:08:53] Speaker 04: And so for the ones that are in their possession, you have prima facie evidence that it's been lost because the state now holds it and presumably have tried to notify the bondholders and haven't done it. [00:09:05] Speaker 04: But what if they went through the same proceedings with the list of serial numbers? [00:09:09] Speaker 04: If they published in the newspaper and said, we found this lost property in a savings [00:09:16] Speaker 04: a box and here are the numbers. [00:09:18] Speaker 04: If you don't claim it within a certain amount of time, we'll consider this lost property and it will become ours. [00:09:24] Speaker 04: No, no, because again, that's not... What's the difference between that proceeding and for a proceeding that's in their possession? [00:09:31] Speaker 00: Because the bond, it's a piece of paper that can only be in one place at a time. [00:09:36] Speaker 00: If the, if there's just a list of serial numbers in a safe deposit box, [00:09:41] Speaker 00: That's not evidence that the bond owner doesn't have her bonds. [00:09:44] Speaker 00: And I sent the image in not as evidence, but just to make the point concrete, which is that this is issued to Janice. [00:09:51] Speaker 00: If Janice has her bond, it's in her name, and she goes to a bank, she can redeem it, and it's paid by the United States. [00:10:00] Speaker 00: And nothing in Treasury's regulations allows Kansas or any other state to take that right away from her. [00:10:07] Speaker 00: So having a list and, you know, it's just like if they broke into her home and said, you know, I got her bonds, now I want to redeem it. [00:10:15] Speaker 00: Treasury's not going to allow that either. [00:10:17] Speaker 01: Well, that seems to me to be a bit of a problem for your alternative argument, which I understand to be that even if the state can S-cheat the bonds, it steps into the shoes of the bond holder and has no greater rights than the bond holder. [00:10:33] Speaker 01: in response to Judge Hughes' hypothetical, you're basically saying that the state would have a lesser right than the bondholder because it can't claim based on the serial numbers alone. [00:10:44] Speaker 01: A bondholder could claim if it had the serial numbers, right? [00:10:48] Speaker 00: No, Your Honor, not the serial numbers alone. [00:10:50] Speaker 00: The serial numbers plus an affidavit with specific evidence that shows that the bond was lost. [00:10:56] Speaker 00: If the state comes in with the serial numbers alone, which of course they can't do because they know nothing about the bonds, [00:11:01] Speaker 00: There is zero reason to think that, you know, Janice and the millions and millions of people like her don't have their bonds and the right to redeem them or indeed may well have redeemed them already. [00:11:10] Speaker 04: And they can't declare it lost through a sheet. [00:11:13] Speaker 00: That is the point that, and I understand that the posture of this case is different from the Third Circuit case, but the central proposition, which is that a state cannot just pass a law that says, [00:11:25] Speaker 00: I deem U.S. [00:11:26] Speaker 00: savings bonds abandoned, whether it's one year after maturity, three years after maturity, or the way Louisiana and South Dakota said, you know, decades before maturity. [00:11:35] Speaker 00: There is a want of authority. [00:11:37] Speaker 00: These federal bonds are pledged on the credit of the United States, and the federal regulations promise the real contracting parties, the registered bond owners, you can cash them at any time. [00:11:49] Speaker 00: And the state can't take that right away from them, and they can't say you have to go to Kansas instead. [00:11:55] Speaker 01: I want to talk a little bit about your alternative argument here, about stepping into the shoes of the bondholder. [00:12:01] Speaker 01: As I understand it, this case involves bonds that matured in 1972 and earlier. [00:12:13] Speaker 01: No? [00:12:13] Speaker 01: That were issued in 1972 and earlier. [00:12:15] Speaker 00: Matured at least 30 years. [00:12:18] Speaker 01: Yeah. [00:12:20] Speaker 01: If a bond holder, individual bond holder has lost the bonds but doesn't have the serial number, after six years after maturity, if I understand correctly, the bond holder is out of luck, right? [00:12:34] Speaker 01: Correct. [00:12:36] Speaker 01: Okay. [00:12:36] Speaker 01: And it used to be that for bonds that were issued later, I guess in 74 or whatever, there was something called Treasury Hunt. [00:12:46] Speaker 01: There was a website. [00:12:47] Speaker 01: where you could search for your missing bonds by serial number, that's correct? [00:12:53] Speaker 00: I believe it was, I'm not sure of the year, and I believe there were at least for some bonds, the Social Security number was included in the registration information. [00:13:05] Speaker 01: Well, and that's referenced in footnote six of the Third Circuit opinion, okay, in the text there. [00:13:12] Speaker 01: But that website no longer exists. [00:13:14] Speaker 01: What's happened here? [00:13:17] Speaker 01: Why is it not possible to search for these bonds on this Treasury Hunt website that used to exist? [00:13:27] Speaker 00: Again, this website wouldn't have applied to the older bonds. [00:13:33] Speaker 00: I don't actually know the reason why it doesn't currently exist, but I'm fairly sure there [00:13:38] Speaker 00: was a requirement to enter a Social Security number, and that may have had privacy implications. [00:13:43] Speaker 00: So I don't know, but again, this is not an argument for extinguishing the rights of people who have their bonds to cash them, which is the issue in this case. [00:13:53] Speaker 00: That's what, just when I turn, I know the statistics may seem dry, but they're very important. [00:13:58] Speaker 00: The chart that the plaintiffs sent in last week [00:14:01] Speaker 00: leaves no doubt that a million people each year are actually cashing the bonds that the laws of the plaintiffs and their amici would deem abandoned. [00:14:08] Speaker 01: Yeah, but there's a whole group of people who have lost bonds, who don't have the serial numbers, and