Case Information
*1 Before P OSNER E ASTERBROOK S YKES , Circuit Judges . P OSNER Circuit Judge
. plaintiff appeals dis missal her suit challenging constitutionality part Unclaimed Property Act, Ind. Code §§ et seq . (Indiana’s version Act), ground authorizes confiscate private compensation—let alone just compensation—to owner.
2 12 ‐ 3766 states that “property” “presumed abandoned if the owner or apparent owner has communicated writing with the holder concerning the otherwise given indication interest the property” within a specified that varies according to the type § 32 ‐ 34 ‐ 1 ‐ 20(c). When the presumption kicks in, holder (for example a bank, the a account) required to try to notify owner to submit within 60 to 120 days after that a detailed report matter (including owner’s last known address) to attorney general, simultaneously submis sion to transfer to attorney general. §§ 32 ‐ ‐ 26(a), (b), (e); 32 ‐ 34 ‐ 1 ‐ 27. By November 30 follow ing year, assuming owner hasn’t tried reclaim his attorney general must attempt notice publi cation. § ‐ ‐ ‐ 28. Notice posted on official web site, www.indianaunclaimed.gov (visited Oct. owner, filing valid claim his (which he can do on website), reclaim any time up was delivered attorney general. § ‐ ‐ 36. At point still es cheats to—that is, becomes owned by—the state.
But here’s rub given rise lawsuit: who files valid his principal, interest earned it. plain tiff contends retention tak ing violates takings (just compensation) clause Constitution because paid nothing lost interest. plaintiff’s ward small, bearing account
(it either savings money market account) *3 12 ‐ 3766 3 in bank. value of a bank account ‐ erty owned by the depositor; he just a creditor of the bank. But the statute defines “property” very broadly, include the value of a bank account, § ‐ ‐ ‐ 17(b), with respect such the presumption abandon ment kicks three years after the last communication, or indication interest, the owner regarding the account. § ‐ ‐ ‐ 20(c). That happened, Cerajeski’s ac count, 2006; we assume reason his failure indi cate account required three was related whatever disability led appointment guardian affairs, but there nothing record about this. requires individualized notice reporting bank account three ‐ year elapses if value account exceeds $50. §§ 26(a), (e)(3).
Cerajeski’s account smaller, haven’t told whether, before transferring attorney general (re quired regardless account’s size), went through all motions required larger ac counts anyway. guardian didn’t learn about until 2011.
Correctly believing wouldn’t pay if she filed claim, she filed lawsuit instead, seeking dec laration she (on behalf her ward) terest; she obtains declaration, will follow. plaintiff does quarrel aim general structure Act. Unclaimed proper ty, lost, mislaid, forgotten, or abandoned, drag economy. With no (abandoned property), or known (lost mislaid forgotten property), *4 ‐ property is unlikely to put to its most productive use. One way to minimize the resulting loss of value is to vest ownership after some period of years—25 Indiana—in the state; is called bona vacantia (ownerless goods). See, e.g., Texas New Jersey U.S. 675–77 (1965); Standard Oil New Jersey Parsons Another approach, employed Indiana, for state, much shorter which of property unknown, to take custody of try to find owner, shows up to before enough time has elapsed for to to state, return to owner. The goal of both procedures to avoid far possible situa tions which, for want of identified owner, value of being maximized. certainly charge fee ser vices taking custody of trying locate owner. statute, however, authorizes de duct value very limited set of costs, see § 36(g), none which appears rele vant Cerajeski’s bank account. uniform act on which modeled allows reasonable service charges other fees custodianship, Un claimed § 13(b), unexplained reasons has enacted section uniform act. made effort show amount Cerajeski’s bears re lation cost services performed relation account. confiscation principal therefore part (remember *5 that makes a bank account “property” under law). Suppose Cerajeski had lost a bank account but apple orchard. Years later guardian learns about orchard, visits it, and discovers that a neighboring farmer occupied orchard a number years. farmer acknowledges guardian’s right and leaves—thanking her profusely opportunity gather and sell apples that orchard produced all these years, but compensating her having appropri ated them. She would be understandably indignant. He converted hers—the apples. He would enti tled a reasonable fee having harvested sold them rather than letting them rot, keep entire reve nue their sale. If you own apple tree, you own apples; if you own a deposit account pays interest, you own interest, calls See Brown Legal Foundation Washington
Even by some magic cost custodi anship related services equaled confiscated interest, confiscation would taking within meaning takings clause. See Koontz St. Johns River Water Management District S. Ct. (2013), remarking “we have repeatedly found tak ings where government, confiscating financial obliga tions, achieved result could have obtained imposing tax. Most recently, Brown [ Legal Foundation Washington, supra ] were unanimous concluding Supreme Court’s seizure client funds held escrow despite unquestiona ble constitutional propriety tax would have raised exactly same revenue. Our holding Brown followed *6 … two earlier cases which we treated confiscations money as takings despite their functional similarity tax.”
