DENNIS O‘CONNOR, and all those similarly situated, v. RACHAEL EUBANKS, TERRY STANTON, and the STATE OF MICHIGAN
Case No: 21-12837
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION
September 3, 2025
Honorable Nancy G. Edmunds; Magistrate Judge Patricia T. Morris
ECF No. 52, PageID.859 Filed 09/03/25
This putative class action concerns Michigan‘s Uniform Unclaimed Property Act (“UUPA”),
This case‘s procedural history bears mentioning. Defendants moved to dismiss Plaintiff‘s first amended complaint. (ECF No. 9.) That motion was referred to Magistrate Judge Patricia T. Morris. (ECF No. 15.) This Court accepted and adopted the Magistrate Judge‘s report and recommendation and granted Defendants’ motion to dismiss Plaintiff‘s complaint. (ECF No. 28.) In that complaint, Plaintiff raised Fifth Amendment takings claims on the interest and principal against each defendant and Fourteenth Amendment due process claims against Defendants Eubanks and Stanton. Id. The Court dismissed with prejudice Plaintiff‘s claims against the State on sovereign immunity grounds and dismissed with prejudice his claims against Defendants Eubanks and Stanton on qualified immunity grounds. Id. Plaintiff appealed. (ECF No. 30.) The Sixth Circuit affirmed in part,
Less than a month later, the Michigan Court of Appeals (“Appeals Court“) issued an opinion2 relevant to this case. See Kemerer, 2024 WL 4609911. The Appeals Court held the UUPA abrogated the common law doctrine that interest follows principal, and, accordingly, the UUPA‘s provisions governing original owners’ entitlement to any interest control. Id. at *8. The Appeals Court also held that property held in the UPP is deemed abandoned and the State becomes owner and titleholder of property held in the UPP.3 Id. at *9. As a result, under the UUPA, individuals whose property was not interest-bearing at the time the State took custody do not have a property right under Michigan law in interest
Relying on the Appeals Court‘s decision, Defendants argue they are entitled to summary judgment or dismissal of Plaintiff‘s claims regarding any interest earned on his property while it was abandoned because, under Michigan law, he does not have a right to that interest and the State becomes owner while the property is in the UPP. (ECF Nos. 47, PageID.595-98, 603-04; 51, PageID.840-42.) Defendants assert the law of the case doctrine should result in dismissal of Plaintiff‘s re-alleged takings claims against the State and Defendants Eubanks and Stanton. (ECF No. 47, PageID.589-92.) Defendants further argue there was no due process violation because Plaintiff was not deprived of a property interest where he could always reestablish ownership of the principal, and, if there was a deprivation, Plaintiff received sufficient notice and process by the UUPA‘s statutory publication and the UPP‘s website where individuals can search for abandoned property. Id. at 603-08.
Plaintiff argues statutory notice is insufficient and he did not receive the notice required under the UUPA or adequate process in general. (ECF No. 49, PageID.643-47.) Plaintiff maintains he has a protected property interest in both the principal and any interest, and that Defendants deprived him of those interests when taking custody of his property through the UPP. Id. at 652-60. Plaintiff also argues Kemerer was wrongly decided, and he does have a property right in interest earned on his principal property. Id. at 657-60.
I. Background
II. Dismissal Standard of Review and Effect of Other Decisions
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a case where the complaint fails to state a claim upon which relief can be granted. When reviewing a motion to dismiss under
As mentioned above, the Appeals Court has weighed in on issues relevant to this case. Although Plaintiff raises claims of constitutional violations related to his property, property interests “are not created by the Constitution,” but “they are created and their dimensions are defined by . . . an independent source such as state law . . . .” Bd. of Regents v. Roth, 408 U.S. 564, 577 (1972). Accordingly, Michigan state-law controls the existence and dimensions of property rights. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938) (“[e]xcept in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state“).