who are out of luck, right? [00:14:16] Speaker 00: To the extent there are such people, and Treasury doesn't... You know that there are a lot of people like that, right? [00:14:21] Speaker 00: Well, if people came to Treasury and said, [00:14:25] Speaker 00: I think I own bonds. [00:14:27] Speaker 00: I don't know anything about them except that they were sold in Kansas before 1978 is actually the Arkansas date, 1972 is the Kansas date. [00:14:36] Speaker 00: Treasury would not be able to help them. [00:14:38] Speaker 00: The records are indexed by serial number. [00:14:41] Speaker 00: There are 3.8 billion bond records. [00:14:44] Speaker 00: They're on microfilm. [00:14:45] Speaker 00: They're not searchable by State. [00:14:47] Speaker 00: So it's not clear. [00:14:49] Speaker 00: You know, it's not surprising that the regulator. [00:14:52] Speaker 01: They're not searchable by Social Security number. [00:14:54] Speaker 00: only for certain categories of bonds. [00:14:57] Speaker 00: And in any event, the plaintiffs don't have the social security number. [00:14:59] Speaker 00: And more important, they have no evidence that these bonds were lost. [00:15:03] Speaker 00: The lost bond regulations are protection for the original owner. [00:15:09] Speaker 01: So if Janice came in... Which bonds in the category we're talking about that is issued before 1972 are searchable by social security number? [00:15:19] Speaker 00: I don't believe the older ones are. [00:15:21] Speaker 00: I think [00:15:22] Speaker 00: Again, this has not been briefed, and I don't recall if it's 1978, but I don't believe the older ones are searchable. [00:15:28] Speaker 00: Again, this was with the website, and that was definitely more recent bonds than the ones at issue here. [00:15:34] Speaker 00: But I just want to make sure the fundamental point is not missed, which is that Treasury is being asked to violate its contracts with its bond owners. [00:15:44] Speaker 00: John has paid $375 in 1971 for a Series E bond. [00:15:49] Speaker 00: which she cashed in 2017 for $2,533. [00:15:52] Speaker 01: You're not being violated in the contracts with the bondholders if the regulation were interpreted to permit SG proceedings. [00:16:02] Speaker 00: That's correct, right? [00:16:04] Speaker 00: Not SG generally. [00:16:05] Speaker 00: If the regulation were read to allow states carte blanche authority to extinguish the rights of unknown owners. [00:16:13] Speaker 01: Wait, wait, wait. [00:16:13] Speaker 01: What do you mean, carte blanche authority? [00:16:17] Speaker 01: If we interpret the regulation, [00:16:19] Speaker 01: as permitting states to eschete bonds and to claim them, then there's no problem, right? [00:16:26] Speaker 00: No, no, that's not right. [00:16:27] Speaker 00: Traditional eschete, this has nothing to do with real traditional eschete, which means the bonds are in fact abandoned. [00:16:33] Speaker 00: There's abandoned property. [00:16:35] Speaker 00: It came into a state's possession. [00:16:36] Speaker 00: The state has done, tried to identify a known owner, unsuccessfully can't find any heirs. [00:16:43] Speaker 00: Under those circumstances, [00:16:45] Speaker 00: That's the only context in which Treasury has ever allowed a state to redeem an abandonment. [00:16:50] Speaker 02: But to follow up on Judge Dyck's question, if we interpret the regulation to permit any state sanctions as sheet proceeding, even include the one that you're objecting to, then there is no preemption question there. [00:17:04] Speaker 02: And in fact, the federal law now permits this sort of thing. [00:17:08] Speaker 00: The flag that is not a reasonable interpretation of the regulation, there is still the independent problem, this is important, [00:17:15] Speaker 00: that they cannot get money from the federal treasury without satisfying the subpart H redemption requirements. [00:17:23] Speaker 00: This is the principle recognized in Doe versus Union. [00:17:25] Speaker 01: Put to one side your alternative argument that they step into the shoes of the bondholder and the bondholder has no rights after six years after maturity to get the bond without the serial number. [00:17:35] Speaker 01: Let's put that aside, okay? [00:17:37] Speaker 01: It is true, is it not, that if we construe this regulation as permitting states [00:17:42] Speaker 01: to escheat this property and to claim the bonds, then there is no preemption problem. [00:17:49] Speaker 00: If their interpretation of a regulation is correct, there's not a preemption problem, I'm resisting the kind of general use of the term escheat, because this is nothing like real escheat as traditionally recognized. [00:18:01] Speaker 02: No, we understand. [00:18:02] Speaker 02: Your view is there's a traditional, conventional form of escheat, and then there's this [00:18:06] Speaker 02: manufactured newfangled form of this cheat, and that's the part you have an objection to. [00:18:10] Speaker 00: Yes, but I want to take it even further. [00:18:12] Speaker 00: On their logic, and the logic of Judge Kaplan in this case, Kansas could pass a law that says all bonds sold to people who lived in Kansas are mine. [00:18:20] Speaker 00: And that would be it. [00:18:21] Speaker 00: As long as they got a state court to say, yes, they're yours, that's how they read this regulation. [00:18:26] Speaker 00: It has nothing to do with the number of years they put on as an abandonment period. [00:18:31] Speaker 00: They're saying valid means in state law and now embodied in a state court judgment. [00:18:36] Speaker 00: And I'm just making the point, this is an absurd reading of a regulation that is the Supreme Court in Freiburg. [00:18:42] Speaker 01: Wait, wait, wait. [00:18:43] Speaker 01: I think you're sort of overstating it. [00:18:45] Speaker 01: Let's assume that their position is that [00:18:49] Speaker 01: The bonds that have matured and haven't been claimed, let's say, within six years, haven't been redeemed within six years, that those bonds is cheap. [00:19:00] Speaker 01: And we can have an as cheap proceeding that vests the title to those bonds in the state. [00:19:08] Speaker 01: And if the regulation is read to