Chris Lusby TAYLOR; Nancy A. Pepple-Gonsalves; Susan Swinton; William J. Palmer, deceased; Don H. Perri; Jennifer Walsh; Mark MacAuley; Mary A. Steele, on behalf of themselves and other persons similarly situated, Plaintiffs-Appellants, v. Betty YEE, individually and in her official capacity as State Controller of the State of California; Richard Chivaro, Defendants-Appellees.
No. 12-17828
United States Court of Appeals, Ninth Circuit
March 11, 2015
780 F.3d 928
HUCK, Senior District Judge
Argued and Submitted Feb. 11, 2015.
I highlight cases involving alcohol and violence like battery or domestic violence to illustrate that the BIA has exercised its discretion to grant voluntary departure in a wide range of cases involving criminal histories that equal or exceed that of Valdez-Novoa. Of course, we cannot know for certain whether the BIA would have done so here, but this is not our charge. The question before us is not whether Valdez-Novoa would probably or inevitably have been granted relief, but only whether, at the time his rights were violated, he had a “plausible” ground for relief. Detailing, as the majority does, cases in which the BIA chose not to exercise its discretion underscores only that the choice to grant or not lies with the BIA. Those cases do not prove, given the ranks of cases similar to Valdez-Novoa‘s in which relief was granted, that relief was not “plausible.” When considered in light of the substantial positive factors, the combination of favorable and unfavorable factors easily satisfies a standard of “plausibility” for relief from deportation. Valdez-Novoa has established prejudice under Ubaldo-Figueroa, 364 F.3d at 1048.
The existence of such a wide range of cases—both granting and denying relief—only highlights that the BIA and IJs have taken a broad view of when to grant voluntary departure. I fear that the panel‘s contrary result in this case turns the plausibility standard into something it was never intended to be: a preponderance or probability standard. The standard is low because the affront inherent in the violation is great. Without a true plausibility standard and the remedy of dismissal of the indictment, there would be no effective deterrent to due process violations in this context. I therefore respectfully dissent.
Chris Lusby TAYLOR; Nancy A. Pepple-Gonsalves; Susan Swinton; William J. Palmer, deceased; Don H. Perri; Jennifer Walsh; Mark MacAuley; Mary A. Steele, on behalf of themselves and other persons similarly situated, Plaintiffs-Appellants, v. Betty YEE,* individually and in her official capacity as State Controller of the State of California; Richard Chivaro, Defendants-Appellees.
Robin B. Johansen and Margaret R. Prinzing, Remcho, Johansen & Purcell, LLP, San Leandro, CA, for Defendants-Appellees.
Before MARY M. SCHROEDER and BARRY G. SILVERMAN, Circuit Judges and PAUL C. HUCK,** Senior District Judge.
OPINION
HUCK, Senior District Judge:
I. INTRODUCTION
This putative class action has a long and tortuous history in this Court. Presumably this opinion will be known as Taylor V.1 Appellants challenge the constitutionality of California‘s Unclaimed Property Law (“UPL“), which provides for the conditional transfer of unclaimed property to the State of California.2 While this Court has previously held the UPL facially constitutional, see Taylor III, 525 F.3d at 1289, the instant suit challenges the California State Controller Betty Yee‘s (“the
Appellants’ first and primary argument is that the pre-escheat notice provided by the Controller is constitutionally inadequate because the Controller does not attempt to locate property owners using the data sources required by
II. BACKGROUND
As explained below in more detail, under the UPL, property that appears to be lost or abandoned by the owner is conditionally transferred to the State if it remains unclaimed after notice is provided to the owner. Examples of such lost or abandoned property are savings accounts at a bank or shares of stock held in a brokerage account. In August of 2007, in response to Taylor II, which found the UPL‘s notice requirements insufficient, the California Legislature amended the UPL to provide additional notice to owners of unclaimed property. In Taylor III, this Court determined that the amended UPL is facially constitutional. Appellants now bring this as-applied challenge to the law.
California‘s Unclaimed Property Law
According to the Controller, the purpose of the UPL is to locate owners of apparently lost or abandoned property and restore their property to them; but if these efforts are unsuccessful, to give the benefit of any unclaimed property to California, rather than to financial institutions or other private entities holding the property (“holders“). As the Controller explains, the UPL thus ensures that unless and until the owner reclaims it, unclaimed property will be used for the public good rather than for the benefit of private banks and financial institutions.
