Federal judge dismisses potential class-action lawsuit challenging Florida’s unclaimed property handling

by | Sep 7, 2023



  • A federal judge dismissed a potential class-action lawsuit against Florida Chief Financial Officer Jimmy Patronis, challenging Florida’s handling of unclaimed property.
  • The lawsuit alleged that the state’s practices violated the Fifth Amendment’s takings clause by failing to provide just compensation to property owners.
  • The judge ruled that Florida’s Disposition of Unclaimed Property Act did not require the state to provide interest or other compensation for abandoned property, thus not violating the Fifth Amendment Taking Clause and effectively dismissing the lawsuit.

A federal judge dismissed a potential class-action lawsuit against Florida Chief Financial Officer Jimmy Patronis that challenged the constitutionality of Florida’s handling of unclaimed property.

The case, filed by St. Petersburg resident Alieda Maron, raised questions about whether the state’s practices violated the Fifth Amendment’s takings clause by failing to provide just compensation to property owners.

Maron’s lawsuit, filed in the Northern District of Florida in July 2022, alleged that the state, through the Department of Financial Services (DFS), acquired unclaimed properties for public use but only returned the cash value to owners who filed valid claims. This practice, according to the suit, overlooked interest and time values that the state accrued under its own laws.

The crux of Maron’s argument was that the system effectively allowed the state to “enjoy an interest-free loan” of unclaimed private property funds, which were co-mingled with the state’s School Fund while in its custody. The lawsuit sought financial relief and an injunction, demanding that the state pay owners the full value of their properties, including interest, when future claims were filed. The potential class Maron aimed to represent encompassed over 350,000 affected individuals.

However, U.S. District Judge Robert Hinkle, in his 14-page decision, sided with Patronis, who oversees the unclaimed property. Hinkle contended that Florida’s Disposition of Unclaimed Property Act did not compel the state to provide interest or other compensation for the period when property was abandoned. He concluded that this practice did not violate the United States Constitution’s Fifth Amendment Taking Clause, effectively dismissing the lawsuit.

“The Florida Disposition of Unclaimed Property Act 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. The Act gives the owner unlimited time to recover the property or the proceeds of the property’s sale or other conversion to money,” reads Hinkle’s Dismissal Order. “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.”

Florida’s unclaimed property law pertains to personal property held by third parties such as banks or insurance companies. If the owner fails to claim possession within specific time constraints, the property is classified as “presumed unclaimed” and turned over to the state. Unclaimed money is subsequently deposited into the State School Trust Fund, supporting public schools, with the state also conducting periodic auctions of unclaimed items.

“I would like to applaud Judge Hinkle for dismissing this case with prejudice, without the need for a trial,” said Patronis. “Florida’s unclaimed property program provides hundreds of millions of dollars to the state’s K-12 system – and once those funds are claimed – every cent that is rightfully owed to the claimant is returned to them. If this suit were successful, it would have taken funding out of the state’s school trust fund.”

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