1:21-cv-12837
E.D. Mich.Sep 3, 2025Background
- Plaintiff Dennis O’Connor discovered two small sums ($54.50 reported 2003; $120 reported 2018) had been turned over to Michigan’s Unclaimed Property Program (UPP); he filed claims and received only the principal amounts.
- O’Connor sued the State, UPP Administrator Rachael Eubanks, and UPP manager Terry Stanton alleging unconstitutional takings (principal and interest) and due process violations.
- District court dismissed earlier claims; the Sixth Circuit affirmed in part, vacated in part, and held O’Connor has a property right in principal and interest earned while the government holds private property.
- The Michigan Court of Appeals (Kemerer) later held the Uniform Unclaimed Property Act (UUPA) abrogates the common-law rule that interest follows principal and that the State becomes owner/titleholder of property in the UPP.
- Defendants moved for summary judgment or dismissal relying on Kemerer and law-of-the-case arguments; Plaintiff opposed, arguing statutory notice and UUPA procedures were inadequate.
- The district court applied Kemerer on Michigan law, dismissed claims regarding interest with prejudice, dismissed takings claims against the State without prejudice, and allowed due process claims as to principal against Eubanks and Stanton to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Property right in interest earned while property was in UPP | O’Connor: has property right in interest earned on principal | Defendants: under Michigan law (UUPA/Kemerer) interest does not follow principal; State becomes owner | Court: Kemerer controls; no property right in interest under Michigan law — interest claims dismissed with prejudice |
| 2) Pre-deprivation notice adequacy when holders transferred property to UPP | O’Connor: did not receive required notice from holders; statutory publication insufficient | Defendants: holders and State complied with UUPA notice (publication, website); statutory notice satisfies due process | Court: genuine dispute exists about actual notice; defendants failed to show statutory notice satisfied due process on summary judgment — claim survives |
| 3) Post-deprivation process (right to reclaim under UUPA) sufficiency | O’Connor: reclaim procedure does not cure deprivation of enjoyment/ownership while State holds property | Defendants: claimant can reestablish ownership by filing claims; no compensable deprivation | Court: taking of enjoyment/ownership while State holds principal is a deprivation; adequacy of process not resolved on summary judgment — due process claims against officials survive |
| 4) Application of prior rulings, sovereign/qualified immunity, and law of the case | O’Connor: seeks damages for takings and due process; reasserts previously dismissed counts | Defendants: law-of-the-case and immunity preclude relitigation; sovereign immunity bars State damages; officials entitled to qualified immunity | Court: counts I-II (takings vs State) dismissed without prejudice; counts III-IV (takings vs officials) dismissed with prejudice; qualified immunity denial for due-process claims against officials previously affirmed remains — defendants’ dismissal on that ground denied |
Key Cases Cited
- O’Connor v. Eubanks, 83 F.4th 1018 (6th Cir. 2023) (appellate ruling that plaintiff had property rights in principal and interest and vacating qualified-immunity dismissal for due-process claims)
- Kemerer v. State, 21 N.W.3d 201 (Mich. 2025) (Michigan appellate holding that UUPA displaced common-law interest-follows-principal rule and that State becomes owner of UPP property)
- Anderson Nat’l Bank v. Luckett, 321 U.S. 233 (1944) (upholding state unclaimed-property scheme and publication notice in that context)
- Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985) (federal due-process procedural-importance principle; cannot define property right by procedures for deprivation)
- Bd. of Regents v. Roth, 408 U.S. 564 (1972) (property interests are defined by independent sources such as state law)
- Mitchell v. Fankhauser, 375 F.3d 477 (6th Cir. 2004) (two-step due-process analysis: existence of property interest, then what process is due)
- Hall v. State, 908 N.W.2d 345 (Minn. 2018) (upholding Minnesota unclaimed-property procedures as satisfying due process; distinguished by court here)