[00:00:00] Speaker 02: We'll switch to the Mousseau case. [00:00:03] Speaker 02: Mousseau versus Crum. [00:00:12] Speaker 02: And you're back again. [00:00:14] Speaker 04: I'm back. [00:00:15] Speaker 04: Why don't you pick up where you left off? [00:00:17] Speaker 00: I will, thank you. [00:00:19] Speaker 00: So the same thing works in- You've got a lot more time to talk. [00:00:23] Speaker 00: It works in Alaska. [00:00:25] Speaker 00: By statute, they set an amount that's, here's what's in the custodial trust account. [00:00:30] Speaker 00: Here's the problem. [00:00:31] Speaker 00: Let's, I forget, last, I think it's 100,000 just like it is in Arizona, but I started with that, so let me finish with that scenario. [00:00:38] Speaker 00: They have $100,000 in the custodial trust account. [00:00:41] Speaker 00: It's not, I understand it's not the facts of this case, but hypothetically, let's say that my client has a claim for 200,000. [00:00:46] Speaker 00: The state can't take the position, well, sorry, [00:00:51] Speaker 00: Can we put you on a payment plan or just deny the claim altogether because you've exceeded what we've got in our custodial trust account? [00:00:58] Speaker 00: No, they have to retransfer the money from the general revenue fund into the custodial trust account and write the check and pay the claim. [00:01:06] Speaker 00: That is the way it works in California. [00:01:07] Speaker 00: That is the way it works in Alaska. [00:01:09] Speaker 00: That is the way it works in Arizona. [00:01:11] Speaker 00: They're just putting the money to use, which is fine, but they've got to retransfer it. [00:01:15] Speaker 04: California lays that out explicitly, the retransfer, and I think the argument on the other side is there is no explicit statutory language, but I did have a question about that. [00:01:25] Speaker 04: If that $100,000 or whatever the amount is in Alaska is depleted, does that mean that a person, that the state would not have to pay off a claim anymore? [00:01:36] Speaker 00: It can't mean that and I don't think they've taken the position that it means that of course they have to retransfer I acknowledge that it is explicit in the California system and [00:01:45] Speaker 00: But it's implicit. [00:01:47] Speaker 00: It has to work that way. [00:01:48] Speaker 00: They can't just say, sorry, your claim exceeds what's in our custodial trust account at the moment, so we're not going to pay your claim. [00:01:56] Speaker 00: Nor can they say, well, yes, you have a claim for $200,000, so we'll pay you $100,000 this year, and then we'll pay you $100,000 next year. [00:02:02] Speaker 00: It just doesn't work like that. [00:02:03] Speaker 00: That doesn't make any sense. [00:02:05] Speaker 00: And I don't think that's the statutory scheme that they're arguing for either. [00:02:08] Speaker 03: I don't think they took that position. [00:02:09] Speaker 00: I don't think they are either. [00:02:10] Speaker 03: So I'm wondering what we're talking about. [00:02:12] Speaker 00: Because I think that's the logical extension of saying that there is no custodial trust relationship and that's some distinction between Alaska and Arizona and California. [00:02:21] Speaker 00: There is no distinction. [00:02:22] Speaker 00: The system works precisely the same. [00:02:26] Speaker 00: I get it's explicit, but the system works the same. [00:02:29] Speaker 00: And the custodial relationship, it is in fact a bailment. [00:02:33] Speaker 00: They're taking possession of private citizens' property. [00:02:35] Speaker 00: They owe a duty to get it back. [00:02:37] Speaker 04: So if it is a custodial relationship, then wouldn't you agree that it can't be a taking under the line of cases? [00:02:44] Speaker 04: I mean, Taylor says that almost explicitly. [00:02:46] Speaker 04: If the state is holding the property in trust for someone else, then it hasn't been taken. [00:02:53] Speaker 04: I mean, I realize you may be raising claims in the alternative, but I'm thinking you prefer the custodial relationship side of things. [00:03:01] Speaker 00: I do, and my intent is to argue the due process. [00:03:04] Speaker 00: The taking is the alternative, which if they're going to say that they just took title to it and sovereign immunity applies and they don't have to give it back, then I think we do walk right into the Fifth Amendment, and there is a takings problem. [00:03:17] Speaker 00: we should avoid all of that by saying you have a custodial relationship, you have a duty to give pre-deprivation notice, and then there's no taking it and we can avoid that. [00:03:26] Speaker 04: But I do think