Opinion ID: 2785417
Heading Depth: 2
Heading Rank: 2

Heading: Appellants Incorrectly Interpret Section

Text: 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 Section 1531.5. Under Appellants’ interpretation of the law, when generating the pre-escheat notices, the Controller is required to utilize Section 1531.5 and search additional databases in an attempt to locate property owners. Contrary to Appellants’ position, it appears this Court did not rely on Section 1531.5, which applies post-escheat, in determining the facial constitutionality of the revised UPL. Indeed, the only reference to Section 1531.5 found in Taylor III was in a citation where the Court mentioned California had overhauled its escheat law. 7 Taylor III, 7 In Taylor III, this Court provided a brief history of the case stating, After 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 also id. 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. Taylor III, 525 F.3d at 1289. This is the only mention of Section 1531.5 in the opinion. 20 TAYLOR V. YEE 525 F.3d at 1289. Rather, it was the requirement that the Controller provide reasonable pre-escheat notice that brought the UPL into constitutional compliance, as this Court stated: On 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, 70 S.Ct. 652, 94 L.Ed. 865 (1950), and Jones v. Flowers, 547 U.S. 220, 126 S.Ct. 1708, 164 L.Ed.2d 415 (2006). Under the new law, the Controller 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,’” Flowers, 547 U.S. at 226, 126 S.Ct. 1708 (quoting Mullane, 339 U.S. at 314, 70 S.Ct. 652). Thus, the plaintiffs’ challenge, to the extent that it is a facial challenge against the new law, fails. Id. (emphasis added). That Section 1531.5 relates only to post-escheatment procedures is clear from the language of that section, titled “Notification program for possible owners of escheated property,” which states “[t]he Controller shall establish and conduct a notification program designed to inform owners about the possible existence of unclaimed property received pursuant to this chapter.” Cal. Civ. Proc. Code § 1531.5(a) (emphasis TAYLOR V. YEE 21 added). 8 Therefore, Section 1531.5 does not mandate that the Controller seek access to additional databases to locate property owners to provide pre-escheat notice. 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 Section 1531.5 was not available until after the property is received by the Controller. Appellees correctly note that this Court’s focus in Taylor II and Taylor III was on notice being provided by the Controller before the property was transferred to the State, that is, escheated, and therefore Section 1531.5 could not have been a deciding factor for the Court in Taylor III, as Appellants argue. Furthermore, Section 1531.5 is permissive in that it allows state and local agencies to furnish records “upon the request of the Controller,” but it does not mandate that the Controller request such records. Cal. Civ. Proc. Code § 1531.5(c)(1). It seems clear that the purpose of this provision is to permit the agencies to disclose personal information that would be non-disclosable in the absence of this statutory waiver. Rather than a mandate that the Controller use the agencies’ databases, Section 1531.5 provides legal cover for the agencies’ disclosure of such personal information should the Controller opt to request it. Therefore, Appellants’ argument that the Controller does not meet the Mullane-Jones standard because she fails 8 Moreover, at oral argument Appellants’ counsel conceded that Section 1531.5 does not apply pre-escheat. 22 TAYLOR V. YEE to utilize data made available by Section 1531.5 is without merit as it is based upon a misinterpretation of the statute. Moreover, in trying to provide pre-escheat notice to owners of unclaimed property, the Controller does take “additional reasonable steps to notify [the owners], if practicable to do so.” Jones, 547 U.S. at 234. If provided with a Social Security number, the Controller utilizes the Franchise Tax Board’s database to determine if there is a more current address. The Controller also provides notice in the newspaper to explain to the public generally that it is holding properties that may belong to the readers. Finally, the Controller maintains a searchable website where individuals can determine whether they are the owners of unclaimed property, and if so, can submit a claim form. 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 Section 1531.5, to go as far as Appellants suggest. 9 9 Appellants take issue with the Controller’s use of the Franchise Tax Board database, arguing that TAYLOR V. YEE 23