Hall v. State
908 N.W.2d 345
Minn.2018Background
- Minnesota Unclaimed Property Act presumes various dormant property abandoned and requires holders to deliver such property (and interest due on Nov. 1) to the Commissioner, who deposits proceeds in the general fund and holds property in custody for owners.
- Holders must mail written notice to owners before transfer when they have an address and the property is $100 or more; the Commissioner must publish public notice (e.g., MissingMoney.com) and maintain records; owners can claim property at any time.
- Appellants (Hall, Undlin, Herron, Wingfield) alleged inadequate notice and that the State’s refusal to pay interest after custody effected an unconstitutional taking; Wingfield’s account was interest-bearing and large, others’ were not interest-bearing.
- District court denied dismissal of due process and takings claims; questions were certified to the court of appeals, which rejected the constitutional challenges; the Minnesota Supreme Court granted review.
- Court framed takings test (protected property interest, government taking, public use, lack of just compensation) and analyzed whether owners have a constitutionally protected interest in interest accrued (or forfeited) while the State held the property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Act effects a taking by withholding interest/earnings while holding unclaimed property | State’s custody deprived owners of interest/constructive interest; withholding interest is a taking requiring just compensation | Transfer results from owners’ inaction; statute is custodial/presumptive not escheat, so no compensable taking | Mixed: no taking for non-interest-bearing items (Hall, Undlin, Herron); taking plausible for interest-bearing account (Wingfield) |
| Whether owners are entitled to constructive interest for loss of use while State held funds | Owners seek compensation for lost use (constructive interest) | Cases about forfeiture/seizure are inapposite; no wrongful seizure claim here | Rejected for non-interest-bearing property; accepted as viable for interest-bearing account where accrual was cut off |
| Whether notice under the Act satisfies procedural due process | Statutory notice and MissingMoney.com are insufficient; Mullane requires more than publication | Statute, publication, holder notice (when available), Commissioner’s outreach and records provide adequate, flexible notice | For non-interest-bearing claimants, no deprivation so no process due; for interest-bearing claimant, notice provided (including statute, holder notice, Commissioner methods) satisfied due process |
| Whether general publication (MissingMoney.com) plus statutory scheme meets Mullane/Mathews standards | Publication-based notice (and online database) is inadequate to apprise affected owners | Enactment/publication of law, holder mailed notice (when address exists), Commissioner’s outreach and searchable records together are reasonably calculated to provide notice | Held sufficient: Mullane’s stricter rule for final adjudications is distinguishable; statutory notice scheme satisfies due process for interest-bearing owner |
Key Cases Cited
- Texaco, Inc. v. Short, [citation="454 U.S. 516"] (Supreme Court) (state abandonment statute did not effect compensable taking where loss resulted from owner neglect)
- Phillips v. Washington Legal Foundation, [citation="524 U.S. 156"] (Supreme Court) (interest earned on client trust accounts recognized as clients’ property)
- Brown v. Legal Foundation of Washington, [citation="538 U.S. 216"] (Supreme Court) (just compensation principles and limits on recovery for takings)
- Mullane v. Central Hanover Bank & Trust Co., [citation="339 U.S. 306"] (Supreme Court) (publication notice insufficient for adjudications; notice must be reasonably calculated)
- Anderson Nat'l Bank v. Luckett, [citation="321 U.S. 233"] (Supreme Court) (placing inactive deposits in state custody did not violate procedural due process)
- Mathews v. Eldridge, [citation="424 U.S. 319"] (Supreme Court) (balancing test for procedural due process)
- Webb's Fabulous Pharmacies, Inc. v. Beckwith, [citation="449 U.S. 155"] (Supreme Court) (interest on interpleaded funds treated as private property)
- Ruckelshaus v. Monsanto Co., [citation="467 U.S. 986"] (Supreme Court) (takings elements framework)
- Cerajeski v. Zoeller, [citation="735 F.3d 577"] (7th Cir.) (interest-bearing unclaimed bank-account funds treated as owner property; taking where interest confiscated)