1

Filed 12/12/22

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

JPMORGAN CHASE BANK, N.A.,

Petitioner,

v.

THE SUPERIOR COURT OF THE

CITY AND COUNTY OF SAN 

FRANCISCO,

Respondent;

STATE OF CALIFORNIA ex rel.

KEN ELDER,

Real Party in Interest.

A164519

(City & County of San Francisco

Super. Ct. No. CGC1957914)

U.S. BANK N.A.,

Petitioner,

v.

THE SUPERIOR COURT OF THE

CITY AND COUNTY OF SAN 

FRANCISCO,

Respondent;

STATE OF CALIFORNIA ex rel.

KEN ELDER,

Real Party in Interest.

A164521

(City & County of San Francisco 

Super. Ct. No. CGC19581373)

ORDER MODIFYING OPINION; 

AND DENYING PETITIONS FOR 

REHEARING; NO CHANGE IN 

JUDGMENT

THE COURT:

It is ordered that the opinion filed on November 18, 2022, be modified as 

follows:
2

1. On page 3, line 1 of the first full paragraph, replace “Section 1511 adds an 

additional requirement to this general rule” with “Section 1511 adds a

separate requirement to this general rule.” 

2. On page 14, line 9, replace the sentence “Unlike the AKS, willfulness is 

not an element of the CFCA provisions the banks are alleged to have 

violated here” with “Unlike the AKS, willfulness is not an element of the 

UPL provisions the banks are alleged to have violated here.”

There is no change in the judgment. 

Petitioners’ petitions for rehearing, filed December 5, 2022, are denied.

December 12, 2022 POLLAK, P.J.
3

Trial court: San Francisco County Superior Court

Trial judge: Honorable Ethan P. Schulman

Counsel for Petitioner JPMorgan 

Chasebank, N.A.:

MORGAN, LEWIS & BOCKIUS LLP

Douglas W. Baruch

Jennifer M. Wollenberg

Neaha P. Raol

Thomas M. Peterson

Joseph E. Floren

Counsel for Petitioner U.S. Bank 

National Association:

BUCKLEY LLP 

James R. McGuire 

Sarah N. Davis

Andrew W. Schilling (Pro Hac Vice)

Jackson Hagen (Pro Hac Vice)

Counsel for Respondent: No appearance

Counsel for Amicus Curiae, Attorney 

General, the State of California

Rob Bonta

Attorney General Of California

Matthew Rodriquez

Chief Assistant Attorney General 

Martin H. Goyette

Senior Assistant Attorney General 

Jacqueline Dale

Supervising Deputy Attorney General

Brendan Ruddy

Deputy Attorney General 

Counsel for Real Party in Interest 

Ken Elder:

SILVER GOLUB & TEITELL LLP

David S. Golub 

DENVER LAW GROUP

Michael P. Denver

GOLENBOCK EISEMAN ASSOR BELL & 

PESKOE LLP 

Michael S. Devorkin 
1

Filed 11/18/22

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

JPMORGAN CHASE BANK, N.A.,

Petitioner,

v.

THE SUPERIOR COURT OF THE

CITY AND COUNTY OF SAN 

FRANCISCO,

Respondent;

STATE OF CALIFORNIA ex rel.

KEN ELDER,

Real Party in Interest.

A164519

(City & County of San Francisco

Super. Ct. No. CGC1957914)

U.S. BANK N.A.,

Petitioner,

v.

THE SUPERIOR COURT OF THE

CITY AND COUNTY OF SAN 

FRANCISCO,

Respondent;

STATE OF CALIFORNIA ex rel.

KEN ELDER,

Real Party in Interest.

A164521

(City & County of San Francisco 

Super. Ct. No. CGC19581373)

A qui tam plaintiff alleges that two banks violated the California False 

Claims Act (CFCA) by failing to report and deliver millions of dollars owing 

on unclaimed cashier’s checks to the State of California as escheated 
2

property. The two banks seek writ relief from the trial court’s order 

overruling their demurrers to the plaintiff’s complaints. We reject the banks’ 

argument that a qui tam plaintiff may not pursue a CFCA action predicated 

on a failure to report and deliver escheated property unless the California 

State Controller (Controller) first provides appropriate notice to the banks

under Code of Civil Procedure section 1576. We also conclude the plaintiff has 

adequately alleged that the banks were obligated to report and deliver to 

California the money owed on unredeemed cashier’s checks, and reject the 

banks’ argument that allowing this action to proceed violates their due 

process rights. We therefore will deny the banks’ writ petitions. 

BACKGROUND

1. California’s Unclaimed Property Law

“Escheat” is the “vesting in the state of title to property the 

whereabouts of whose owner is unknown or whose owner is unknown or 

which a known owner has refused to accept, whether by judicial 

determination or by operation of law, subject to the right of claimants to 

appear and claim the escheated property or any portion thereof.” (Code Civ. 

Proc., § 1300, subd. (c).)1 California’s Unclaimed Property Law (UPL)

regulates the escheatment of abandoned property to the State of California.

(§ 1500 et seq.) The general rule in California, codified in section 1510, is that 

unclaimed intangible property escheats to California when the “last known 

address” of the “apparent owner” is in California. (§ 1510, subds. (a), (b)(1).) 