you have a problem with the 7up case if it is a taking because that's, you know, my reading of that case is it's clear that you can't file that claim in federal court because of sovereign immunity. [00:03:38] Speaker 04: I don't know if you have a response to that. [00:03:40] Speaker 00: So my response to that, and again, this comes back to what's happening to title. [00:03:45] Speaker 00: I think it's clear that the state is taking custody and not title. [00:03:51] Speaker 00: Now, I get that Arizona just said they were taking title, but [00:03:56] Speaker 00: If it really is true, as I think the statute says, they're just taking custody and not title, then there is this issue of sovereign immunity that shouldn't apply. [00:04:09] Speaker 00: As the Taylor cases make clear, I think, that if it's our property, we have a right to get it back. [00:04:15] Speaker 00: We're not asking the state to part with any of its property. [00:04:19] Speaker 00: It's our property. [00:04:19] Speaker 00: We're just asking for that back. [00:04:21] Speaker 00: And so if the sovereign immunity precludes my clients from getting their own property back, then I think we have a takings problem. [00:04:31] Speaker 00: And so they're intertwined in that manner. [00:04:34] Speaker 02: Related to that point, is it true that in both the Arizona and the Alaska case, the plaintiffs are not trying to get interest or any other relief other than just whatever the amount was that is abandoned or deemed abandoned? [00:04:47] Speaker 00: That is true. [00:04:48] Speaker 00: That is true. [00:04:49] Speaker 00: And to that point, this carries over from Arizona, but in both places, we are contesting, it's just not really at issue before the court today, but we do allege in our complaint that the three years is, well, we allege that our client's property was never abandoned, and was never, shouldn't have been presumed abandoned, and had we gotten notice, we would have claimed it. [00:05:14] Speaker 00: So we do question the three years as an unconstitutionally short period of time, but I think that's a question for another day. [00:05:21] Speaker 00: I just wanted to be clear that we weren't condoning that part of the system. [00:05:25] Speaker 04: Well, on that point, Alaska is different procedurally because the district court only ruled on standing. [00:05:31] Speaker 04: That's right. [00:05:32] Speaker 04: So there seems to be many questions that have been left for another day. [00:05:37] Speaker 00: I think that's exactly right. [00:05:38] Speaker 00: And that's why I'm not or we put more in our brief than I think really needs to be decided. [00:05:44] Speaker 00: I'll confess because we didn't know exactly which direction the state was going. [00:05:49] Speaker 00: And in fact, in some states, some instances, they didn't really support the decision of the district court and kind of went a different direction. [00:05:55] Speaker 00: So we covered the spectrum, but I think [00:05:58] Speaker 00: The deprivation question is really all this court needs to resolve because if it is in fact a deprivation then of course due process attaches to that and if there's pre deprivation notice then we can we can move forward and I think that is the issue of Okay, I'm just I'm still Back to that. [00:06:17] Speaker 03: What is the deprivation if it moves from here? [00:06:21] Speaker 03: to there and the constitutionality of having a [00:06:27] Speaker 03: these statutes is not on the table. [00:06:30] Speaker 00: So there's a couple of issues there. [00:06:32] Speaker 00: One is, it's what I think the district court has done, and the appellees argued in support of, is they're conflating any distinction between a state actor and a private actor. [00:06:44] Speaker 03: And the issues that are- Let's just kind of unpack it all. [00:06:49] Speaker 03: So you're saying the deprivation is that moving it from the bank to the state is the deprivation. [00:06:56] Speaker 00: Yes. [00:06:58] Speaker 03: And how do you square that position with Anderson? [00:07:04] Speaker 00: So because Anderson says, based on prior notice, it was built into the Kentucky statute that there was notice before the bank turned over the property to the state of Kentucky. [00:07:20] Speaker 00: That's what we're asking for here, that same notice that was in the Kentucky system that was upheld. [00:07:26] Speaker 03: Your notice that you want is not the bank, but the state, is that right? [00:07:33] Speaker 03: Correct. [00:07:33] Speaker 03: And so again, your position is notice by the bank, which is operating under a state statute, and then the money's going into