Pursuant to the UPL, holders must transfer property to the State once the property meets the UPL‘s definition of unclaimed property. See
As an initial step, the UPL provides that the holder “shall make reasonable efforts to notify any owner by mail or, if the owner has consented to electronic notice, electronically, that the owner‘s” property will escheat to the State.
If the owner does not respond to the holder‘s notice, the property is deemed unclaimed and the holder must report to the Controller “the name, if known, and last known address, if any, of each person appearing from the records of the holder to be the owner of any property of value of at least fifty dollars ($50) escheated under this chapter.”
After the holder has reported the unclaimed property to the Controller, but before it is transferred, that is, pre-escheat, “the Controller shall mail a notice to each person having an address listed in the report who appears to be entitled to property of the value of fifty dollars ($50) or more escheated under this chapter.”
[a] statement that, if satisfactory proof of claim is not presented by the owner to the holder by the date specified in the notice, the property will be placed in the custody of the Controller and may be sold or destroyed pursuant to this chapter, and all further claims concerning the property or, if sold, the net proceeds of its sale, must be directed to the Controller.
The Controller takes an additional step to determine the current address of the owner. Under the UPL, if the holder‘s report includes the owner‘s Social Security number, “the Controller shall request the Franchise Tax Board to provide a current address for the apparent owner on the basis of that number.”
If the owner fails to timely “establish[] his or her right to receive any property specified in the report to the satisfaction of the holder before that property has been delivered to the Controller” then the property must be transferred (that is, escheated) to the Controller in the time specified by the statute.
Beyond the notice mailed by the Controller, the UPL requires additional forms of notice. The Controller must also provide notice via publication “in a newspaper of general circulation which the Controller determines is most likely to give notice to the apparent owner of the property.”
The newspaper notice also informs potential owners of the Controller‘s website where they may perform a search to determine whether they may be the owner of unclaimed property. If there is property in that person‘s name, the website further describes what the property is, what it is worth, which holder reported it, and the owner‘s name and address as reported by the holder. The website provides instructions for filling out a claim form, which can be done online.
In Taylor III, this Court explained that the UPL, as amended in 2007, passes constitutional muster because the State, in addition to the holder, “is required to provide pre-escheat ‘notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.‘” 525 F.3d at 1289 (quoting Jones v. Flowers, 547 U.S. 220, 226 (2006)). The UPL declares, “[i]t is the intent of the Legislature that property owners be reunited with their property” and that in amending the law, California intended to provide “[n]otification by the state to all owners of unclaimed property prior to escheatment.”
Taylor I, II, and III
In Taylor I, two individuals5 sued after the Controller escheated purportedly unclaimed shares of stock that the individuals owned. Taylor I, 402 F.3d at 926. The issue then was whether the notice provided to plaintiffs was constitutionally adequate. The district court dismissed the complaint under the Eleventh Amendment for lack of jurisdiction. This Court reversed. Id. at 936. We ruled that the suit was not barred by the Eleventh Amendment because plaintiffs’ action was for return of their own properties. See
After remand, plaintiffs, challenging the adequacy of the notice provided prior to escheat of the unclaimed property to the Controller, moved for a preliminary injunction. In response, the Controller argued the UPL provided constitutionally adequate notice by requiring that: 1) the Controller place advertisements in the newspaper explaining that owners could check an unclaimed property website to see if their names or property were listed as escheated to the State; 2) the Controller “mails written notice to some, but not all, individuals whose property has been escheated“;
The district court denied plaintiffs’ request for a preliminary injunction and this Court again reversed, noting that California needed to take action to “remedy the constitutional problem with its escheat statute,” specifically, the lack of adequate notice. Id. at 1202. We explained, “[b]efore the government may disturb a person‘s ownership of his property, ‘due process requires the government to provide notice reasonably calculated, under all the circumstances, to apprise the interested party of the pendency of the action and afford him an opportunity to present his objections.‘” Id. at 1201 (quoting Jones, 547 U.S. at 226).