permit that, then there's no preemption problem. [00:19:15] Speaker 01: I mean, I understand you don't want to read the regulation that way, and you say we shouldn't read the regulation that way, but that's the consequence, right? [00:19:23] Speaker 00: I'm explaining why the logic of their reading... No, no, no, no. [00:19:27] Speaker 01: Answer my question. [00:19:29] Speaker 00: The regulation cannot be read that way, consistent with... I understand, but if we do read it that way... The court would have to disregard the purpose of the program as... If the regulation covers any valid state order, [00:19:43] Speaker 04: and this is a valid state order, it's not preempted. [00:19:47] Speaker 04: Your view is that these aren't valid state orders within the meaning of that term because they conflict with the rights of the bondholders. [00:19:54] Speaker 00: Yes. [00:19:56] Speaker 01: But how can they conflict with the rights of the bondholders if the regulation allows it? [00:20:00] Speaker 00: The regulation does not allow a state to take away the right. [00:20:05] Speaker 01: Of course, that's your position. [00:20:06] Speaker 01: But I'm saying hypothetically, we reject that. [00:20:10] Speaker 00: You lose, right, on this issue. [00:20:12] Speaker 00: No, I want to go back to what Chief Justice Orl Warren said for the unanimous Supreme Court in free versus bland. [00:20:18] Speaker 00: Because we cannot suspend just a common sense understanding of this program, which is that the success. [00:20:25] Speaker 01: I think, unless my colleagues have questions, we're out of time. [00:20:27] Speaker 01: We'll give you two minutes for rebuttal. [00:20:34] Speaker 01: Mr. Frederick? [00:20:36] Speaker 05: Thank you, Your Honor. [00:20:37] Speaker 05: I'd like to look at the text of the regulation. [00:20:40] Speaker 05: It's on addendum page 17. [00:20:41] Speaker 01: Okay, but just as a predicate to that, do you agree that basically the question is here, how do we interpret this regulation? [00:20:47] Speaker 01: If we interpret the regulation the government's way, you lose. [00:20:52] Speaker 01: If we interpret it your way, you win. [00:20:56] Speaker 01: We don't have to look to conflict preemption. [00:20:59] Speaker 01: We're just basically dealing with an interpretive question. [00:21:01] Speaker 05: That's correct. [00:21:02] Speaker 05: It's an interpretive question of the regulation, and that's why if we could just look at the text, it's an addendum, page 17, to the Laturner brief. [00:21:10] Speaker 05: Most of the questions that you asked are answered by the text of the regulation. [00:21:15] Speaker 05: And so Judge Hughes, your question about the list in the safety deposit box, if there were a divorce proceeding, [00:21:22] Speaker 05: and the bonds were listed with the title in the husband's name and the divorce court and state court said actually this property will belong to the wife. [00:21:32] Speaker 05: B says that is a valid judicial proceeding and those bonds would be transferred their ownership to the wife and Treasury will recognize that. [00:21:43] Speaker 05: That's what the valid judicial proceeding part of the general rule of B means. [00:21:49] Speaker 05: Now [00:21:50] Speaker 05: Treasury doesn't actually want to talk about the plain language of the regulations, but it contains the only two specific references where Treasury will not recognize a valid judicial proceeding. [00:22:04] Speaker 05: That's in A. That's when there's a proposed inter vivos transfer, or there's one that would interfere with a co-owner's beneficial rights. [00:22:14] Speaker 05: So to take your example again, Judge Hughes, [00:22:17] Speaker 05: If there was a list in the safety deposit box, and it was a World War II veteran who had listed these in the name of himself and his son, and there was a divorce proceeding, that would be covered by A, so that the state court that sought to transfer the ownership interest to the wife would not be permitted to do that because that would be an attempt to interfere with a co-owner's beneficial rights. [00:22:43] Speaker 05: We don't have either of those hypothetical situations here. [00:22:46] Speaker 05: What we have is a situation under B where a general validity of its state judicial proceeding under state law applies, and Treasury has disavowed an interest in knowing who the owner of the bond is. [00:23:03] Speaker 05: They've done that throughout 315.20, A, B, and C. [00:23:09] Speaker 05: And so the only question now is, is there room for state law to apply? [00:23:14] Speaker 05: There clearly is, because the regulations set that out. [00:23:18] Speaker 05: And then the question is, do the regulations provide for determining what a valid judicial proceeding is? [00:23:25] Speaker 05: And that's what B says. [00:23:27] Speaker 05: The pointer there is to look at 315.23. [00:23:31] Speaker 05: And the way you prove the validity of a state judicial proceeding [00:23:35] Speaker 05: is you provide a certified copy of it, if it is a general proceeding. [00:23:38] Speaker 02: There's another way to read B, though. [00:23:40] Speaker 02: B says that maybe it's just the valid judicial proceedings that are specifically provided for in this subpart. [00:23:48] Speaker 02: And then you go to 3315.21 and 22, and you see the different types of judicial proceedings enumerated there. [00:23:57] Speaker 02: And perhaps those are the ones that are how we should understand what valid judicial proceedings [00:24:05] Speaker 05: The problem with that interpretation, Judge Chen, was identified by Judge Kaplan in the decision below, where she said if you were to read it that way, you would turn A into a nullity, because the A provisions, the inter vivos transfer and the interference with the co-owner's beneficial rights, are not referenced elsewhere in the specific provisions. [00:24:27] Speaker 05: And so the way she read the general rule of B is [00:24:31] Speaker 05: Yes, we're going to have more specific evidentiary rules for the divorce context or for a judgment creditor context. [00:24:38] Speaker 05: But in the general context, we're going to allow the validity of the judicial proceedings to