A federal judge Tuesday dismissed a potential class-action lawsuit in Florida challenging the constitutionality of a law that directs the state’s handling of unclaimed property.
The lawsuit, filed last year, alleged that the state does not provide “just compensation,” such as interest, to owners who ultimately claim property. It contended that the system results in an unconstitutional “taking” of property.
The law involves people’s property that has been held by such things as banks and insurance companies. When the property is believed to be unclaimed, it is turned over to the state. Examples are money, unclaimed insurance proceeds and items in safe-deposit boxes.
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Unclaimed money is deposited into what is known as the State School Trust Fund, which helps support public schools.
The state also periodically holds auctions of unclaimed items. If owners or their heirs find out about the unclaimed property, they can recover money from the state, but not interest.
Attorneys for the named plaintiffs, St. Petersburg residents Alieda and Lawrence Maron, argued in the lawsuit that the state should be required to “pay them for the time or other value of their property while it was in the state’s custody and being used for public purposes.”
But U.S. District Judge Robert Hinkle sided with state Chief Financial Officer Jimmy Patronis, who oversees unclaimed property, and rejected the challenge.
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“The Florida Disposition of Unclaimed Property Act (the law) requires the holder of property that is unclaimed for a specified period — property that appears to be abandoned — to turn the property over to the state,” Hinkle wrote in a 14-page decision. “The act gives the owner unlimited time to recover the property or the proceeds of the property’s sale or other conversion to money. But the act does not require the state to pay interest or other compensation for the period when the property was abandoned. This does not violate the United States Constitution Fifth Amendment Taking Clause.”
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