This rule is a codification of the federal priority rule for escheatment. (See 

§ 1510, Legislative Committee com. (1968) [“Section 1510 describe[s] types of 

1 All undesignated statutory references are to the Code of Civil 

Procedure.
3

abandoned intangible property that this state may claim under the rules 

stated in Texas v. New Jersey [(1965)] 379 U.S. 674.”].)

Section 1511 adds an additional requirement to this general rule, 

stating: “Any sum payable on a money order, travelers check, or other similar 

written instrument (other than a third-party bank check) on which a 

business association is directly liable escheats to this state under this chapter 

if the conditions for escheat stated in Section 1513 exist and if: [¶] (1) The 

books and records of such business association show that such money order, 

travelers check, or similar written instrument was purchased in this state.” 

(§ 1511, subd. (a)(1).) “Section 1511 adopts the rules provided in federal 

legislation which determines which state is entitled to escheat sums payable 

on money orders, travelers checks, and similar written instruments.” (Law 

Revision Com. com. (1975) § 1511.)

The UPL requires “[e]very person holding funds or other property 

escheated to this state” to file an annual report with the Controller with “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 twenty-five dollars ($25)” subject to escheatment in California. (§ 1530, 

subds. (a), (b)(2), & (d).) The law also requires holders of escheated property 

to deliver to the Controller all unclaimed funds listed in the reports, usually 

in June of the following year. (§ 1532, subd. (a).)

The UPL vests the Controller with authority to examine the records of 

a person “if the Controller has reason to believe that the person is a holder 

who has failed to report property that should have been reported.” (§ 1571, 

subd. (a).) The Controller may also bring an action “in a court of appropriate 

jurisdiction” to “enforce the duty of any person under this chapter to permit 

the examination of the records of such person,” to obtain “a judicial 
4

determination that particular property is subject to escheat by this state,” 

and to “enforce the delivery of any property to the State Controller as 

required” under the UPL. (§ 1572, subd. (a).)

The UPL also contains a penalty provision stating that “[a]ny person 

who willfully fails to render any report or perform other duties, including use 

of the report format described in Section 1530, required under this chapter,

shall be punished by a fine of one hundred dollars ($100) for each day such 

report is withheld or such duty is not performed, but not more than ten 

thousand dollars ($10,000).” (§ 1576, subd. (a).) A person must also be fined 

not less than $5,000 nor more than $50,000 for “willfully” refusing to pay or 

deliver escheated property to the Controller. (§ 1576, subd. (b).) Under section 

1576, “[n]o person shall be considered to have willfully failed to report, pay, 

or deliver escheated property, or perform other duties unless he or she has 

failed to respond within a reasonable time after notification by certified mail 

by the Controller’s office of his or her failure to act.” (§ 1576, subd. (c).)

2. Elder’s CFCA action

The qui tam plaintiff in this action, Ken Elder, sued JPMorgan Chase 

Bank, N.A. (JP Morgan) and U.S. Bank, N.A. (U.S. Bank) in two separate 

actions under the CFCA. In both actions, the complaints allege that the

banks failed to deliver to the State of California millions of dollars owing on

unclaimed cashier’s checks that were purchased in California and subject to 

escheatment in California as required by the UPL. The complaints further 

allege that both banks submitted “knowingly false annual abandoned 

property reports to the State of California . . . to conceal and perpetuate its 

violations of the UPL.” The pleadings allege that the banks have, incorrectly,

taken the position that the unclaimed cashier’s checks were escheated by 

Ohio, the banks’ state of domicile, which has escheat provisions that are more 
5

bank-friendly than California.2 The complaints allege against both banks

three violations of the CFCA: (1) wrongful conversion of money used or to be 

used by the State of California (Gov. Code, § 12651, subd. (a)(4)); (2) a 

“reverse” false claim for knowingly concealing and avoiding their obligation to 

deliver the money owed on the cashier’s checks to the State of California 

(Gov. Code, § 12651, subd. (a)(7)); and (3) a second reverse false claim for 

submitting false reports to the State of California relating to their obligation 

to deliver the money owed on the cashier’s checks to California (ibid.).

JP Morgan and U.S. Bank each demurred, raising several (and in some 

cases different) grounds for dismissal. Insofar as possible, we address their

arguments collectively. First, the banks argue that the complaints do not 

allege that the Controller provided them notice under section 1576 advising 

they were in violation of the UPL, which the banks contend is a prerequisite 

for liability under both the UPL and the CFCA. The banks also argue that

the complaints do not allege they were obligated to report and deliver the 

money owed on the cashier’s checks to California, so that there is no basis for 

liability under the CFCA. Finally, the banks argue that enforcing California’s 

UPL with regard to property that has been delivered to another state (Ohio)

as escheated property would deprive them of due process of law.

The trial court initially issued tentative rulings sustaining the banks’ 

demurrers. Citing State of California ex rel. Bowen v. Bank of America Corp.

(2005) 126 Cal.App.4th 225 (Bowen), the court explained that the complaints 

2 According to Elder, Ohio does not require holders of unclaimed 

property to deliver the full amounts owing on unclaimed property, but allows 

the holders to pay 10 percent of the aggregate value of the unclaimed funds 

they report owing. Ohio also exempts business-to-business transactions from 

escheatment. And, with respect to cashier’s checks, Ohio has a five-year 

waiting period before an uncashed cashier’s check is deemed abandoned, two 

years longer than California’s waiting period.
6

fail because they do not allege the Controller provided notice of a potential 

UPL violation, as required by section 1576, subdivision (c).

