Opinion ID: 3036584
Heading Depth: 3
Heading Rank: 1

Heading: Return of the Class’s Property

Text: [1] The Eleventh Amendment does not bar the class’s claims insofar as the claims request the return of the class’s property. This court in Taylor held that the Eleventh Amendment did not apply to funds that had been escheated, but not permanently escheated, because the State held such funds in custodial trust for the benefit of property owners—the funds were not State funds. Id. at 931 (“Before California escheated property is ‘permanently’ escheated, it is like a car that is towed and held in an impound lot. The car is in the custody of the impounding government, but it is held for its owner, if one turns up.”). Claims requesting the return of individuals’ property are less likely to offend a state’s sovereign immunity than claims requesting the payment of government funds. See id. at 932-35. Hence, although the Eleventh Amendment ordinarily bars claims primarily requesting funds held in the State’s coffers, sovereign immunity does not apply to claims alleging such funds are individuals’ property that the State improperly seized through ultra vires or unconstitutional acts. Id. 2650 SUEVER v. CONNELL [2] Taylor found that the Eleventh Amendment did not bar the plaintiffs’ claims requesting return of the plaintiffs’ property because these claims alleged both ultra vires and unconstitutional acts. Taylor employed the sovereign immunity framework established in Malone v. Bowdoin, 369 U.S. 643, 647 (1962): [A] plaintiff[’s] . . . claim for return of his property [will not be barred by state sovereign immunity] . . . if the claim falls into one of two categories: (1) it must be based on the public official having acted beyond his statutory authority (the “ultra vires exception”) or (2) the plaintiff’s theory must be that the action leading to the government’s possession of the property was constitutionally infirm. 402 F.3d at 933 (quoting Washington v. Udall, 417 F.2d 1310, 1316 (9th Cir. 1969)) (footnotes omitted). The plaintiffs in Taylor averred that the Controller seized their property through ultra vires acts. An official’s act is not ultra vires just because he erroneously applies his delegated duty but only when he acts outside the scope of his duty. Id. “[A]llegations that an officer violated ‘a plain legal duty’ can take the officer’s actions outside the scope of her delegated responsibilities.” Id. at 934 (quoting Udall, 417 F.2d at 1316). Some of the plaintiffs’ claims in Taylor alleged the Controller had violated a “plain legal duty”: the “plaintiffs assert[ed] that they and their stock were wholly outside the escheat scheme because they were never actually ‘lost’ as the statute requires.”9 Id. at 934. 9 For instance, the complaint in Taylor alleged that “[t]he Controller takes these actions though the individual is known to the company and a list of the known owners of the stock is provided to the Controller that includes, in nearly every case, the stockowners’ addresses, taxpayer and social security numbers.” 402 F.3d at 934 n.53 (citing Cal. Civ. Proc. Code § 1516). SUEVER v. CONNELL 2651 The plaintiffs in Taylor also averred that the Controller escheated their property through unconstitutional acts. The complaint in Taylor alleged that the Controller violated the plaintiffs’ due process rights by failing to give adequate notice before seizing their property. Id. The Taylor court concluded, “Assuming that the plaintiffs’ allegations are true, as we must, the Controller failed to give ‘notice reasonably calculated, under all the circumstances, to apprise interested parties’ of the fact that their property was being taken and sold.” Id. (quoting Mullane, 339 U.S. at 314). [3] Applying Taylor’s principles to the highly analogous facts here, the Eleventh Amendment does not bar the class’s claims requesting the return of the class’s property. First, the complaint here avers that the Controller acted ultra vires by improperly seizing property ineligible for escheat. Like the complaint in Taylor, the class’s complaint avers that the Controller seized property from “known” property owners.10 Second, the complaint avers that the Controller acted unconstitutionally by providing inadequate notice to property owners whose property was to be escheated. Accordingly, the class’s request that the Controller return the members’ property is not barred by the State’s sovereign immunity.