this pot in the sky, is insufficient simply as a matter of form because it didn't come from the state. [00:07:50] Speaker 00: Correct. [00:07:51] Speaker 00: That's the Taylor case. [00:07:53] Speaker 00: I'll quote it. [00:07:54] Speaker 00: Finally, the holder's obligation to provide notice did not satisfy the obligation of the state itself to give notice. [00:08:02] Speaker 00: That's what this court has held. [00:08:03] Speaker 04: But all these due process cases talk about notice reasonably calculated under all the circumstances, which suggests a more fact-specific inquiry for each thing. [00:08:16] Speaker 04: So what is it about the holder providing individualized notice that's not reasonably calculated? [00:08:21] Speaker 00: So a couple things. [00:08:23] Speaker 00: One, I think, to your point is we need to get more into that. [00:08:26] Speaker 00: We didn't challenge the former notice because we'd never seen it. [00:08:28] Speaker 00: We didn't get it. [00:08:29] Speaker 00: We don't know about the holder's notice because we don't think there was a notice. [00:08:31] Speaker 00: And the record in Arizona, I think, reflects that the holder didn't give notice, or at least there's no proof of it. [00:08:37] Speaker 00: But I think the common sense answer to that is to suggest that a notice in the mail, an envelope from the cable company, is the same as an envelope from the state. [00:08:48] Speaker 00: that they're equally likely to get opened, I think is a fallacy that makes no sense. [00:08:53] Speaker 03: That is not very convincing to me. [00:08:56] Speaker 03: So let's say you got notice from the bank. [00:08:59] Speaker 03: You opened it, but you never got notice from the state. [00:09:02] Speaker 03: Your argument would be, well, I never got that state notice with the nice little seal on the return, and therefore the notice is insufficient, if we accept your argument. [00:09:13] Speaker 00: I think there's good reason. [00:09:15] Speaker 00: Well, first of all, my argument, I think that was the common sense answer, which I think it's far more likely to get open rather than assume junk mail of, oh, this is the state. [00:09:24] Speaker 00: But look, the answer to the core of our position is that private actors don't have constitutional obligations. [00:09:31] Speaker 00: The state does. [00:09:32] Speaker 00: A state actor is different than the private actor. [00:09:35] Speaker 03: But can't the statute can, in effect, impose requirements on a private actor, right? [00:09:42] Speaker 03: So you didn't really answer my question. [00:09:44] Speaker 03: If you got notice from the bank, but you didn't get it from the state, your position is that there is a due process violation. [00:09:55] Speaker 00: Is that right? [00:09:55] Speaker 00: Yes. [00:09:55] Speaker 00: That is correct. [00:09:56] Speaker 00: OK. [00:09:57] Speaker 03: Just wanted to understand. [00:09:58] Speaker 00: All right. [00:09:58] Speaker 00: I just have a little bit of time I'd like to reserve for rebuttal. [00:10:01] Speaker 00: OK. [00:10:01] Speaker 00: Thank you. [00:10:15] Speaker 01: Good morning, may it please the court. [00:10:16] Speaker 01: My name is Laura Fox, and I present the state of Alaska. [00:10:19] Speaker 01: I'm going to focus my short time on Article 3 standing, because that's how the district court ruled, and it's jurisdictional. [00:10:25] Speaker 01: But I'd be happy to answer questions on the merits as an alternative basis for affirmance. [00:10:29] Speaker 01: As the Supreme Court summarized the law in TransUnion versus Ramirez, quote, no concrete harm, no standing. [00:10:37] Speaker 01: Here we have no concrete harm, so we have no standing. [00:10:40] Speaker 01: These plaintiffs haven't alleged that they've lost any money due to the act. [00:10:44] Speaker 01: or that there's any chance that they're going to lose money due to the act. [00:10:47] Speaker 01: They haven't even alleged that they've been inconvenienced due to the act or that they'll ever be inconvenienced due to the act. [00:10:53] Speaker 01: On the contrary, the Unclaimed Property Act actually helped them learn about money that they forgot about and preserved their ability to access to it, whereas otherwise it might have been lost to them forever. [00:11:05] Speaker 01: And to use a travel-related analogy, it's as if they forgot a suitcase under a chair at the airport [00:11:11] Speaker 01: And somebody took it to the lost and found as forecasted by signs telling everyone unclaimed, unattended property is going to be brought to the lost and found. [00:11:21] Speaker 01: And then instead of just going to the