After the court issued its tentative ruling, the California Attorney 

General requested the opportunity to appear at the demurrer hearing to 

contest the ruling. At the hearing, the Attorney General argued that the 

court’s ruling would have a “negative impact on cases beyond this.” The court 

allowed the Attorney General to file a supplemental brief, and allowed the 

banks to file responses.

After receiving the briefing, the trial court issued an order overruling 

the banks’ demurrers. The court explained that Bowen’s reference to section 

1576, subdivision (c), in a decision addressing the obligation to report 

“reconveyance” fees as escheated property, was “nonbinding dictum” and 

could be disregarded, as could the references made to Bowen in subsequent 

appellate court cases. After analyzing the statutory schemes of the UPL and 

CFCA, the court concluded that notice from the Controller is not a 

prerequisite to the prosecution of an action under the CFCA. The court also 

rejected the banks’ remaining arguments and overruled the demurrers in 

their entirety.

JP Morgan and U.S. Bank each filed a petition for writ of mandate in 

this court challenging the trial court’s order. We consolidated the two 

petitions for briefing and oral argument and issued an order to show cause. 

Elder filed a formal return, to which the banks each filed a reply. We also 

requested and received an amicus curiae brief from the Attorney General, 

and both banks filed a response to the amicus brief. We have also received an 

amicus brief submitted jointly by the Chamber of Commerce of the United 

States of America, the California Chamber of Commerce, and the California 

Bankers Association.
7

DISCUSSION

3. Standard of Review and CFCA Actions

Appellate courts have “extreme reluctance” to review demurrer rulings 

in writ proceedings (Babb v. Superior Court (1971) 3 Cal.3d 841, 851).

Nonetheless we do so in this matter because the petitions present 

unaddressed issues of “significant legal impact” involving the interplay 

between the CFCA and UPL. (Ibid.) In a writ proceeding, “ ‘ “the ordinary 

standards of demurrer review still apply,” ’ under which we review de novo 

an order overruling a demurrer.” (Sirott v. Superior Court (2022) 

78 Cal.App.5th 371, 380.) We “accept[] as true all facts properly pleaded in 

the complaint in order to determine whether the demurrer should be 

overruled.” (Guardian North Bay, Inc. v. Superior Court (2001) 

94 Cal.App.4th 963, 971.)

The CFCA is intended “to supplement governmental efforts to identify 

and prosecute fraudulent claims made against state and local governmental 

entities.” (Rothschild v. Tyco Internat. (US), Inc. (2000) 83 Cal.App.4th 488, 

494.) The CFCA “permits the recovery of civil penalties and treble damages 

from any person who ‘[k]nowingly presents or causes to be presented [to the 

state or any political subdivision] . . . a false claim for payment or approval.’” 

(Ibid., quoting Gov. Code, § 12651, subd. (a)(1).) False claims include 

“possession, custody, or control of public property or money used or to be used 

by the state or by any political subdivision and knowingly deliver[ing] or 

caus[ing] to be delivered less than all of that property” (Gov. Code, § 12651, 

subd. (a)(4)) and “knowingly and improperly avoid[ing], or decreas[ing] an 

obligation to pay or transmit money or property to the state or to any political 

subdivision.” (Gov. Code, § 12651, subd. (a)(7).) The CFCA also contains qui 

tam provisions authorizing private relators to bring actions on behalf of the 
8

State of California to seek redress for a CFCA violation. (Gov. Code, § 12652.) 

“ ‘The driving force behind the false claims concept is the providing of 

incentives for individual citizens to come forward with information uniquely 

in their possession and to thus aid the Government in [ferreting] out fraud.’ ” 

(State ex rel. Harris v. PricewaterhouseCoopers, LLP (2006) 39 Cal.4th 1220, 

1231.) The CFCA “ ‘should be given the broadest possible construction’ ” 

consistent with its purpose. (City of Pomona v. Superior Court (2001) 

89 Cal.App.4th 793, 801.)

4. Controller Notice

The banks contend that their demurrers must be sustained because the

complaints do not allege that the Controller provided them with prior notice 

that they were holding funds subject to escheat. They assert there can be no 

liability under the CFCA for a failure to report or deliver escheated property

under the UPL unless the failure is punishable under section 1576 of the 

UPL. As noted above, section 1576 imposes a penalty for “willfully” failing to 

deliver or report escheated property to California, and a person acts 

“willfully” only if “he or she has failed to respond within a reasonable time 

after notification by certified mail by the Controller’s office of his or her 

failure to act.” (§ 1576, subd. (c).)

The banks argue that the court in Bowen held that a plaintiff may not 

allege a CFCA violation predicated on the failure to report or deliver 

escheated property absent notice from the Controller under section 1576.

Alternatively, they contend that even if Bowen did not hold that Controller 

notice is a prerequisite to a CFCA action, the same conclusion should be 

reached independently. We disagree with both contentions.