Indiana could, reasonable time and satisfying due process, escheat fruit, interest, without having escheat entire as well. it occurred us af ter oral argument although escheat years, confiscation af ter might partial escheat, though called that. So we asked parties file supplemental briefs address ing two questions: whether state’s unconditional title “presumed abandoned” would constitu tionally valid as escheat, any issue concern ing escheat arisen course suit. state answered without violating takings
clause, can seize unconditional title abandoned compensation, issue concerning escheat arisen litigation because, as explained supplemental brief, Unclaimed Property Act “is not, strictly speaking, statute. does acquire title unclaimed acts custodian, at any time.” In sup port statement cites our decision Com monwealth Edison Vega (7th Cir. 1999), where said acts enacted Illinois other states, including acts based act is, “are statutes. does acquire title It merely custodian. reclaim time.” *7 12 3766 7 answer to our question there is issue is correct, fatal to its case. Begin “abandoned.” “Abandonment” means voluntary relinquishment or renunciation erty right, or ownership vacuum resulting own er’s death without heirs valid will. E.g., Mucha v. King , 792 602, 610 (7th Cir. 1986); Schaffner v. Benson , 166 N.E. 881, (Ind. App. 1929); Haslem v. Lockwood , 37 Conn. 500, 506–07 (1871); Eads v. Brazelton , Ark. 499, (1861); Note, “The Unclaimed Personal Problem: A Legislative Proposal,” Stan. L. Rev. 619, (1967). It means gives up all claims property, thus pitching it back into public domain, where it available reap propriation. Of course take abandoned compensation—there no compensate. That clear example escheat. (If lays no claim abandoned property, first person it becomes owner.) But Mucha King supra , involved painting disappeared years; yet it had aban doned, held owner’s heir was return.
Cerajeski did voluntarily relinquish either princi pal his account. fact he guardian suggests he competent keep track his property, though record contains details regard ing condition. guardian was unaware account until was transferred state. rather than abandoned. like abandoned before someone appropriates it, kind limbo; one way moving economic heaven escheat. See United States Locke U.S. (1985); cf. Texaco, Inc. Short *8 The Supreme Court of Illinois, interpreting its version of the Act, could thought have held, in opinion on which the attorney general of mistakenly relies, that the authorizes the escheat of in terest, though court did not use the word “escheat.” Cwik Giannoulias N.E.2d (Ill. 2010). attorney general misread case. interest question was interest state had earned taking custody of plaintiff’s property; had not earned interest on when was his custody. Id . at 993–94. To give interest when he reclaimed principal would therefore have given him windfall. court dis tinguished earlier decision Canel Topinka N.E.2d (Ill. 2004), which had held unequivocally Illinois’s version uniform act does permit interest if, as case, owner’s earning (or, equivalently, dividends) when state took custody, would have continued earning state taken custody. (“At all times shares stock remained private plaintiff. Under cir cumstances, dividends, as incident ownership, were also private property.” Id . 325.) attorney general’s reliance Cwik doubly odd, because he interprets own version uniform act differently. He assures us “the will take un conditional title, as opposed custody, erty.” See Smyth Carter N.E.2d (Ind. App. 2006). He tells us does permit Cerajeski account—which remember includes well principal—until (the took cus tody That why he rightly acknowl edges there issue litigation, *9 12 3766 9 state merely custodian account. But it is merely custodian, on what basis can it confiscate portion account? Interest bearing unclaimed ‐ erty unclaimed property too, and so property it upon proving title, unless been escheated; assures us it not es ‐ cheated because under which it taken by state—the Act—is not escheat stat ute, more precisely escheat except with re gard 25 years.