lost and found and claiming it, they sued the lost and found for just for touching it. [00:11:28] Speaker 01: That's not a concrete harm sufficient for Article 3 standing. [00:11:32] Speaker 01: the Unclean Property Act helped them, it didn't harm them in any way. [00:11:36] Speaker 04: What about the loss of the possessory interest? [00:11:39] Speaker 04: To go back to my earlier hypothetical, if money gets moved from a bank account that I have, the holder transfers it over to the state of Alaska without my knowing about it, let's assume notice is inadequate. [00:11:55] Speaker 04: Why isn't, even if it's held in custody by the state, why isn't the loss of my possessory interest not a concrete injury? [00:12:05] Speaker 01: Well, these plaintiffs weren't actually possessing their money. [00:12:08] Speaker 01: If they had been in any sense using or possessing their money in any meaningful sense before the state took custody, that would be a different situation and you might be able to imagine a different hypothetical plaintiff [00:12:19] Speaker 01: or a different hypothetical law and the interaction of those things creating standing. [00:12:23] Speaker 02: But here... That's a really... It seems like that could lead to unintended consequences to say that every time that we have money held by a bank or some third party that we're not possessing it. [00:12:35] Speaker 02: How does that fit within just general views of property law? [00:12:39] Speaker 01: Well, these plans haven't even alleged that they had any idea that this money existed at this point. [00:12:43] Speaker 01: So the state has set up this reasonable system where it's publicly noticed in the law. [00:12:49] Speaker 02: I get that, but I don't understand the argument that the person who we're all saying owned the money or whatever the property is. [00:12:57] Speaker 02: Here it was money, I think. [00:13:01] Speaker 02: doesn't have a possessory interest because it's being held in an account by another party? [00:13:06] Speaker 01: Well, what they have is the right to claim it from that third party. [00:13:10] Speaker 01: And they do have that right. [00:13:12] Speaker 01: They have the ownership interest. [00:13:14] Speaker 01: They have the interest in the value. [00:13:16] Speaker 01: They have the interest in claiming it from that third party. [00:13:18] Speaker 01: But they still have that here that hasn't been taken from them. [00:13:20] Speaker 01: All that's been taken from them is the ability to leave it forever in a dormant account with a third party holder without interacting with it, which is a right that they don't have. [00:13:30] Speaker 01: under the reasonable system that the state set up. [00:13:33] Speaker 01: So the state set up this system that says, you know, you can't leave your money forever without touching it in a third party account. [00:13:40] Speaker 01: Different periods for different kinds of property depending on how often we would expect you to be touching it. [00:13:45] Speaker 01: For example, like a retirement account, you never touch it, obviously, until you retire. [00:13:49] Speaker 01: The period for abandonment doesn't begin until you would be expected to retire and have mandatory distribution. [00:13:55] Speaker 01: So the state set up this system. [00:13:57] Speaker 01: It says, you can't leave your suitcase under the chair forever and expect it to be there when you come back. [00:14:02] Speaker 01: It's going to go to the lost and found. [00:14:04] Speaker 01: You can still come claim it. [00:14:05] Speaker 01: So the only thing that's been taken from them is something that they don't have a right to under the way the laws are set up. [00:14:10] Speaker 03: Well, that's quite a clear analogy, because what I think the claim that they're making that I've finally divined, I think, from counsel is the notice by the bank is insufficient. [00:14:27] Speaker 03: because it's not by the state. [00:14:29] Speaker 03: What is your response to that? [00:14:30] Speaker 01: Well, before we even get to that, we have two analytical hurdles, which are standing and then is there a deprivation, right? [00:14:38] Speaker 01: So before we even get to whether the notice is sufficient, whether it had to come from the state or from the holder, [00:14:45] Speaker 01: We still have to say, do they have a concrete harm or a concrete risk of harm to their concrete interests? [00:14:50] Speaker 01: They don't. [00:14:51] Speaker 01: And then, do they have a deprivation? [00:14:52] Speaker 01: And no, as I was just explaining, they don't. [00:14:55] Speaker 01: And I would also want to say that