In Bowen a qui tam plaintiff sued a group of banks under the CFCA 

alleging that the banks failed to report as escheated property unearned and 
9

unreturned reconveyance fees they were holding. The court there held only 

that the reconveyance fees in question “were not subject to escheat” because,

during the time period in question, there was no “certain and liquidated”

obligation to report those fees as escheated property. (Bowen, supra, 126 

Cal.App.4th at pp. 230, 239, 240–242.) The statutory provision requiring the 

refund of unwarranted reconveyance fees (Civ. Code, § 2941, subd. (j)) had 

not yet been enacted at the time the banks allegedly failed to report (Bowen, 

supra, at p. 241), and the plaintiff did not allege “that any of the contracts 

provided for the specific remedy of disgorgement of the reconveyance fees, or 

that any judgment was entered to that effect.” (Id. at p. 230.) 

The court in Bowen referenced the Controller notice requirement of 

section 1576 at two points in its opinion. In the background section of the 

opinion laying out the overall structure and mechanics of the statutory 

scheme, the court quoted section 1576 when describing penalties for willful 

failure to report under the UPL. (Bowen, supra, 126 Cal.App.4th at p. 235.) 

The court also referred to section 1576 in the conclusion section of the opinion 

when it observed: “In this case, plaintiff not only lacked standing to pursue a 

breach of contract claim or a class action to recover the disputed 

reconveyance fees, he sought to use the UPL as the hook for imposing reverse 

false claims liability for violations that are not even punishable under the 

UPL unless the violator is given notice and an opportunity to correct the 

alleged violations. Despite the lack of any allegation that defendants received 

such notice from the Controller, plaintiff contends defendants’ obligation to 

refund the reconveyance fees was both liquidated and certain because 

plaintiff is seeking only the disgorgement of the reconveyance fees. Plaintiff’s 

waiver of other damages, however, fails to establish that an enforceable 
10

obligation to refund the fees existed when the allegedly false reports were 

filed.” (Id. at pp. 245–246, italics added.) 

Focusing on the italicized language, the banks contend that Bowen

established that Controller notice is a prerequisite for alleging a CFCA cause 

of action premised on a UPL violation. We disagree. The court’s reference to 

violations that are “not even punishable under the UPL” absent notice and an 

opportunity to correct was to penalties that are not at issue in this case, those 

mentioned in the background section of the opinion. “An appellate decision is 

not authority for everything said in the court’s opinion but only ‘for the points 

actually involved and actually decided.’ ” (Santisas v. Goodin (1998) 17 

Cal.4th 599, 620.) The court considered and decided only that the plaintiff 

failed to allege an obligation for the banks to report reconveyance fees to the 

Controller. It did not hold that there can be no such obligation without prior 

notice from the Controller.

Bowen was cited in two subsequent appellate court cases, but neither of 

those cases held that notice from the Controller is a prerequisite to a CFCA 

action. In State of California ex rel. Grayson v. Pacific Bell Telephone Co.

(2006) 142 Cal.App.4th 741, the court held that the CFCA’s jurisdictional 

“public disclosure bar” justified dismissal of a complaint alleging 

telecommunication companies failed to deliver to California balances on 

prepaid telephone cards. (Id. at pp. 744–754, 757.) While noting that Bowen

had referenced the Controller-notice provision of section 1576, the court 

explained its decision did not depend on Controller notice: “We need not 

consider the potential implications of a collision between the notice provisions 

of the UPL and a reverse false claim action under the FCA because, in this 

case, the jurisdictional bar contained in the FCA precludes plaintiff’s qui tam 

complaint.” (Id. at p. 746.) In State of California ex rel. McCann v. Bank of 
11

America, N.A. (2011) 191 Cal.App.4th 897, 914, the court affirmed dismissal 

of a CFCA complaint alleging that “unidentified credits” accumulated from a 

bank’s check clearing process were subject to escheat as unclaimed property. 

(Id. at pp. 902–903.) As with Grayson, the court in McCann explicitly stated 

its decision did not turn on section 1576: “The parties have not raised here, 

and did not raise in the trial court, the significance, if any, of the failure of 

the Controller to make any demand upon [Bank of America] under . . . section 

1576, subdivision (c) for either reporting or delivery of the sums Appellants 

contend are subject to escheat.” (Id. at p. 914, fn. 18.) 

Prior notice from the Controller is not a prerequisite of liability under 

the CFCA. Imposition of the penalties imposed by section 1576 for willful

violations do require prior notice, but the present complaints do not seek to 

impose those penalties. The CFCA provisions allegedly violated by the banks 

proscribe certain acts without reference to whether the banks’ conduct was 

willful or punishable under section 1576. The complaints allege violations of 

subdivision (a)(4) of section 12651 of the Government Code, which proscribes 

the possession of property used or to be used by the government and 

knowingly delivering less than all that property to the government. The 

complaints also allege violations of subdivision (a)(7) of section 12651—the 

“reverse false claim” provision—which prohibits false statements, 

concealment, or improper avoidance of obligations to the state. None of these

provisions are dependent on prior notice from the Controller or on the 

proscribed conduct being punishable under another predicate statute, such as

the UPL.

Likewise, the UPL contains no provision stating that the Controller 

must provide notice that a person has failed to report or deliver escheated 

property to the State before liability can be imposed for submitting a false 
12

claim in violation of the CFCA. Contrary to the banks’ argument, notice is not 

an “element” that “must be pled and proven in the CFCA case.” The notice

requirement of section 1576 is a prerequisite only for imposition of the 

penalties provided in that statute for willful violations of the UPL.

