Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_03-cv-00156/USCOURTS-cand-5_03-cv-00156-5/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1983 Civil Rights Act

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United States District Court

For the Northern District of California

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 The factual background of this action has been described in prior orders and in a Ninth

Circuit opinion in this case and will not be repeated here.

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*E-FILED 8/27/07*

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

AGNES SUEVER, et al., 

Plaintiffs,

 v.

KATHLEEN CONNELL, et al.,

Defendants. /

NO. C 03-00156 RS

ORDER DENYING

APPLICATION FOR

TEMPORARY RESTRAINING

ORDER

On August 24, 2005, plaintiffs filed an application for a temporary restraining order seeking

to prohibit the State Controller from communicating with any putative class members until and

unless the form and substance of the communication is first reviewed and approved by the Court and

plaintiffs have had the opportunity to state any objections. For the reasons explained below, the

application is DENIED.

A. Recent Developments1

On August 23, 2007, the Controller held a press conference in which he apparently

announced a “plan” that purportedly would address at least some of the concerns raised by plaintiffs

in this action as to how the State of California has implemented and administered its Unclaimed

Case 5:03-cv-00156-RS Document 144 Filed 08/27/07 Page 1 of 6
United States District Court

For the Northern District of California

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Property Law (“UPL”) in recent years. According to plaintiffs, the “plan” comprises sending out

letters to thousands of putative class members and launching a new website. Plaintiffs contend that

both the letters and the website are “replete” with “misinformation and omissions.”

B. Ninth Circuit Rulings

The Ninth Circuit has issued one opinion in this case, see Suever v. Connell, 439 F.3d 1142

(9th Cir. 2006), and two opinions in a similar case brought by the same plaintiffs’ counsel in the

Eastern District of California. See Taylor v. Westley, 402 F.3d 924, 933 (9th Cir. 2005) (Taylor I)

and Taylor v. Westley, 488 F.3d 1197 (9th Cir. 2007) (“Taylor II”). In response to the mandate of

Taylor II, the Eastern District of California has entered a preliminary injunction that effectively

precludes California from taking possession of any property under the purported authority of the

UPL.

The present Controller was elected after the first two of these decisions issued. The new

Controller has now publicly stated his intent to restore the “original intent” of the UPL through

legislative action and policy changes in his office.

Nevertheless, the Court understands and recognizes that in this action, as recently as in the

opposition to plaintiffs’ motion for partial summary judgment now under submission, the Controller

has continued to argue that California’s existing UPL and the practices thereunder (currently

enjoined), suffer from no Constitutional infirmities. Plaintiffs’ obvious frustration with the apparent

inability of the Controller to “get it” is therefore understandable.

The Controller, however, is technically correct that to date, the Ninth Circuit has never

issued a ruling on the merits. Both Suerver and Taylor I involved motions to dismiss, where

plaintiffs’ allegations were to be presumed true. Taylor II implicated only the likelihood of success

on the merits, based on the then-existing factual record. As a consequence, the Controller had, has,

and will have, every right to argue that the proven facts establish no constitutional violation. Indeed,

plaintiffs rely on the fact that there has been no ruling on the merits to support their pending motion

for partial summary judgment.

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United States District Court

For the Northern District of California

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 Those arguments remain under submission, and will be addressed, if at all, in the Court’s

ruling on the summary judgment motion. The comments in this order provide relevant background

to the present decision, but neither prejudge the issues presented in the summary judgment motion

nor constrain any order thereon. 

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That said, at least some of the arguments presented by the Controller in opposition to the

motion for partial summary judgment appear to challenge whether or not Suever, Taylor I, and

Taylor II were correctly decided.2

 To the extent the Controller is so arguing, he must present his

case to a higher court, not the trial court. The Controller may be correct that if the facts as proven

are materially different from the facts upon which Suerver, Taylor I ,and Taylor II were decided,

then none of those cases would be “controlling.” Plaintiffs may rest assured, though, that to the

extent they prove, as a matter of undisputed fact or at trial, that the facts are not materially different

than those considered by the Ninth Circuit, the Court will endeavor faithfully to apply the holdings

of the Ninth Circuit in Suerver, Taylor I, and Taylor II.