standing. [00:14:56] Speaker 03: Well, they would say that there's two parts to the due process, and that they're really alleging the first part, which is in complete notice. [00:15:09] Speaker 03: And they're not alleging an actual taking. [00:15:12] Speaker 03: Well, they are, but let's just say [00:15:14] Speaker 03: that it's not a taking, but they're really only alleging the notice issue. [00:15:20] Speaker 03: So how does that get analyzed in the standing rubric? [00:15:25] Speaker 01: Well, standing doesn't collapse entirely into the merits when it comes to a due process claim, such that all you have to do is, you know, the court has to get to the final merits of the due process claim to decide if somebody has standing or that all you have to do to have standing is just bring a due process claim. [00:15:43] Speaker 01: So standing is a, [00:15:44] Speaker 01: substantively distinct hurdle before we get to the merits. [00:15:48] Speaker 04: But I think the hurdle for you is in Taylor 2, the panel there did describe the concrete injury as property being is sheeted by the state without notice. [00:16:02] Speaker 04: I mean, it's directly into the line that I read earlier. [00:16:05] Speaker 01: Well, but the court said when it was looking at standing, which was only discussed in one of the earlier cases and not throughout the rest of the case, [00:16:13] Speaker 01: and I think can't be divorced from the overall context. [00:16:16] Speaker 01: What the court said is they've clearly have concrete harm. [00:16:21] Speaker 01: They've lost their securities to a sheet, is what the court said. [00:16:24] Speaker 01: I mean, because in that case, as soon as the stocks transferred, California sold them and the plaintiffs lost millions of dollars. [00:16:32] Speaker 01: I think that was obviously a concrete harm. [00:16:34] Speaker 01: And the whole rest of the case, as far as standing, has to be viewed in the light of [00:16:38] Speaker 01: The consequence of transferring these stocks to California was that they were going to be immediately sold, so then you weren't going to have stocks anymore. [00:16:45] Speaker 01: And these particular plaintiffs, one of them, her shares were lost entirely. [00:16:49] Speaker 01: She lost all of her money. [00:16:50] Speaker 01: The other plaintiff lost millions of dollars. [00:16:52] Speaker 01: So here we have nothing like that. [00:16:54] Speaker 01: And so, you know, these plaintiffs haven't lost ownership of their money. [00:16:59] Speaker 01: They haven't lost value of their money. [00:17:01] Speaker 01: They haven't lost any sort of access to their money. [00:17:04] Speaker 01: They have the same access to their money that they had before. [00:17:07] Speaker 01: And you could definitely imagine, you know, hypothetical different set of laws, hypothetical different plaintiffs who were in some way inconvenienced by, you know, if the state, for example, [00:17:17] Speaker 01: was going in and taking money out of somebody's checking account that they're using and creating some risk that they're not going to be able to pay their bills, that person would have standing. [00:17:26] Speaker 01: But that's not how these laws operate. [00:17:28] Speaker 01: And that's not what these plants have alleged. [00:17:31] Speaker 03: Would the standing then depend? [00:17:32] Speaker 03: Well, you're saying it has to have some kind of concrete loss. [00:17:35] Speaker 03: That's your bottom line, right? [00:17:36] Speaker 01: Well, the standing depends on the facts that the plaintiffs have alleged about themselves, because it has to be their standing. [00:17:42] Speaker 01: And it's always going to depend on their specific facts. [00:17:44] Speaker 03: And these plaintiffs... So then in these series of unclaimed property laws, it may well depend on the type of property that has cheated to the state, right? [00:17:56] Speaker 03: And then you look at the individual [00:17:58] Speaker 03: claimed loss or no loss, right? [00:18:00] Speaker 01: Right. [00:18:01] Speaker 01: I mean, well, every plaintiff, it's going to depend on their facts and whether they have standing, just as in every case. [00:18:08] Speaker 01: And here, I mean, these plaintiffs, like I said, haven't even alleged that they knew that this money even existed, much less, I mean, they haven't even alleged, hey, I would have preferred that, like Mr. Mousseau, for example, hasn't even alleged, I would have preferred that my money had stayed with my landlord from back in 2017. [00:18:23] Speaker 01: I wish my landlord from 2017 was still hanging on to my $25 to $50. [00:18:28] Speaker 01: and that would be my personal