The UPL itself contains numerous other remedial provisions

addressing the failure to comply with its reporting and delivery 

requirements, none of which are conditioned on prior notice. The Controller 

may without prior notice institute a civil action for an order to examine a 

person’s records and compel delivery of property to the Controller. (§ 1572, 

subds. (a)(1), (a)(3).) Violators of the reporting or delivery deadlines must pay 

interest on the escheated property at 12 percent per annum, without having 

received prior notice from the Controller of a violation. (§ 1577, subd. (a).)

And any business association that sells travelers checks, money orders, or 

other similar written instruments and willfully fails to maintain a record of 

those purchases is liable for a $500 civil penalty. (§ 1581, subd. (c).) 

Moreover, the Attorney General is authorized to bring an action “for the 

purpose of having it adjudged that title to real or personal property, to which 

the State has become entitled by escheat, is vested in the State.” (Gov. Code, 

§ 12541.) The Controller and Attorney General need not provide any advance 

notice before bringing such actions. (Ibid.)

The Legislature previously made clear that liability under the CFCA 

operates independently of the UPL’s enforcement provisions. In 1999, the 

Legislature enacted a temporary amnesty program for delinquent holders

who did not deliver escheated property to the state by waiving the mandatory

interest owed on undelivered funds. (See § 1577.5, subd. (a).) The amnesty 

statute contained a provision stating that “[n]othing in this section shall 

preclude liability” under the CFCA. (§ 1577.5, subd. (f).) Although the 
13

amnesty program expired in 2002, the provision addressing CFCA liability

indicates that the Legislature believed liability under the CFCA was not tied 

to liability under the UPL, and that CFCA liability could attach when a 

person failed to report or deliver unclaimed funds to the state.

The provisions of the CFCA that the present complaints allege the 

banks violated require the false claims to have been made “knowingly.” (Gov. 

Code, § 12651, subds. (a)(4), (a)(7).) Under the CFCA, “knowingly” means 

that one “[h]as actual knowledge of the information,” “[a]cts in deliberate 

ignorance of the truth or falsity of the information,” or “[a]cts in reckless 

disregard of the truth or falsity of the information.” (Gov. Code, § 12650, 

subd. (b)(3).) “The definition of ‘knowingly’ in the federal FCA is the same as 

the definition in the CFCA, and, in adopting the federal FCA definition, ‘. . . 

Congress attempted “to reach what has become known as the ‘ostrich’ type 

situation where an individual has ‘buried his head in the sand’ and failed to 

make simple inquiries which would alert him that false claims are being 

submitted.” [Citation.] Congress adopted “the concept that individuals and 

contractors receiving public funds have some duty to make a limited inquiry 

so as to be reasonably certain they are entitled to the money they seek.” ’ ” 

(San Francisco Unified School Dist. ex rel. Contreras v. First Student, Inc. 

(2014) 224 Cal.App.4th 627, 646.) Under the more stringent willful standard

applicable to section 1576, which the banks seek to incorporate into the 

CFCA provisions applicable here, a person would be immune from CFCA 

liability even if knowingly misreporting or failing to deliver escheated 

property to the state, so long as the Controller had not notified them of the 

violation. 

The banks seek support for their position in federal False Claims Act 

cases that are predicated on a violation of the Anti-Kickback Statute (AKS).
14

As one district court explained, “To state an FCA claim based on an AKS 

violation, a plaintiff must allege that the defendant acted with the requisite 

scienter under the AKS: a ‘knowing[] and willful[]’ violation.” (United States 

ex rel. Suarez v. AbbVie, Inc. (N.D. Ill. Sept. 30, 2019, No. 15 C 8928) 2019 

U.S. Dist. Lexis 169090, at p. *42, citing 42 U.S.C. § 1320a–7b(b)(1), (2).)3

The comparison to AKS cases hardly supports the inference that a willfulness 

requirement should be read into the UPL provisions applicable here. Rather, 

the comparison underscores the difference between statutory provisions that 

do and do not add willfulness to the “knowingly” standard. Unlike the AKS, 

willfulness is not an element of the CFCA provisions the banks are alleged to 

have violated here. 

Indeed, incorporating such an additional requirement would defeat the 

very purpose of the CFCA provisions in question. As the trial court observed,

requiring Controller notice as a prerequisite to a CFCA action “would have 

the perverse effect of rewarding defendants who deliberately defraud the 

State. If a defendant knowingly submits false reports, and the Controller is 

not otherwise made aware that it has understated or concealed its obligation 

to deliver funds to the State, by definition the Controller could not provide 

written notification to the defendant of its failure to comply. Such a result 

would severely undermine the [C]FCA, the core purpose of which, like the 

3 See also Gonzalez v. Fresenius Medical Care North America (5th Cir. 

2012) 689 F.3d 470, 476 [relator did not demonstrate defendants violated 

FCA by falsely certifying compliance with AKS because relator “did not 

provide legally sufficient evidence that [defendants] knowingly and willfully 

entered into an illegal kickback scheme”]; United States ex rel. Osheroff v. 

Tenet Healthcare Corp. (S.D. Fla. July 12, 2012, No. 09-22253-CIV) 2012 U.S. 