C. The Communications

Plaintiffs’ application for a temporary restraining order rests largely on their contention that

certain statements in the notices the controller now intends to send out, or on the new website, still

do not conform to what plaintiffs contend the Constitution, and the Ninth Circuit decisions in 

Suerver, Taylor I, and Taylor II, require. It appears that at least some of the assertions made in the

challenged communications may not be consistent with either the current state of affairs or what the

Ninth Circuit has suggested the Controller likely will be required to do in the event plaintiffs prove

their case. For example, the communications apparently state that materials taken from safe deposit

boxes will be destroyed within 90 days, without mentioning either the existing injunction or the

Controller’s pledge predating that injunction that he would hold any property seized for at least 180

days. Similarly, the communications purportedly assert that claimants to property that has been sold

will be entitled to nothing more than the sales proceeds, which directly implicates an issue still in

controversy in this litigation.

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United States District Court

For the Northern District of California

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D. Basis for a Restraining Order

The temporary restraining order plaintiffs seek is unlike the prototypical TRO that provides

preliminary relief on the same issues raised in a plaintiff’s complaint. Thus, the ordinary calculus of

“likelihood of success on the merits” does not apply in the usual way. At the same time, a Court

maintains inherent power to enjoin conduct that would interfere with its proceedings. Nevertheless,

plaintiffs have not shown that a TRO is warranted here. Even assuming it might be appropriate to

constrain a defendant’s communications with prospective class members prior to class certification

under some circumstances, the only basis for doing so would be the potential that, as plaintiffs put it,

the communications might “improperly interfere with the orderly completion of this litigation.” See

also Tedesco v. Mishkin, 629 F. Supp. 1474 (S.D.N.Y. 1986) (injunction entered against perjurious

communications by attorney to class members aimed at discouraging class members from

participating or encouraging them to “opt out”); Haffer v. Temple Univ., 115 F.R.D. 506 (E.D. Pa.

1987) (defendant and its counsel enjoined from actively discouraging class members from

cooperating with plaintiffs’ counsel).

Given plaintiffs’ view that the Controller has not taken seriously the admonishments of the

Ninth Circuit, it is understandable that they take issue with some of the statements in, or omissions

from, the communications in issue. There is nothing here, however, that even remotely approaches

the kind of conduct enjoined in Tedesco or Haffer, and plaintiffs have made no showing that the

communications will significantly impair their ability to proceed in this action. As an initial matter,

whether or not the Controller accurately describes how the UPL operates or may someday operate, is

of little moment given that he is enjoined from taking any property until he has satisfied at least the

Eastern District of California that the law and procedures pass constitutional muster. In other words,

the Controller may say whatever he wants as to what the law requires or does not require without

affecting plaintiffs’ rights, whatever they may be. Plaintiffs have invoked the jurisdiction of the

federal courts, and it is those courts, not the Controller, who will ultimately decide what is

constitutionally required.

Even as to matters implicated in this action that are outside the scope of the Eastern District’s

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United States District Court

For the Northern District of California

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ORDER DENYING TRO 

C 03-00156 RS 

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injunction, such as how existing claims are processed and paid and whether interest should be

included, plaintiffs have failed to show how the Controller’s communications will interfere with

their prosecution of this action. Again, it will be the Courts, not the Controller, that ultimately

decide what is required, and nothing the Controller may say or fail to say in these communications

will change that. 

Finally, Plaintiffs suggest that the Controller may be seeking releases from potential class

members in exchange for paying claims. Even if that is so, it seems unlikely that any such purported

releases would be sufficient to bar such persons from pursuing relief on constitutional grounds such

as are alleged in this action. Accordingly, plaintiffs have not established a basis for entering a

temporary restraining order at this juncture.

IT IS SO ORDERED.

Dated: August 27, 2007 

RICHARD SEEBORG

United States Magistrate Judge

Case 5:03-cv-00156-RS Document 144 Filed 08/27/07 Page 5 of 6
United States District Court

For the Northern District of California

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ORDER DENYING TRO 

C 03-00156 RS 

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THIS IS TO CERTIFY THAT NOTICE OF THIS ORDER HAS BEEN GIVEN TO:

James C. Harrison jharrison@rjp.com, kkrogseng@rjp.com

Robin Bradle Johansen rjohansen@rjp.com, kkrogseng@rjp.com

William Wayne Palmer wmwpalmer@aol.com, dculhane@dim.com

Margaret R. Prinzing mprinzing@rjp.com, lfien@rjp.com

Thomas Andrew Willis twillis@rjp.com, kkrogseng@rjp.com

Counsel are responsible for distributing copies of this document to co-counsel who have not

registered for e-filing under the Court's CM/ECF program. 

Dated: 8/27/07 Chamber of Judge Richard Seeborg

By: /s/ BAK 

Case 5:03-cv-00156-RS Document 144 Filed 08/27/07 Page 6 of 6