There no basis confiscating account. See Sogg v. Zurz , 905 N.E.2d 187, 192 (Ohio There articulated basis fixing year term principal interest—a short serious question consistent requirement Four teenth Amendment taken without due process law, implying adequate notice opportunity contest. “at least confiscatory regulations (as op posed those regulating use property), may sidestep Takings Clause disavowing traditional interests long recognized under law.” Phillips v. Washington Legal Foundation , U.S. 156, (1998); see Webb’s Fabulous Pharmacies, Inc. v. Beckwith , U.S. 155, (1980); Schneider California Department Corrections , 1199–1200 (9th Cir. 1998); cf. Stop Beach Re nourishment, Inc. Florida Department Environmental Protec tion S. Ct. A “trans form private into public compen sation” merely “because held temporarily [state].” Webb’s Fabulous Pharmacies, Inc. Beckwith supra 164. “In Phillips, Supreme Court reaffirmed *10 commitment ‘interest follows principal’ rule a con ‐ stitutionally relevant aspect of Takings Clause jurispru ‐ dence.” Schneider v. California Department of Corrections , supra , at 1199. And a not escheat ‐ out a judicial or administrative determination erty abandoned or is otherwise subject escheat. E.g., Connecticut Mutual Life Ins. v. Moore , U.S. 541, 546–47 (1948); Anderson National Bank Luckett U.S. 233, 241–42, 245–46 (1944); Otis Elevator Co ., A.2d (N.J.
Everything required escheat is missing case. We think know what led into error. It is misunderstanding concept abandonment, mis understanding fostered misleading term “presumed abandoned” Act. Abandonment other than consequence death without valid will heirs means at common law voluntary relin quishment ownership. If there no owner, there no one object state’s compen sation (there one compensate). Now true state’s power escheat limited abandoned proper ty common law sense. “condition permanent retention [a] right perfor mance reasonable conditions indicate inten tion retain interest,” Texaco, Inc. Short supra 526—and fact “abandoned” does mean ”abandoned” common sense, instead means abandoned unclaimed, does necessarily limit power fact does some mere ly abandoned—but *11 its remaining unclaimed. Until then, gives state authority to if before then takes either principal must render just compensation to if as this owner’s identity known. can charge fee for custodian ‐ ship searching owner, but principal bank fee those services. perversity position lies fact unclaimed property acts are primarily designed to enrich directly “return[] unclaimed property stream commerce,” Louisiana Health Service & Indemni ‐ ty Tarver So.2d 1090, (La. 1994), pro ‐ tect property owners against what’s known as “lucrative si lence.” “[A] holding institution [such as bank] intangi ble personal property [such as account] find do ing nothing with its customers’ communi cating little possible customers ‘lucrative silence.’” Summary, Law Commission uniformlaws.org/ActSummary.aspx?title= Unclaimed%20Property%20Act (visited Oct. 29, “The practical reason behind states’ action [in enforcing un claimed laws] prevent unclaimed personal being eventually appropriated hold er,” though realism requires recognition statutes “are means raising [state] reve nue.” Treasurer New Jersey Department Treasury (3d Cir. 2012), quoting John Orth, “Escheat: Is Last Heir?,” Green Bag 2d
A holder someone else’s tempted try reap fruits inatten tive perhaps (as probably true case—why *12 else guardianship?) incapable keeping track it. We’re surprised attorney general wants take those fruits from someone who may be incompetent safeguard judgment reversed remanded fur ther proceedings consistent this opinion. plaintiff just compensation when she files her account, amount just compensation yet be determined. plaintiff al sought injunction—why don’t know; injunc tive relief well unavailable case. “Equitable relief available enjoin alleged private public use.” Ruckelshaus Monsanto availability propriety junctive relief are other issues resolved district judge first instance.
R EVERSED AND R EMANDED .