preference rather than it going to the state. [00:18:31] Speaker 01: They haven't even made that [00:18:32] Speaker 01: that allegation, much less an allegation about how the money transferring to the state where they can still get it on request actually causes them concrete harm. [00:18:41] Speaker 04: But I mean, I don't think the district court was relying on what you're arguing here, that they didn't know about the money being... So if someone knew about their money in their account, but wasn't intending to do anything with that money just to keep it there, and then it gets issued under the unclean property, [00:18:59] Speaker 04: Would that change your analysis of whether they're standing in that case? [00:19:03] Speaker 01: Well, I mean, what I'm saying is we might be able to find them. [00:19:07] Speaker 04: You might get closer, but they're not there. [00:19:09] Speaker 01: Yeah. [00:19:09] Speaker 01: And the district court said these plaintiffs didn't allege facts that are concrete harm. [00:19:13] Speaker 01: I mean, I'm just saying, here's some things they didn't allege. [00:19:15] Speaker 01: Here's some other things they didn't allege. [00:19:18] Speaker 01: There's other things that they could have alleged that could have hypothetically potentially been concrete harm. [00:19:23] Speaker 01: And until we have a plaintiff that actually suffers concrete harm, I mean, Alaska certainly hopes [00:19:28] Speaker 01: that no plaintiffs are going to suffer concrete harm that would give them standing to challenge this law because we think the law is set up reasonably so that it's not going to be harming people but at the point that somebody has concrete harm that hypothetical plaintiff might have standing but these plaintiffs don't so they're the wrong plaintiffs and it's not enough just to [00:19:46] Speaker 01: point out hypothetical potential constitutional problems with the statutory scheme, you have to show how that statutory scheme is actually causing you personally concrete harm, otherwise you're the wrong plaintiff to be bringing in that case. [00:19:59] Speaker 01: And these plaintiffs haven't alleged anything that could conceivably be concrete harm or risk of harm to their own interests. [00:20:08] Speaker 01: And it's not enough just that their money is involved. [00:20:11] Speaker 01: Like cases like Spokeo and Navajo Nations say it's not enough to have your concrete interest involved. [00:20:16] Speaker 01: You have to allege actual harm or risk of harm to those interests. [00:20:19] Speaker 01: And they haven't been deprived of anything that constitutes a property right or even a concrete interest under Alaska law. [00:20:28] Speaker 01: So the court should affirm based on lack of standing. [00:20:31] Speaker 01: Thank you. [00:20:35] Speaker 02: All right, Mr. Powell, we'll give you a full minute. [00:20:37] Speaker 00: Thank you, Your Honor. [00:20:38] Speaker 00: That's all I need. [00:20:40] Speaker 00: So I think, back to the standing question, the Kerry versus Pfeiffer case from the Supreme Court resolves all of that. [00:20:48] Speaker 00: What the court made clear there is the lack of monetary injury is not a barrier to standing to assert a due process claim. [00:20:57] Speaker 00: Kerry does that, and then this court went further in Vann versus LLR and said even a temporary loss of use of your property is sufficient to confer standing. [00:21:05] Speaker 00: That's an injury in Vann. [00:21:06] Speaker 04: But what about counsel's argument about property you don't even know exists? [00:21:11] Speaker 04: I guess I would be curious to know what are the specific allegations here that would bring it closer into the realm of feeling that deprivation. [00:21:21] Speaker 00: Well, I think the answer to that is it's my client's money. [00:21:25] Speaker 00: So they paid that money and they were due a refund. [00:21:30] Speaker 00: Whether they knew about the refund or not, again, shouldn't be the crux on which we hinge their standing to get that back. [00:21:39] Speaker 00: I think it still conflates private actor and state actor. [00:21:43] Speaker 00: There is a distinction. [00:21:45] Speaker 00: The state actor owes a duty that the private actor doesn't owe. [00:21:48] Speaker 00: And so yes, you can [00:21:50] Speaker 00: delegate some of those things, but this case, this court has made clear that you can't delegate the due process. [00:21:58] Speaker 02: Any other questions? [00:21:59] Speaker 02: All right, Mr. Paul, thank you very much. [00:22:01] Speaker 02: I think counsel in both of these cases, Garza was already submitted, now Mousseau is submitted.