Regarding counts I-IV of Plaintiff‘s second amended complaint, whose dismissals were already affirmed by the Sixth Circuit, “[t]he law of the case doctrine ‘posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.” Scott v. Churchill, 377 F.3d 565, 569 (6th Cir. 2004) (quoting Arizona v. California, 460 U.S. 605, 618 (1983)).
Although the Sixth Circuit held Plaintiff has a right to any interest, “this court is bound by decisions of the state‘s intermediate appellate courts unless convinced that
The Court will apply the law of the case doctrine to Plaintiff‘s second amended complaint with the aspects of the Sixth Circuit‘s opinion not affected by the Appeals Court‘s decision. As a result, counts I-II of Plaintiff‘s second amended complaint for unconstitutional takings of interest and the principal against Defendant State of Michigan are DISMISSED WITHOUT PREJUDICE. Plaintiff‘s counts III-IV for unconstitutional takings of interest and the principal against Defendants Eubanks and Stanton are DISMISSED WITH PREJUDICE. Because the Sixth Circuit held Defendants Eubanks and Stanton are not entitled to qualified immunity on Plaintiff‘s due process claims, O‘Connor, 83 f.4th at 1024, their motion for dismissal on this basis is DENIED.
III. Summary Judgment Standard of Review
Federal Rule of Civil Procedure 56(a) provides, “[t]he court shall grant summary judgment if the movant shows there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” There is a genuine dispute of material
IV. Legal Standard
Courts in this Circuit undertake a “two-step analysis when considering claims for the violation of due process rights. The first step determines whether the plaintiff has a property interest entitled to due process protection. Second, if the plaintiff has such a protected property interest, ‘this court must then determine what process is due.” Mitchell v. Fankhauser, 375 F.3d 477, 480 (6th Cir. 2004) (citations omitted) (quoting Leary v. Daeschner, 228 F.3d 729, 741-42 (6th Cir. 2000), abrogated on other grounds by EOG Res., Inc. v. Lucky Land Management, LLC, 134 F.4th 868, 883 (6th Cir. 2025)). Further, “[t]he predeprivation process need not always be elaborate, however; the amount of
V. Analysis
A. Whether Plaintiff has a Protected Property Interest
The Sixth Circuit found Plaintiff has a property right in the principal, and Defendants have not offered any state-law basis to revisit this holding. See O‘Connor, 83 F.4th at 1022-23. The Court finds Plaintiff has a protected property interest in the principal and will turn to Defendants’ claims that he was not deprived of that property interest and was afforded all process due regardless.
B. What Process is Due
As far as his remaining claims, Plaintiff alleges his right to due process was violated first when his property was transferred by FMC and MMI to the UPP, and second when the principal was seized and used by the State. (ECF No. 40, PageID.460-63.) The first instance appears to allege the pre-deprivation process was inadequate, and the second alleges the post-deprivation process was too.
For the pre-deprivation claim, Defendants argue there was no due process violation and cite to Anderson National Bank v. Luckett, 321 U.S. 233 (1944), for support. (ECF No. 47, PageID.600-01.) There, the Court considered a Kentucky statute which required banks to turn where deposits became presumed abandoned after ten years of inactivity. Anderson Nat. Bank, 321 U.S. at 236-42. The statute also required banks to turn over to the state deposits that were presumed abandoned, provided administrative and judicial processes to have depositors’ property claims determined, and allowed depositors to make demands for repayment or return from the state. Id. The statute
Anderson National Bank is distinguishable for several reasons. First, there, the depositors took affirmative action to deposit money from their custody into a bank account. Whereas here, Plaintiff appears to have been unaware in each instance that he had property held by another that would eventually be transferred to the State. The aggrieved in Anderson National Bank chose to have their property held by another. Not so here, and that makes a difference in deciding the due process implications of
Defendants have not shown that the transfer of Plaintiff‘s property to the UPP was not a deprivation of his protected right nor that statutory notice was sufficient as due process for that event.