In reversing the district court‘s denial of the injunction, this Court ruled that the plaintiffs had a strong likelihood of success in proving that the notice provisions of the UPL did not provide due process.
On remand, the district court issued the preliminary injunction. Taylor v. Chiang, No. CIV. S-01-2407 WBS GGH, 2007 WL 1628050 (E.D.Cal. June 1, 2007). The injunction enjoined the Controller from receiving, taking title to, possessing, selling, or destroying any property pursuant to the UPL “until the Controller has first promulgated regulations providing for fair notice to the owner and public, satisfactory to and approved by this court.” Id. at *5.
As a result of Taylor II, in 2007 the California Legislature “eliminated the statutory and administrative procedure that [this Court] had determined to be unconstitutional” and “promulgated an entirely new statutory procedure addressing escheat.” Taylor III, 525 F.3d at 1289. In light of the revised UPL, the district court dissolved the injunction. Taylor v. Chiang, No. Civ. S-01-2407 WBS GGH, 2007 WL 3049645 (E.D.Cal. Oct. 18, 2007). The district court ruled that the notice provision of the amended UPL remedied the constitutional problems identified by Taylor II because it required the Controller to send notice before an individual‘s property is transferred to the State and maintain a searchable unclaimed property website. Id. at *3.
Appellants appealed the dissolution of the injunction, which resulted in Taylor III. There, this Court ruled that “[o]n its face, the new procedure complies with the due process standard established by the Supreme Court in Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306 (1950), and Jones v. Flowers, 547 U.S. 220 (2006).” Taylor III, 525 F.3d at 1289. Appellants could not prevail on a facial challenge because “[u]nder the new law, the Controller is required to provide pre-escheatment notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.”
In Taylor v. Westly (Taylor III), 525 F.3d 1288 (9th Cir.2008) (per curiam), we held that the “entirely new statutory procedure addressing escheat” promulgated by the State following the issuance of the preliminary injunction in Taylor II is facially constitutional, and that, as a result, the district court did not abuse its discretion in dissolving the injunction. Id. at 1289-90.
As a result of Taylor III, Appellants’ ostensibly last hope is to craft an as-applied challenge to the UPL, which they have done in their Second Amended Class Action Complaint.
Appellants’ Second Amended Class Action Complaint
Appellants’ Second Amended Class Action Complaint alleges that the Controller is administering the UPL in a manner that violates Appellants’ due process rights guaranteed by the Fifth and Fourteenth Amendments to the United States Constitution and
Here, the primary issue to be resolved is whether Appellants have sufficiently stated an as-applied claim that the Controller is not providing constitutionally adequate notice because she is not taking additional steps to locate and notify property owners.
III. STANDARD OF REVIEW
We review de novo the district court‘s order granting Appellees’ motion to dismiss under
IV. ANALYSIS
A. Appellants’ Claim of Inadequate Notice
Since Taylor I, Appellants have continuously argued that under the UPL the Controller is not providing notice in compliance with the Due Process Clause.
The Supreme Court announced that where persons may be deprived of their property, the Due Process Clause requires “notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane, 339 U.S. at 314.
A second, more recent, Supreme Court opinion further defined the law regarding adequate notice, explaining that “[b]efore a State may take property and sell it for unpaid taxes, the Due Process Clause of the Fourteenth Amendment requires the government to provide the owner ‘notice and opportunity for hearing appropriate to the nature of the case.‘” Jones, 547 U.S. at 223 (quoting Mullane, 339 U.S. at 313).
Just weeks before the public sale of the property, the Commissioner published a notice of the sale in a local newspaper.
Ultimately, the property was sold and the buyer “had an unlawful detainer notice delivered to the property. The notice was served on [the petitioner‘s] daughter, who contacted [the petitioner] and notified him of the tax sale.”
Jones required the Court to determine “whether due process entails further responsibility when the government becomes aware prior to the taking that its attempt at notice has failed.” Id. at 226. This is because the Court had previously “explained that the ‘notice required will vary with circumstances and conditions.‘” Id. at 227 (quoting Walker v. City of Hutchinson, 352 U.S. 112, 115 (1956)). Stated another way, the issue was whether the government‘s knowledge that the notice had not been received was a “circumstance and condition that varies the notice required.”
