DANI v. MILLER
2016 OK 35
| Okla. | 2016Background
- Plaintiff Robert N. Dani, an Oklahoma resident, had small sums ($19.56 and $150) turned over to the State under the Oklahoma Uniform Unclaimed Property Act (UUPA); he filed a claim and was paid.
- Dani sued the State Treasurer (Ken Miller) and others challenging the UUPA's constitutionality and administration, seeking damages, declaratory and injunctive relief.
- Central allegations: UUPA creates a trust (with owners as beneficiaries and the Treasurer as trustee), statutory transfers of excess funds and interest to the General Revenue Fund violate trust duties, constitute an unconstitutional debt, effect an uncompensated taking, and deny due process and equal protection; plaintiff also labeled the scheme a "Ponzi scheme."
- The State moved to dismiss for failure to state a claim and asserted sovereign immunity for damages; Dani moved for summary judgment.
- Trial court granted dismissal of all claims and denied summary judgment; Oklahoma Supreme Court reviewed de novo and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether UUPA creates enforceable trust obligations that bar transfers to General Revenue Fund | Dani: UUPA creates a trust with owners as beneficiaries; statutory transfers breach trust duties | State: Whether a trust exists is irrelevant; statutory terms control and authorize transfers/reserves | Court: Dismissed — even if a trust, UUPA's plain terms permit reserves and transfers; no actionable trust breach |
| Whether UUPA is a "Ponzi scheme" or fraudulent | Dani: Reserve/use of incoming unclaimed property to pay claims is like a Ponzi scheme | State: UUPA is a custodial statutory scheme, not a fraudulent investment; statutory mechanics are public | Court: Dismissed — not a Ponzi scheme; fraud not pleaded with required particularity |
| Whether transfers/obligations create an unconstitutional state debt (Okla. Const. art. X §23) | Dani: Promise to pay claimants creates a debt binding the state | State: Payments are one-way transfers; claimants have no recourse to General Revenue Fund; no pledge of state credit or obligation of future legislatures | Court: Dismissed — no debt created; Legislature did not bind future legislatures or pledge credit |
| Whether UUPA effects an uncompensated taking (U.S. Const. V) | Dani: Transfers and treatment of interest amount to a taking without just compensation | State: UUPA is custodial; owners retain rights and have statutory claim procedures; Supreme Court precedent allows abandonment statutes | Court: Dismissed — Texaco controlling; no taking; statute provides claim procedure and owner got his funds |
| Whether UUPA violates due process / notice requirements | Dani: Transfers without adequate notice deprive owners of property without due process | State: UUPA provides multiple notice mechanisms (holder mailings, publications, online lists) and procedures to claim property | Court: Dismissed — notice and procedures are constitutionally adequate under Mullane/Texaco; plaintiff received and used the claims process |
| Whether UUPA violates equal protection | Dani: Equal protection implicated via alleged deprivation | State: No suspect class or fundamental right implicated; statute furthers legitimate state interest | Court: Dismissed — rational-basis review satisfied; statute rationally furthers legitimate state interest |
Key Cases Cited
- Texaco, Inc. v. Short, 454 U.S. 516 (1982) (holds statute treating abandoned property as lapsed does not effect a taking requiring compensation)
- Standard Oil Co. v. State of N.J., by Parsons, 341 U.S. 428 (1951) (states may legislate disposition of property of unknown owners)
- Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (due process requires notice reasonably calculated to inform interested parties)
- Jones v. Flowers, 547 U.S. 220 (2006) (notice must be reasonably calculated to reach interested parties under the circumstances)
- In re Application of Okla. Dep't of Transp., 82 P.3d 1000 (Okla. 2003) (statutory obligations payable only from dedicated future receipts are not state debt under Okla. Const. art. X §23)
- Fent v. Okla. Capitol Imp. Auth., 984 P.2d 200 (Okla. 1999) (statute authorizing bonds that does not bind future legislatures does not create state debt)
- Crownover v. Keel, 357 P.3d 470 (Okla. 2015) (explains adequacy of notice under due process and application of Jones v. Flowers)