For Plaintiff‘s post-transfer claim, Defendants argue there was no deprivation of a property interest because he could always re-establish ownership and receive the same value the State did when it took custody by filing a successful claim under the UUPA. (ECF No. 47, PageID.603-04.) Defendants miss the point. Plaintiff has a protected property interest in his principal, and he is deprived of the enjoyment of that interest while the State holds it. The fact the State provides an avenue for the deprivation to be temporary lessens the severity, but that does not eliminate the deprivation. Further, the UUPA does not just deprive Plaintiff of his right to custody over his property, it deprives
Defendants argue the notice was adequate for several reasons, including that Plaintiff received the forms of notice required by the UUPA. (ECF No. 47, PageID.607-08.) As for what notice he received, Plaintiff points to his declaration statement that he never received notice from either FMC or MMI or any State official that his property would be presumed abandoned and transferred to the State. (ECF Nos. 49, PageID.643; 49-20.) Defendants point to Defendant Stanton‘s affidavit statement that both holders “indicated” they had complied with the UUPA‘s notice requirements in reporting the property to the State, and that the State has complied with its obligations to issue notice every six months in a newspaper circulated statewide and maintain the website discussed above. (ECF Nos. 47, PageID.607; 47-1.) Thus, there is a genuine dispute as to what notice Plaintiff received.
Plaintiff received actual notice in some way as evidenced by him discovering his property was in the UPP. Defendants argue this shows the notice designed by the UUPA is sufficient. (ECF No. 47, PageID.608.) Similarly, Defendants argue Plaintiff received statutory notice of the UUPA‘s operation by its publication, and this satisfies due process. Id. at 607. However, where it took almost twenty years for Plaintiff to find out he had
Additionally, Defendants argue Plaintiff received due process because the UUPA granting a right and process for original owners to reclaim their property also suffices as the process due to original owners. (ECF No. 47, PageID.606.) As Defendants put it, “Michigan‘s UUPA provides all the process that is due.” Id. As an initial matter, the Court has warned against “defin[ing] [the property right] by the procedures provided for its deprivation.” Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 541 (1985) (explaining “minimum [procedural requirements [are] a matter of federal law, they are not diminished by the fact that the State may have specified its own procedures that it may deem adequate for determining the preconditions to adverse official action”) (quotation marks omitted) (quoting Vitek v. Jones, 445 U.S. 480, 491 (1980))). For support, Defendants cite to Hall v. State, 908 N.W.2d 345 (Minn. 2018). (ECF No. 47, PagelD.606.) There, the Minnesota Supreme Court considered a challenge to that state‘s unclaimed property law. Hall, 908 N.W.2d 345. The statute and challenges in Hall are similar to those here. See id. at 351-56. Thus, where that court held the statute‘s procedures for notice and recovery of unclaimed property satisfied due process requirements, so too Defendants urge should the UUPA‘s. See id. at 358-60. However, there are important differences between Minnesota‘s law and the UUPA. The Hall court noted Minnesota‘s unclaimed property act and program is not an escheatment scheme where the state acquires ownership of unclaimed property. Id. at 356 (stating “[t]he Act is similar to the Indiana statute in that the
VI. Conclusion
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART Defendants’ motion for summary judgment or alternatively dismissal. (ECF No. 47.) Plaintiff‘s claims for unconstitutional takings against Defendant State of Michigan (counts I-II) are DISMISSED WITHOUT PREJUDICE. Plaintiff‘s claims for unconstitutional takings of interest and the principal against Defendants Eubanks and Stanton (counts III-IV) are DISMISSED WITH PREJUDICE. Plaintiff‘s claim for not receiving due process before being deprived of interest earned on his principal (count V) is DISMISSED WITH PREJUDICE. Counts VI and VII, only as they relate to principal property, remain.
SO ORDERED.
s/ Nancy G. Edmunds
Nancy G. Edmunds
United States District Judge
I hereby certify that a copy of the foregoing document was served upon counsel of record on September 3, 2025, by electronic and/or ordinary mail.
s/ Marlena Williams
Case Manager