Dist. Lexis 96434, at p. *36 [“To the extent Relator can properly plead 

violations of AKS . . . in its amended complaint together with Defendants’

certifications of compliance with AKS . . . , such allegations would suggest 

knowledge of a false certification under the FCA.”].
15

federal FCA on which it was based, is ‘to encourage suits by individuals with 

valuable knowledge of fraud unknown to the government.’ ” 

The banks assert that “if the Controller is unaware of the potential 

violation and learns of the conduct through a qui tam filing, the Controller 

can make the necessary assessment and issue notice after the filing if she

agrees that a punishable UPL violation has occurred.” But if Controller notice 

were a prerequisite to a CFCA cause of action, there would never be an 

incentive for an individual to file a CFCA complaint. Should the plaintiff file 

the action under seal before notice is given to the defendant, the defendant 

could immediately cure the underpayment and avoid liability under both the 

UPL and CFCA. If a plaintiff waited to file suit until after the Controller 

provided notice, such an action would be subject to the jurisdictional bar of

actions based upon allegations or transactions that are the “subject of a civil 

suit or an administrative civil money penalty proceeding in which the state or 

political subdivision is already a party.” (Gov. Code, § 12652, subd. (d)(2); see 

also Gately v. City of Port Hueneme (C.D.Cal. Oct. 2, 2017, No. CV 16-4096-

GW(JEMX)) 2017 U.S. Dist. Lexis 222662, at p. *28, fn. 10 [false claims 

action barred because administrative civil money penalty proceeding began 

with agency’s demand for repayment, “which came two months before 

Plaintiffs first filed his complaint”].)

We therefore consider it very clear that prior notice of the violation 

from the Controller is not a prerequisite of a CFCA action predicated on a 

violation of the UPL. 

5. Established Obligation

The banks argue that the complaints fail for a separate reason: failure 

to allege that they were obligated to report and deliver to California money 
16

owed on uncashed cashier’s checks. We disagree and conclude the complaints 

adequately allege the banks were under such an obligation. 

To state a false claim, the pleading must allege the violation of an 

“obligation.” (Gov. Code, § 12651, subd. (a)(7) [a person makes a false claim if 

he “[k]nowingly makes, uses, or causes to be made or used a false record or 

statement material to an obligation to pay or transmit money or property to 

the state or to any political subdivision, or knowingly conceals or knowingly 

and improperly avoids, or decreases an obligation to pay or transmit money 

or property to the state or to any political subdivision”], italics added.) The 

CFCA defines an obligation as “an established duty, whether or not fixed, 

arising from an express or implied contractual, grantor-grantee, or licensorlicensee relationship, from a fee-based or similar relationship, from statute or 

regulation, or from the retention of any overpayment.” (Gov. Code, § 12650, 

subd. (b)(5).)

We must assess the sufficiency of the allegations in the two complaints 

under the pleading requirements for a CFCA cause of action. “ ‘As in any 

action sounding in fraud, the allegations of a [CFCA] complaint must be 

pleaded with particularity.’ ” (State of California ex rel. McCann v. Bank of 

America, N.A., supra, 191 Cal.App.4th at p. 906.) “Allegations of the 

defendant’s knowledge and intent to deceive may use conclusive language, 

however.” (City of Pomona v. Superior Court (2001) 89 Cal.App.4th 793, 803.)

“The specificity requirement serves two purposes. The first is notice to the 

defendant, to ‘furnish the defendant with certain definite charges which can 

be intelligently met.’ [Citations.] The pleading of fraud, however, is also the 

last remaining habitat of the common law notion that a complaint should be 

sufficiently specific that the court can weed out nonmeritorious actions on the 

basis of the pleadings. Thus, the pleading should be sufficient ‘ “to enable the 
17

court to determine whether, on the facts pleaded, there is any foundation, 

prima facie at least, for the charge of fraud.” ’ ” (Committee on Children’s 

Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216-217.)

The complaints allege the source of the banks’ obligation is 

section 1511, the provision of the UPL stating that “[a]ny sum payable on a 

money order, travelers check, or other similar written instrument (other than 

a third-party bank check)” escheats to California if the instrument was 

purchased in California. (§ 1511, subd. (a)(1).) Elder contends that the 

cashier’s checks at issue are “similar written instrument[s]” to money orders 

and travelers checks and, because they were purchased in California, the 

uncashed checks escheated to California. The banks respond that there is no 

established obligation for them to transmit unclaimed money owed on 

cashier’s checks as escheated property in their place of purchase, as there is 

no explicit statutory requirement or other authority stating that cashier’s 

checks are similar to money orders and travelers checks. 

The complaints allege that at least some of the cashier’s checks were 

subject to escheat in California under the last-known-address rule in section 

1510. The complaints allege that the banks “regularly issue[] cashier’s checks 

to its account holders, many of whom purchase the cashier’s checks for 

themselves,” and that “[a]s to such checks, including such checks purchased 

in California, [the banks’] records contain the last known address of every 

purchaser/payee owner.” The complaints also identify some cashier’s checks 

with payees that certainly have their address in California, such as the State 

Bar of California, the California Department of Motor Vehicles, and the 

Medical Board of California. At least two federal district courts, including the 

district court that presided over this matter before it was remanded to the 

superior court, credited the same allegations in concluding the complaints do 
18

not present federal questions. (See California ex rel. Elder v. J.P. Morgan 

Chase Bank, N.A. (N.D.Cal. Mar. 31, 2021, No. 21-CV-00419-CRB) 2021 U.S. 