apply. [00:24:44] Speaker 05: So if you were to take other kinds of state law proceedings, suppose it wasn't just a divorce, but suppose it was just a property settlement. [00:24:52] Speaker 05: Those are common in a case of a separation. [00:24:55] Speaker 05: Those would be covered under the valid judicial proceedings that are not specifically covered by divorce. [00:25:01] Speaker 05: Suppose the person died in test state and the question was what heirs might apply. [00:25:06] Speaker 05: Classic state law question, valid judicial proceedings would make that determination and it would be done on the basis of what a certified state court judgment would be. [00:25:17] Speaker 01: But it seems to me that there's another provision of the regulations which you have to deal with and that's 315.15. [00:25:24] Speaker 01: which says savings bonds are not transferable and are payable only to the owners named in the bonds, except as specifically provided in these regulations. [00:25:32] Speaker 01: So that provision seems to say, okay, you've got to find a specific provision in the regulations that authorizes this, and that can be read as saying that if later provisions of the regulations are ambiguous as to whether they'll have an exception to that or not, then the claimant loses. [00:25:53] Speaker 05: Judge Kaplan addressed that too, Judge Dyken. [00:25:55] Speaker 05: What she said was that that provision is a reference to .20B, which is that when a state law [00:26:03] Speaker 05: deals with transfer of ownership by virtue of a proceeding, then you will be able to trigger that transfer of ownership right in your satisfying .15. [00:26:14] Speaker 01: I'm more interested right now in what you're arguing rather than what Judge Kaplan said, but is your view that 315.15 doesn't apply here? [00:26:24] Speaker 05: Correct. [00:26:25] Speaker 01: And that's because what? [00:26:26] Speaker 05: Because .20B does apply here. [00:26:31] Speaker 05: We have a situation where the State went to court. [00:26:33] Speaker 01: No, no, no, but that's not, that doesn't tell me that 315.15 doesn't apply. [00:26:39] Speaker 01: What you're saying is the specific provision that's required by 315.15 is in 315.20B. [00:26:48] Speaker 01: That's the argument, right? [00:26:49] Speaker 05: Yes, the argument is that, the argument is that 315.15 does not create an immutable ownership right in the original bondholder. [00:27:00] Speaker 01: But it does seem to require a specific provision that creates an exception to that. [00:27:09] Speaker 05: And the exception to it is in 315.20B, Your Honor, and A and C. So suppose we were to find that 315.20B is ambiguous. [00:27:21] Speaker 01: Doesn't then 315.15 tell us that that doesn't qualify? [00:27:26] Speaker 05: No. [00:27:27] Speaker 05: No, because the 315.20b is a general provision and we know from the other surrounding regulations that 315.15 doesn't make an immutable right to ownership in the original bondholder because Treasury has recognized state transfer rights in a number of different circumstances and the only question is whether the general rule that says if you are going to seek to use state law to transfer ownership interests [00:27:56] Speaker 05: Will you have it through a valid judicial proceeding? [00:28:00] Speaker 05: And so that question has been resolved by Treasury. [00:28:04] Speaker 05: And to further answer your question, Judge Hughes, about the list, that scenario happened. [00:28:10] Speaker 05: The state of Florida had a list of serial numbers. [00:28:13] Speaker 05: It sent the bonds back to Treasury. [00:28:15] Speaker 05: And then when this litigation rose, it called up Treasury. [00:28:19] Speaker 04: What do you mean it sent the bonds back? [00:28:20] Speaker 05: It got them. [00:28:21] Speaker 05: Did it have? [00:28:22] Speaker 05: It had the bonds and it sent them back, but it kept the serial numbers. [00:28:26] Speaker 05: And when it then became aware of this litigation, it wrote to Treasury and it said, you know, we sent you back the bonds. [00:28:33] Speaker 05: We don't possess them anymore. [00:28:34] Speaker 04: Yeah, but that's not really my hypothetical. [00:28:36] Speaker 04: In that case, in my hypothetical, the state actually never comes into physical possession of a bond. [00:28:42] Speaker 04: In that case, they had them. [00:28:43] Speaker 04: They just sent them back. [00:28:44] Speaker 04: But the question is different. [00:28:46] Speaker 04: That really is a different question. [00:28:47] Speaker 04: It does seem to me to turn on this notion of the only time Treasury has ever given [00:28:53] Speaker 04: money over to states is when they had physical possession of a bond and could go through sufficient proceedings to, to conclude that it was lost by the original owner. [00:29:04] Speaker 05: I think Judge Hughes that you would take their, let's look at the word question about possession. [00:29:10] Speaker 05: Okay. [00:29:10] Speaker 05: There's a plain language answer to that one too, which is 315.20C. [00:29:15] Speaker 05: The only place where possession of the bond is mentioned is there. [00:29:21] Speaker 05: And that's where Congress will not recognize notice, or sorry, the Treasury will not recognize notice of a proceeding or notice of a claim unless the person has the bond in possession. [00:29:34] Speaker 05: It doesn't say that in B for the valid judicial proceedings. [00:29:38] Speaker 05: And we know why. [00:29:39] Speaker 05: Because when bonds are mutilated or they're lost or they're in the hands of someone else, a contentious divorce, for instance, where [00:29:48] Speaker 05: The husband says, I'm not going to give it up, even if the State court says give it to the wife. [00:29:53] Speaker 05: The bonds are permitted to have a redemption proceeding. [00:29:57] Speaker 05: And that's why we know that the mere possession of this has never been enough. [00:30:03] Speaker 05: And Treasury's guidance throughout the years has been possession is not enough. [00:30:07] Speaker 05: All you have is a piece of paper, or in Ms. [00:30:10] Speaker 05: Klein's example, a photocopy of a piece of paper. [00:30:14] Speaker 05: And possession has never been enough [00:30:17] Speaker 05: unless you also have title ownership. [00:30:19] Speaker 05: And that's why the Secretary of the Treasury in 1952 said, if the States want to do this, they're going to have to change their escheat regimes to have title escheat, because the true interest that Treasury has, not double payment. [00:30:33] Speaker 04: But why should we do that as requiring both title receipt and possession? [00:30:37] Speaker 05: Because the regulations don't say that. [00:30:39] Speaker 04: But your position gives the states more right than the actual bond holder, because in your scenario, you don't have to have possession. [00:30:48] Speaker 04: Whereas if a person more than six years doesn't have possession, has lost it, can't find it anymore, they can't get it without the serial numbers. [00:30:59] Speaker 05: And your honor, I think let's- You don't have neither. [00:31:00] Speaker 04: You don't have the serial numbers and you don't have possession. [00:31:03] Speaker 05: And for all practical purposes, the original bond holders are probably all dead. [00:31:08] Speaker 01: I think this raises the question of the government's alternative argument that if you step into the shoes of the bondholder, you can't have any greater rights than the bondholder. [00:31:19] Speaker 01: How is it that you have the right to redeem these bonds without the serial numbers? [00:31:26] Speaker 05: There are two different routes to that, Judge Dyke. [00:31:28] Speaker 05: One is through the sub-part that concerns the valid judicial proceedings, which provides in certain circumstances for Treasury simply to [00:31:37] Speaker 05: do what is necessary to determine the value of the extant bond. [00:31:42] Speaker 05: So in the event of a judgment creditor or in the event of a divorce where the bond has been lost or mutilated or whatnot, Treasury then pays out a redeemed amount of money. [00:31:52] Speaker 05: Judge Kaplan and the court will- Wait, wait. [00:31:54] Speaker 01: I'm not, I'm sorry. [00:31:55] Speaker 01: I'm not following this at all. [00:31:58] Speaker 01: Let's assume that the SG proceedings are valid, that you step into the shoes of the bondholder, but you do not have the serial numbers. [00:32:07] Speaker 01: How is it that you can claim a right to redeem the bonds under those circumstances? [00:32:13] Speaker 05: In the regulations that I'm talking about, there are two different sets of regulations, so let's be clear. [00:32:17] Speaker 05: I'm talking about those that are in the subparts .20 through .25 part of the... Those say that you do not necessarily have to know the serial number or have possession of the bond. [00:32:30] Speaker 05: But if you have other identifying information that would enable Treasury to determine the value of bond, they will pay on those redemptions. [00:32:38] Speaker 05: Judge Kaplan said because of this preemption issue, she's not going to decide... Is that within the six-year period? [00:32:44] Speaker 05: No. [00:32:45] Speaker 01: Those are not within... So you believe that even after the six-year period that an individual can redeem a bond without the serial number? [00:32:55] Speaker 05: If there is appropriate identifying information, yes. [00:32:59] Speaker 01: And Treasury... Which regulation are we talking about here? [00:33:02] Speaker 05: Well, it depends on an individual who had lost the bond. [00:33:06] Speaker 05: If other identifying information could be ascertained, I don't... Just show us the language. [00:33:13] Speaker 01: What language in the regulation says that an individual can redeem after the six-year period without a serial number? [00:33:22] Speaker 05: I would say that the [00:33:26] Speaker 05: Point 22, which talks about a certified copy of a judgment or a decree determining the extent of the interest, it will be reissued. [00:33:36] Speaker 01: But we're talking about an individual. [00:33:37] Speaker 01: That's what I'm talking about. [00:33:39] Speaker 01: What decree? [00:33:41] Speaker 01: An individual has a lost bond and comes in because I'd like to redeem my bond. [00:33:46] Speaker 01: The Treasury says, no, after six years you can't do it without the serial number. [00:33:51] Speaker 01: Where does this say that that individual can [00:33:54] Speaker 01: get the proceeds without the serial number. [00:33:58] Speaker 05: The individual rules leading up to point two five is where there is a situation, your honor, of these kinds of proceedings. [00:34:07] Speaker 05: Are these regulations in the appendix somewhere? [00:34:09] Speaker 05: Yes, they are in the addendum. [00:34:10] Speaker 05: They are in the addendum. [00:34:13] Speaker 01: They're in the back of the agenda. [00:34:17] Speaker ?: Okay. [00:34:21] Speaker 05: So, Judge, I can answer your question. [00:34:23] Speaker 05: Point 29C says that the owner can ask Treasury to get the appropriate information. [00:34:29] Speaker 05: Now, it says that the owner has to supply the serial number, but the point, I think that... Wait a minute. [00:34:39] Speaker 05: That's the whole point. [00:34:40] Speaker 05: You can't supply the serial number. [00:34:42] Speaker 04: And, Judge Hughes, here's the question that we are faced with. [00:34:46] Speaker 04: You don't have any identifying information for any of these bonds, right? [00:34:50] Speaker 04: Correct. [00:34:51] Speaker 04: And if there was a person that had lost their bonds after six years and had no identifying information whatsoever, didn't know serial numbers, didn't know social security numbers, didn't know anything except they thought they might have a bond, is there a procedure for that individual person to go to Treasury and ask for a bond? [00:35:11] Speaker 04: And where is it in the regulation? [00:35:13] Speaker 05: We believe there is. [00:35:14] Speaker 05: Can you show me in the regulations? [00:35:16] Speaker 05: I can't show you on this. [00:35:19] Speaker 05: It's standing here right now. [00:35:20] Speaker 05: I'll be happy to send a letter to the court. [00:35:22] Speaker 05: But what I would say... If the person can't do it, can you do it? [00:35:27] Speaker 04: The person... Let's just assume we read the regulations as prohibiting