The Delaware Supreme Court on Tuesday said it would be up to a federal court judge to decide an Illinois-based company's challenge to the state's unclaimed property collection laws.

A three-judge panel of the high court left in place a Chancery Court decision that stayed a Department of Finance lawsuit seeking to enforce an administrative subpoena that would allow the state to investigate the firm's compliance with the state's escheat laws.

Vice Chancellor Joseph R. Slights III ruled earlier this year that the case before him should be put on hold in favor of Univar's own suit in federal court, where the global chemical and ingredients distributor claims Delaware statute is unconstitutional and improperly allows the state to reach back decades in conducting its audit.

The federal action, he said, encompassed the much narrower issue of whether to enforce the subpoena, and a Chancery Court stay would avoid the possibility of duplication or conflicting rulings. He did, however, indicate that he could be willing to lift the stay, should the district court kick the subpoena issue back to him.

The state asked Slights in April to authorize a direct appeal to the Supreme Court on the grounds that the case raised a novel issue of Delaware law and challenged the constitutionality of state statute.

Attorneys for the Department of Finance argued that a provision of state law charged the Chancery Court with “expeditiously” hearing enforcement actions arising under Delaware's unclaimed property collection laws and that Slight's order, for the first time, touched on the question of whether such actions could be stayed.

The stay, they argued, improperly would allow a federal judge to decide constitutional questions that ought to be left to the state court.

Slights, however, blocked the maneuver, known as interlocutory appeal, in an April 18 order that criticized the state's tactics in trying to litigate the constitutionality of Delaware's escheat laws simultaneously in two different courts.

In his ruling, Slights said the Department of Finance had waited until Univar filed its lawsuit to bring its Chancery Court enforcement action and then refused to seek expedited resolution of threshold constitutional and preemption issues in the U.S. District Court for the District of Delaware.

On Tuesday, Chief Justice Leo E. Strine Jr. agreed that interlocutory appeal was not warranted in the case.

“Duplicative or conflicting proceedings typically do not yield expeditious results,” he said in a 6-page order.

“Exceptional circumstances that would merit interlocutory review of the decision of the Court of Chancery do not exist in this case, and the potential benefits of interlocutory review do not outweigh the inefficiency, disruption, and probable costs caused by an interlocutory appeal.”

An attorney with the Delaware Department of Justice, which is representing the state Tuesday, alerted the U.S. District Court for the District of Delaware to the ruling. Attorneys from both sides were not immediately available to comment.

Univar has claimed that the state's audit is an unreasonable search and seizure, which subjects the company to an unconstitutional taking by the government and deprives it of its due-process rights under the Fourteenth Amendment.

The state is represented in the enforcement action by Caroline Lee Cross and Elizabeth R. McFarlan of the Delaware Department of Justice, as well as Steven S. Rosenthal, Tiffany R. Moseley and John David Taliaferro of Loeb & Loeb in New York and Melanie K. Sharp, Martin S. Lessner, Mary F. Dugan and James M. Deal of Young Conaway Stargatt & Taylor in Wilmington.

Univar is represented by Michael P. Kelly, David A. White and Matthew J. Rifino of McCarter & English and Jameel S. Turner and James G. Ryan of Bailey Cavalieri in Columbus, Ohio.

The enforcement action, filed in the Court of Chancery, is captioned State of Delaware v. Univar.