Dist. Lexis 64374, at pp. *15–*16 [“[Elder] claims that Defendants have failed 

to escheat cashier’s checks to the State of California even when the check’s 

payee is also the purchaser and Defendants’ records show the 

payee/purchaser to reside in California. . . . For this subset of checks, no 

federal preemption defense is available.”]; Illinois ex rel. Elder v. U.S. Bank 

N.A. (N.D. Ill. Oct. 22, 2021, No. 21 C 926) 2021U.S. Dist. Lexis 204052, at 

p. *9 [citing allegation that U.S. Bank’s records “ ‘contain the last known 

address of every purchaser/payee owner’ ” in deciding that a similar

complaint under Illinois law did not present a substantial federal question].)

We likewise credit the complaints’ allegations in concluding they adequately 

allege a failure to report and deliver property based on the owner’s last 

known address.

Moreover, cashier’s checks are sufficiently similar to money orders and 

travelers checks to be considered, at least at the pleading stage, “similar 

written instrument[s]” within the meaning of section 1511. Subdivision (a) of 

section 1511 applies to other similar written instruments “on which a 

business association is directly liable.” Under federal law, a cashier’s check is 

an instrument on which a business association is directly liable. (See 12 

U.S.C. § 4001(5) [cashier’s check is “a direct obligation” of a “depository 

institution”].) And, while it may be, as the banks argue, that no case has 

expressly held cashier’s checks are similar to money orders and travelers 

checks, cashier’s checks share the same fundamental characteristics as 

money orders and travelers checks. Like money orders and travelers checks, 

cashier’s checks are issued upon receipt of payment with the obligation to 

deliver that payment to the bearer upon presentation of the instrument; if 
19

the instrument is never presented, the issuer retains funds that rightfully 

belong to another. The California Uniform Commercial Code defines a 

cashier’s check as “a draft with respect to which the drawer and drawee are 

the same bank or branches of the same bank.” (Cal. U. Com. Code, § 3104, 

subd. (g).) And a money order can be considered a type of check. (Cal. U. Com. 

Code, § 3104, subd. (f) [“An instrument may be a check even though it is 

described on its face by another term, such as ‘money order.’ ”].) The

comments in the Commercial Code confirm that money orders can be sold by 

banks, and that the bank is the drawee of such a money order, just as they 

are for cashier’s checks. (Cal. U. Com. Code, § 3104, coms., § 4.) Indeed, one 

treatise on the Commercial Code, citing a case from Ohio, has observed 

“ ‘Bank money orders . . . are essentially the same as cashier’s checks.’ ” (5A 

Lawrence’s Anderson on the U. Com. Code (3d ed. 2021) § 3-104:36, p. 141.)

As above, Bowen does not support the banks’ arguments. The court in 

Bowen concluded that the plaintiff had not alleged a definitive obligation to 

report reconveyance fees as escheated property because he did not allege

“that any of the contracts provided for the specific remedy of disgorgement of 

the reconveyance fees, or that any judgment was entered to that effect.” 

(Bowen, supra, 126 Cal.App.4th at p. 230.) The Civil Code section requiring a 

lender to refund a reconveyance fee if a release of obligation was previously 

recorded was not enacted until after the time period in which the banks 

allegedly failed to refund the reconveyance fees. (Id. at p. 243.) In contrast, 

the present complaints identify a source of the obligation to report and 

deliver the cashier’s checks—sections 1510 and 1511—under extant law when 

the banks allegedly held the unclaimed funds. McCann is distinguishable for 

the same reason. The plaintiff in McCann only identified an allegedly 

fraudulent practice—the “failure to investigate unidentified credits and to 
20

then credit them to presenting banks”—but did not allege the “existence of 

any legal obligation for [the bank] to do otherwise, or to directly identify an 

amount or account—a liquidated and certain obligation—due to any specified 

presenting bank (in California or elsewhere) that would be subject to escheat 

under the UPL.” (State of California ex rel. McCann v. Bank of America, N.A., 

supra, 191 Cal.App.4th at pp. 909–910.)