a person from redeeming a bond after six years without the serial number or some other kind of identifying information. [00:35:40] Speaker 04: They just can't do it. [00:35:41] Speaker 04: They're out of luck. [00:35:42] Speaker 04: Treasury gets to keep the money. [00:35:44] Speaker 04: If they can't do it, can you? [00:35:47] Speaker 05: We stand in the same shoes as the original owner, Judge Hughes. [00:35:52] Speaker 04: So is that a no then, that if they can't do it, you can't do it? [00:35:57] Speaker 05: Yes, I think that's correct. [00:35:58] Speaker 05: But I think that the point is what the Treasury representative, the 30B6 witness said, is that the State would have the same rights as an original owner. [00:36:08] Speaker 05: And I think it would be unconscionable to think [00:36:10] Speaker 05: that Treasury, if confronted with the names of people who had Kansas' last known addresses or had other information that an heir had provided and bought a bond, the Treasury would do nothing, because nothing in the statute allows Treasury to keep the money, and nothing in the regulations allows Treasury to keep the money. [00:36:30] Speaker 01: It says in 31529, claims filed after six years, no claim filed after six years of war after final maturity, [00:36:38] Speaker 01: of a savings bond will be entertained unless the claimant supplies the serial number of the bond. [00:36:42] Speaker 01: That may be unfair, but it seems to be pretty clear. [00:36:45] Speaker 05: Well, the question, I think, Judge Dyke, is before you get to that, is there a process or a requirement imposed on Treasury to actually work with the original bond owner who is, in fact, the person who loaned the money to Treasury in order to figure out [00:37:02] Speaker 05: Is there some identifying information that would enable Treasury to do this? [00:37:06] Speaker 05: And notably, they don't give practice. [00:37:08] Speaker 05: We didn't get to do discovery on how they actually implement this regulation. [00:37:13] Speaker 02: Judge Kaplan... Is the only regulation you have the waiver regulation? [00:37:16] Speaker 02: Yes. [00:37:17] Speaker 02: Basically insist and command the Treasury to waive all of these requirements and then force them to go [00:37:26] Speaker 02: get to work and start digging through their records? [00:37:28] Speaker 05: Well, what we have, what we proposed to Judge Kaplan was that there be a process by which the state would try to work with Treasury and there would be an exchange of information in a way that would enable the state to assist in identifying and using searchable means to go through these old records to determine if there are errors, because the states actually have a political interest in... And would an individual bond owner who had lost his or her bond and had [00:37:55] Speaker 02: It's been more than six years after the bond matured. [00:37:58] Speaker 02: Have the right through the waiver regulation to demand Treasury to waive all of its rules and help that bond owner find the serial number? [00:38:08] Speaker 02: We don't know. [00:38:09] Speaker 02: Treasury has not. [00:38:10] Speaker 02: But you're standing in the same shoes as that bond owner. [00:38:14] Speaker 02: So you're telling me, I think, that there's something special about you. [00:38:20] Speaker 05: We have, I would say what's special about us is we have [00:38:25] Speaker 05: the status as a sovereign of this country to go to Treasury and have to be able to do this. [00:38:31] Speaker 01: Someone who has to... I don't understand how that can give you greater rights than the bond holder. [00:38:35] Speaker 05: It doesn't give us greater rights. [00:38:36] Speaker 05: It gives us a greater interest in actually going to the fight with Treasury where they're trying to play a hide-the-P-in-the-shell game, frankly. [00:38:44] Speaker 03: Why do you think it's a class action on behalf of the bondholders, not the states? [00:38:49] Speaker 05: Because what the secretary in 1952 said [00:38:53] Speaker 05: is that the states can use their cheat laws if they get title to the bonds. [00:38:59] Speaker 05: And so all we've been doing for half a century, Judge Hughes, is to try to comply with the ever-changing requirements that Treasury has imposed. [00:39:07] Speaker 04: It doesn't seem that it's all that ever-changing. [00:39:10] Speaker 04: The one key factor is they've always required you to have possession of the physical bond. [00:39:14] Speaker 05: Well, no, actually, that is not correct. [00:39:17] Speaker 05: Because if you look at the 1952 guidance, if you look at the 1982 letter to the Massachusetts [00:39:22] Speaker 05: If you look at the 2006 letter to Florida, if you look at the Solicitor General's brief in the New Jersey case, possession is not mentioned. [00:39:34] Speaker 03: I'm not aware of that. [00:39:40] Speaker 05: But the question is not whether or not there's any historical practice. [00:39:45] Speaker 05: The question is, has the State got a valid judicial proceeding [00:39:50] Speaker 05: that has rewarded titleless cheat. [00:39:53] Speaker 01: I think the question is what are you making out of this history and the various statements that you rely on in the Solicitor General's brief and the Third Circuit case and the bulletin and so on and so forth. [00:40:04] Speaker 01: Are you suggesting that those statements [00:40:07] Speaker 01: mean that we should give our deference to your interpretation of the regulation? [00:40:11] Speaker 01: What is the significance? [00:40:13] Speaker 05: Well, I think that the significance is that they are not entitled to our deference because of the inconsistency in their position, and that's how Judge Kaplan ruled it. [00:40:21] Speaker 01: And if you were to think... Can you rely on our deference? [00:40:24] Speaker 05: We don't rely on our deference because they've been inconsistent. [00:40:27] Speaker 05: Okay. [00:40:27] Speaker 05: And so we believe that our deference is completely inappropriate in this situation. [00:40:33] Speaker 05: I would note that the conundrum on the redemption issue, I would ask you not to resolve the case on that. [00:40:40] Speaker 05: We argued before Judge Kaplan that