The Supreme Court held “that when mailed notice of a tax sale is returned unclaimed, the State must take additional reasonable steps to attempt to provide notice to the property owner before selling his property, if it is practicable to do so.” Id. at 225.
The Court found there were “several reasonable steps the State could have taken,” and that “[w]hat steps are reasonable in response to new information depends upon what the new information reveals.”
Appellants rely on Jones for their proposition that the Controller must also “consult ‘all’ publicly available databases” to locate the owners of unclaimed property. Specifically, Appellants claim that the Controller is violating the Due Process Clause because he is failing to utilize
B. Appellants Incorrectly Interpret Section 1531.5
This Court has already ruled that the UPL passes muster under the Mullane-Jones standard. However, Appellants contend that in ruling the UPL constitutional, this Court relied upon
Contrary to Appellants’ position, it appears this Court did not rely on
Tellingly, when appealing the dissolution of the injunction, Appellants argued that the amended provisions of the UPL did not satisfy the Mullane-Jones standard because the additional information available under
Furthermore,
Therefore, Appellants’ argument that the Controller does not meet the Mullane-Jones standard because she fails to utilize data made available by
Appellants’ suggested requirement that the Controller utilize additional governmental databases may, of course, lead to more claims being filed, but it exceeds the minimum due process requirements. Indeed, as indicated above, the property owner in Jones argued that Arkansas’ Commissioner of State Lands “should have searched for [his] new address in the Little Rock phonebook and other government records such as income tax rolls.” Id. at 235-36. However, the Supreme Court “[did] not believe the government was required to go this far.” Id. at 236. Likewise here, the Controller is not required, either by the Due Process Clause or
C. Appellants’ Additional Arguments
The Court also rejects Appellants’ additional argument related to the Controller‘s use of related companies to administer the UPL. This argument is not supported by law or the alleged facts. The cases cited by Appellants are inapposite because here, the allegedly biased companies are not decision-makers and instead merely perform ministerial duties. Furthermore, Appellants do not sufficiently allege that the companies have failed to carry out the UPL‘s notice procedures.
Appellants’ challenge to the Controller‘s post-escheat procedure is not ripe because the Appellants failed to challenge the Controller‘s action—or inaction—in superior court as required by
For these reasons, this Court AFFIRMS the district court‘s ruling.
Dino Wayne KYZAR, Petitioner-Appellant, v. Charles L. RYAN; State of Arizona Attorney General, Respondents-Appellees.
No. 12-17564.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Nov. 19, 2014.
Filed March 12, 2015.
Notes
Taylor III, 525 F.3d at 1289. This is the only mention ofAfter the plaintiff had won these two victories on appeal, the district court issued a preliminary injunction pursuant to our mandate. The State then eliminated the statutory and administrative procedure that we had determined to be unconstitutional. The State promulgated an entirely new statutory procedure addressing escheat. See
Cal.Civ.Proc. Code § 1501.5(c) (West 2008); see alsoid. at §§ 1531 ,1531.5 ,1532 ,1563 ,1565 . Concluding that the amendments remedied the constitutional defects we identified in Taylor II, the district court granted the Controller‘s motion to dissolve the injunction.
(Sec. Am. Compl. ¶ 70). Yet, when ruling the law constitutional, this Court was obviously aware that in sending pre-escheat notices, the Controller would utilize the last known address provided by the holders or alternative addresses from the FTB database. Moreover, Appellants’ argument undercuts their other argument that the Controller should be utilizing other databases, such as California‘s Department of Motor Vehicles, to locate property owners. Those who simply maintained their assets in California banks and permanently reside out-of-state, such as Plaintiff Chris Lusby Taylor, likely do not have California driver‘s licenses and would therefore likely not appear in a California DMV database.[b]y using only the FTB database to notify owners of unclaimed property before their property is seized, the Controller purposely and by design fails to find current addresses of millions of Californians and other citizens who moved, permanently reside out-of-state, and may never even have set foot in California, but have deposited their earnings in bank accounts, bought securities, opened safety deposit boxes and otherwise invested and safeguarded their properties by depositing said assets with banks, corporations, and financial institutions that [have] offices in California.