The banks argue that representations made on behalf of the State of 

California in the so-called “Moneygram” case pending before the United 

States Supreme Court4 demonstrate that it is unclear whether cashier’s

checks are similar to money orders and travelers checks, negating any 

possibility of a knowing violation under the UPL. This argument was not 

raised until the banks’ reply briefs, so may be disregarded. (See American 

Indian Model Schools v. Oakland Unified School Dist. (2014) 227 Cal.App.4th 

258, 275 [“We will not ordinarily consider issues raised for the first time in a 

reply brief.”].) Even if considered, the argument does not necessarily negate 

the allegation that the banks knew they were engaging in conduct proscribed 

by the statute. At issue in the Moneygram case is whether “Moneygram 

Official Checks” are “similar written instrument[s]” to money orders and 

travelers checks under the Federal Disposition Act, 12 United States Code 

section 2503. The banks cite a brief submitted on behalf of California and 

approximately 30 other states, which asserts that whether the Federal 

Disposition Act applies to numerous pre-paid instruments, including cashier’s 

checks, is not at issue in the case “and need not be decided. Such a decision 

would require a detailed analysis based on the specific characteristics of 

those products and how they function in the marketplace.” This statement 

4 (Delaware v. Arkansas (Nos. 22O145 & 22O146) motion for leave 

granted Oct. 3, 2016, __ U.S. __ [__ S.Ct. __, __ L.Ed.2d 643 __].)
21

hardly acknowledges that cashier’s checks are not similar to money orders

and travelers checks; at most it underscores the inappropriateness of

resolving the issue at the pleading stage. In a “detailed analysis” following

discovery and the consideration of expert testimony, the banks may attempt

to prove that the cashier’s checks in question are not sufficiently similar to 

money orders and travelers checks to fall within section 1511. But for 

pleading purposes, the complaints adequately allege the existence of an 

obligation as required under the CFCA.5

6. Due Process

The banks also argue that awarding the relief prayed for in these 

complaints would violate their due process rights by subjecting them to a 

“double escheat” because they would be obligated to report and deliver the 

same unclaimed property in two states, California and Ohio. The banks rely 

on Western Union Tel. Co. v. Pennsylvania (1961) 368 U.S. 71, in which the

Supreme Court held that Western Union was denied due process of law by an 

escheat judgment in Pennsylvania because the judgment did not protect 

5 We decline JP Morgan’s request for judicial notice of two briefs and a 

special master’s report filed in the Moneygram case. We do, however, take

note of a recent interlocutory ruling in Illinois ex rel. Elder v. JPMorgan 

Chase Bank, N.A. (N.D. Ill. Aug. 30, 2022, No. 21 C 85) ___ F.Supp. 3d ___

[2022 U.S. Dist. Lexis 155979], but consider its significance limited. There 

the federal district court, relying on filings from the Moneygram case, granted 

a motion to dismiss with leave to amend after concluding that the phrase 

“other similar instrument” is ambiguous and that the complaint did not 

adequately allege scienter in the absence of “allegations that authoritative 

guidance cautioned defendant away from its interpretation that cashier’s 

checks are not ‘similar instruments’ within the meaning of [the federal 

statute].” (Id. at p.*19.) We do not agree that any such allegation is necessary 

under California pleading requirements or that such “authoritative guidance” 

is indispensable to prove that defendants knew that the uncashed cashier’s 

checks were subject to escheatment in California.
22

Western Union from competing claims by other states to the same money. 

(Id. at p. 76.) There was an “active controversy” because New York was 

making a “particularly aggressive” claim to the same money subject to the 

Pennsylvania escheat judgment. (Ibid.) Here, neither the complaints nor any 

other judicially noticeable facts brought to our attention disclose that Ohio or

any other state has laid claim to, or obtained a judgment for, the money owed 

on the cashier’s checks at issue here.6 Nor does Ohio’s unclaimed property

law, at least on its face, conflict with California’s UPL such that there is a 

risk the two states are competing for the same funds. (See Ohio Rev. Code 

Ann., § 169.02(F) [when no address of record for owner of cashier’s check, 

address is presumed to be “where the instrument was certified or issued”]; 

Ohio Rev. Code Ann., § 169.04(A) [funds owing to owner whose last known 

address is in another state are not unclaimed funds under Ohio unclaimed 

property law].) Moreover, the complaints seek penalties under the CFCA, 

which are not the same as the funds owed on those cashier’s checks. 

Whatever facts may be disclosed at trial, the pleadings disclose no potential 

due process violation.

DISPOSITION

The petitions for writ of mandate are denied. Elder shall recover his 

costs in this proceeding. (Cal. Rules of Court, rule 8.493(a).)

6 We decline JP Morgan’s request for judicial notice of three complaints 

Elder filed in other cases in Indiana, New Jersey, and Illinois, as those 

complaints are not relevant to whether the banks are facing competing

claims from California and Ohio to the cashier’s checks at issue here. (See 

Meridian Financial Services, Inc. v. Phan (2021) 67 Cal.App.5th 657, 700, 

fn. 10 [“An appellate court ‘may decline to take judicial notice of matters not 

relevant to dispositive issues on appeal.’ ”].)
23

POLLAK, P. J.

WE CONCUR:

STREETER, J.

BROWN, J.
24

Trial court: San Francisco County Superior Court

Trial judge: Honorable Ethan P. Schulman

Counsel for Petitioner JPMorgan

Chasebank, N.A.:

MORGAN, LEWIS & BOCKIUS LLP

Douglas W. Baruch

Jennifer M. Wollenberg

Neaha P. Raol

Thomas M. Peterson

Joseph E. Floren

Counsel for Petitioner U.S. Bank 

National Association:

BUCKLEY LLP 

James R. McGuire 

Sarah N. Davis

Andrew W. Schilling (Pro Hac Vice)

Jackson Hagen (Pro Hac Vice)

Counsel for Respondent: No appearance

Counsel for Amicus Curiae, Attorney 

General, the State of California

Rob Bonta

Attorney General Of California

Matthew Rodriquez

Chief Assistant Attorney General 

Martin H. Goyette

Senior Assistant Attorney General 

Jacqueline Dale

Supervising Deputy Attorney General

Brendan Ruddy

Deputy Attorney General 

Counsel for Real Party in Interest

Ken Elder:

SILVER GOLUB & TEITELL LLP

David S. Golub 

DENVER LAW GROUP

Michael P. Denver

GOLENBOCK EISEMAN ASSOR BELL & 

PESKOE LLP 

Michael S. Devorkin