there can be a process to determine which of these regulations, whether or not they're lost or have a process for identifying serial numbers and last known addresses, that process should play out if this Court were to agree with us that the general valid. [00:40:57] Speaker 04: I just don't understand why, if we're going to force that process on the government, [00:41:02] Speaker 04: with all the costs it entails, why we wouldn't force it on them to at least first identify the actual bondholders. [00:41:09] Speaker 05: Because if you were to do that, Judge, you would be then saying that instead of loaning money to the United States, these people were making a gift to the United States if they lost their bond or lost track of it. [00:41:20] Speaker 05: And there's nothing in the statute that does that. [00:41:22] Speaker 04: Well, if that's the regulations that were in place, that if beyond six years you've lost it and don't have the serial numbers, then they bought them [00:41:31] Speaker 04: with that framework in place. [00:41:33] Speaker 04: There's all kinds of things that you get, and if you don't redeem it in time or the like, you don't get your money back. [00:41:39] Speaker 05: Your Honor, on page 45 of our brief, we point out all the statutes where Congress had put an express federal abandonment provision, and this isn't one of them, including the trust funds provision that we cited at the top of page 45. [00:41:53] Speaker 01: I think that the assumption, the background assumption with Congress... Well, this is different from that in the sense that here there's no cutoff. [00:42:00] Speaker 01: The government is saying if you discover the bond itself or the serial number for the bond itself 30 years later, you can come in. [00:42:10] Speaker 01: There's no statute of limitations on that. [00:42:13] Speaker 02: The regulation says you can redeem at any time, right? [00:42:16] Speaker 05: Well, actually the regulation does not say that. [00:42:19] Speaker 05: They don't cite a specific rule as to that. [00:42:23] Speaker 05: Your Honor, and I apologize that I'm late in time to do this, but on addendum page 28, there's a rule governing availability. [00:42:32] Speaker 01: Which addendum? [00:42:33] Speaker 05: Addendum to our brief. [00:42:35] Speaker 05: It's 323.2 that provides, providing information and the available, rules governing the availability of information. [00:42:45] Speaker 05: And my colleague indicates that the owner can request obtaining. [00:42:50] Speaker 01: 315.23. [00:42:52] Speaker 05: Yes, 323.2. [00:42:53] Speaker 05: It's an addendum, page 28. [00:42:55] Speaker 01: 323.2. [00:43:01] Speaker 05: Addendum, page 28. [00:43:09] Speaker 01: Yes. [00:43:14] Speaker 05: And it says, there are limitations, but it says that information [00:43:19] Speaker 05: will ordinarily be disclosed only to the owners of such securities. [00:43:23] Speaker 05: The point here is that if the state is the owner by virtue of the valid judicial proceeding awarding title as chief, we stand in the shoes of the owner and we can request information from Treasury in order to get the identifying information and the serial numbers. [00:43:38] Speaker 05: I think if you were to not do that, you are essentially saying to Treasury that they get to keep all of the money where they have [00:43:48] Speaker 05: no record, and they pulled down the Treasury Hunt website, so there's no practical way for people actually to easily identify whether or not they have an ancestor who had bought one of these bonds. [00:44:01] Speaker 01: And you have... But this provision doesn't give you a right to ask the Treasury to give you the serial numbers of the bonds, right? [00:44:09] Speaker 05: Well, it says that information will ordinarily be disclosed only to the owners of such securities, their executors, administrators, [00:44:16] Speaker 01: Right. [00:44:16] Speaker 01: But it doesn't say that the owner of the securities can come to the Treasury and say, please spend a lot of money searching your records to give me the serial numbers of my bonds. [00:44:26] Speaker 05: Well, Judge, Judge Dyke. [00:44:28] Speaker 01: No, but does it say that? [00:44:30] Speaker 05: What it does say is that if I'm an owner of a bond, I have a right to go to Treasury and say, I don't have the identifying information. [00:44:37] Speaker 05: I lost my bond. [00:44:38] Speaker 05: But here are identifying pieces of information that would allow for some search. [00:44:44] Speaker 05: I think Judge Dyke, too, said, [00:44:46] Speaker 04: Again, what regulation allows them to do that and what kinds of identifying information? [00:44:54] Speaker 05: Typically, it would be name, last-note address. [00:44:58] Speaker 04: We don't have any of that. [00:45:00] Speaker 05: We know to a certainty, Judge Hughes, that there were people in Kansas with last-notes address in Kansas who [00:45:08] Speaker 05: had bought these bonds, and they are now lost, and they were subject to the SG judgment. [00:45:13] Speaker 04: We don't know. [00:45:14] Speaker 04: But you don't have any identifying information at all. [00:45:16] Speaker 04: You have this vast hypothetical universe, and you're saying, Treasury, go look for us. [00:45:21] Speaker 04: I mean, if we apply that to bondholders, it would be a general notion to everybody that in the United States or elsewhere, we may have a bond. [00:45:29] Speaker 04: Give us your name, and we'll go look for it. [00:45:32] Speaker 04: That can't be what that provision means. [00:45:34] Speaker 05: Judge Hughes, I would ask you to separate [00:45:38] Speaker 05: the question of process because we haven't gone through that part of the litigation yet. [00:45:44] Speaker 05: And I would submit that the state, because there is an indemnification provision, will indemnify Treasury and engage in a process to use computerized search techniques in which the states are willing to contribute to the costs. [00:45:58] Speaker 05: We haven't even gotten to that question. [00:46:01] Speaker 05: And so all of these very difficult questions about redemption and which rules apply are premature because Judge Kaplan [00:46:07] Speaker 05: did not think it was appropriate at that stage of the litigation to answer that question. [00:46:13] Speaker 05: And I appreciate that these are tricky. [00:46:15] Speaker 05: I appreciate that these are tricky. [00:46:16] Speaker 05: But the question fundamentally comes back to, is the Titleist cheat a valid judicial proceeding? [00:46:21] Speaker 05: And we submit that it is. [00:46:23] Speaker 01: OK. [00:46:23] Speaker 01: Thank you. [00:46:24] Speaker 01: We're out of time. [00:46:26] Speaker 01: This line of comments here. [00:46:31] Speaker 01: Could you address first [00:46:33] Speaker 00: That's the FOIA regulation that Judge Kaplan explicitly disavowed reliance on in the order certifying for interlocutory appeal. [00:46:44] Speaker 00: That's not part of the bond contract. [00:46:46] Speaker 00: It's a limitation on the general disclosures under FOIA. [00:46:51] Speaker 00: And she properly recognized that if Kansas had wanted to seek review of the denial of their FOIA claim, they would have had to go to the district court in DC. [00:47:00] Speaker 00: The reason, presumably they didn't, [00:47:02] Speaker 00: is that it's well established in the DC Circuit that FOIA doesn't require an agency to reorganize its records and Treasury doesn't maintain records based on the state of the address of the bond owner. [00:47:15] Speaker 00: On the actual bond regulations, they are asserting rights that no bond owner would have. [00:47:21] Speaker 00: This is the plain language of 315.29, the adjudication of a claim for lost bonds. [00:47:28] Speaker 00: No claim filed six years or more [00:47:31] Speaker 00: after the final maturity of a savings bond will be entertained unless the claimant supplies the serial number of the bond. [00:47:40] Speaker 00: And that's because Treasury doesn't index its records in a way that will allow it to find these bonds without the serial number. [00:47:48] Speaker 00: There is no need for discovery for the proceedings to apply the plain language of the regulations that govern all bond owners. [00:47:55] Speaker 00: We moved for summary judgment on this ground. [00:47:57] Speaker 00: The court denied our motion. [00:47:59] Speaker 00: It's before this court. [00:48:00] Speaker 00: And the point of this interlocutory appeal is to avoid the enormous expenditure of resources that Judge Kaplan recognized would be entailed even to figure out which bonds the plaintiffs are asking to redeem. [00:48:14] Speaker 01: Has there ever been any litigation between Treasury and individual bondholders trying to force the Treasury to search for the serial numbers of lost bonds? [00:48:24] Speaker 00: Not as far as I know. [00:48:26] Speaker ?: No. [00:48:27] Speaker 00: And again, just one last point. [00:48:29] Speaker 00: The bonds that are actually at issue here, there's no reason to think they're lost. [00:48:33] Speaker 00: There's no reason to think the owners lost them. [00:48:35] Speaker 00: Treasury just wants to be allowed to redeem them when the owners come to Treasury. [00:48:39] Speaker 02: Can I ask you about 31520B again? [00:48:43] Speaker 02: Yes. [00:48:43] Speaker 02: The other side refers us to 31520A. [00:48:47] Speaker 02: And because of what's discussed in 31520A, that should inform us that what is enumerated and the regulations that follow 31520B shouldn't [00:48:59] Speaker 02: constrain the scope of what a valid judicial proceeding is? [00:49:04] Speaker 00: To answer, I'd like to go to the regulation that Judge Dyke was quoting, which is the background rule, 315.15. [00:49:11] Speaker 00: Savings bonds are not transferable and are payable only to the owners named on the bonds, except as specifically provided in these regulations, and then only in the manner and to the extent so provided. [00:49:24] Speaker 00: So then you go to 315.20b, [00:49:28] Speaker 00: It says nothing about a sheet. [00:49:31] Speaker 00: It has specified proceedings, divorce, bankruptcy, judgment, creditor, and gifts in anticipation of death. [00:49:37] Speaker 00: And that's it. [00:49:37] Speaker 00: This is what Treasury explained in its regulations. [00:49:39] Speaker 00: But then if you keep going down to the provision that 31520B cross-references, which is 31523, it makes clear... The argument is about 31520A and how 31520A is talking about other types of [00:49:58] Speaker 00: So those are not actions. [00:50:02] Speaker 00: Those are even within, for example, bankruptcy. [00:50:06] Speaker 00: Treasury will not recognize a judicial determination that would allow a transfer inter vivos or impair the right of survivorship. [00:50:16] Speaker 00: That's not a category of judicial proceeding. [00:50:18] Speaker 00: The categories of judicial proceedings are what are specifically provided immediately after 31520B, and that is divorce, bankruptcy, [00:50:27] Speaker 00: Judgment Creditor, and GIFS Cosmortis. [00:50:30] Speaker 02: And then 31520A also says all provisions of this subpart are subject to these restrictions. [00:50:36] Speaker 00: Exactly. [00:50:37] Speaker 02: So 20A is announcing some restrictions that are in the context of these other characterized proceedings. [00:50:45] Speaker 00: Yes, Your Honor. [00:50:45] Speaker 00: Even the specifically enumerated proceedings like bankruptcy, you cannot do those things that are set out as general restrictions in A. But then I just want to make sure I finish the point. [00:50:56] Speaker 00: drop down to 315.23, there's no doubt that this is just the first step before presentation of the bond. [00:51:04] Speaker 00: So 315.23 talks about if the judgment or decree is more, was entered more than six months prior to presentation of the bond, then you need to get an updated decree. [00:51:15] Speaker 00: So this is then only leading you to the redemption regulations that all bond owners have to follow, which means either [00:51:24] Speaker 00: surrender the bond, which is in the mind of cases what happens, or in the rare circumstance where the rightful owner has evidence that she in fact lost her bond and can supply the serial number if the bond matured more than six years ago, then there's another way to get redemption, but only if the plain terms of those redemption regulations are met.