Mousseau et al v. Crum et al

3:23-cv-00075AkdMar 4, 2024

Full text

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
ANDREW MOUSSEAU and
RANDALL WOLFFE, individually
and on behalf of all persons similarly
situated,
Plaintiffs,
v.
ADAM CRUM, in his official capacity
as ALASKA COMMISSIONER OF
REVENUE, and NIC DEHART, in
his official capacity as UNCLAIMED
PROPERTY MANAGER, ALASKA
DEPARTMENT OF REVENUE,
TREASURY DIVISION,
Defendants.
Case No. 3:23-cv-00075-SLG
ORDER REGARDING MOTION TO DISMISS
Before the Court is a Motion to Dismiss at Docket 18 filed by Defendants
Adam Crum and Nic Dehart who have been sued in their official capacity based
on their work with the Alaska Department of Revenue (“DOR”). Plaintiffs Andrew
Mousseau and Randall Wolffe opposed the motion at Docket 24. 	Defendants
replied at Docket 27. 	Oral argument was not requested and was not necessary
to the Court’s determination.
BACKGROUND
Plaintiffs filed this lawsuit on behalf of themselves and a putative class to
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challenge 	the 	Alaska 	Uniform 	Unclaimed 	Property 	Act 	(“AUUPA”)1 	after
discovering that the State of Alaska (the “State”), through the DOR, had taken
possession 	of 	monetary 	refunds 	issued 	to 	Plaintiffs 	and 	held 	by 	third-party
entities but left unclaimed for several years. 	The AUUPA establishes a system
by which the State may take custody—but not ownership—of unclaimed property
being held by an entity or person other than the rightful owner after complying
with the statute's procedural requirements.2 	The State then holds the property in
trust for the benefit of the rightful owner, who can use the procedures set forth in
the statute to claim the property at any time.3 	The AUUPA is based on the
Uniform Unclaimed Property Act promulgated by the Uniform Law Commission.4
At least 38 states have enacted a version of the uniform law, and all 50 states
have some unclaimed property law in place.5
Plaintiffs do not dispute that the State may take custody of unclaimed
1 AS §§ 34.45.110 – .780.
2 AS §§ 34.45.280 – .330.
3 AS §§ 34.45.330, .380.
4 See AS § 34.45.740 (“[The provisions of this statute] shall be applied and construed so as to
effectuate their general purpose to make uniform the law with respect to unclaimed property
among states enacting the Uniform Unclaimed Property Act.”).
5 See Prefatory Note to Revised Uniform Unclaimed Property Act (2016) at ¶ 2, nn.1-3; N.J.
Retail Merchs. Ass’n v. Sidamon-Eristoff, 669 F.3d 374, 383 (3d Cir. 2012) (noting that “[a]ll fifty
states, and the District of Columbia, have a set of unclaimed property laws”).
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property.6 	Rather, Plaintiffs assert that the process through which the State
gains custody of that unclaimed property is unconstitutional, depriving them, and
others like them, of their property without just compensation and adequate due
process.7 They seek a declaration that Defendants’ enforcement of the AUUPA
constitutes a taking because private property is transferred to and used by the
State without an attempt to reunite that property with its owners and that the
AUUPA is unconstitutional on its face because it fails to provide adequate notice
to property owners about the transfer of their property into the custody of the
State.8 	They 	also 	bring 	§ 	1983 	claims 	against 	Defendants 	asserting 	that
pursuant to the AUUPA, Defendants “deprive, and continue to deprive, Plaintiffs
and potential class members of their constitutionally protected property interest
by 	seizing, 	and 	sometimes 	selling, 	property 	of 	Plaintiffs 	and 	putative 	class
members 	without 	providing 	prior 	notice 	. 	. 	. 	[and] 	without 	adequate 	post-
deprivation notice, as required by the United States Constitution”9 and that under
the AUUPA “Defendants have . . . unlawfully taken control of and converted to
6 See Texaco, Inc. v. Short, 454 U.S. 516, 526 (1982) (“From an early time, this Court has
recognized that States have the power to permit unused or abandoned interests in property to
revert to another after the passage of time.”); Anderson Nat’l Bank v. Luckett, 321 U.S. 233, 241
(1944) (noting that “it is within the constitutional power of the state to protect the interests of
depositors from the risks which attend long neglected accounts, by taking them into custody
when they have been inactive so long as to be presumptively abandoned”).
7 Doc. 24 at p. 3 (“To be clear, Plaintiffs are not challenging the notion of unclaimed property
laws; instead, they seek a system that works.”).
8 Doc.1 at ¶ 78.
9 Doc. 1 at ¶¶ 83, 90.
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public use the private property of Plaintiffs and putative class members without
providing just compensation or providing the notice required by Constitutional
Due Process.”10 	They seek a return of their property, an injunction prohibiting
Defendants from enforcing the AUUPA, and an accounting of property held by
the State.
Defendants 	request 	that 	Plaintiffs’ 	complaint 	be 	dismissed 	on 	two
alternative bases. 	First, they seek dismissal pursuant to Rule 12(b)(1) of the
Federal Rules of Civil Procedure, arguing that the Court lacks subject matter
jurisdiction 	because 	Plaintiffs 	lack 	standing. 	Alternatively, 	Defendants 	seek
dismissal pursuant to Rule 12(b)(6) for failure to state a plausible constitutional
claim.
LEGAL STANDARDS
A party challenging a district court’s subject matter jurisdiction does so
pursuant to Federal Rule of Civil Procedure 12(b)(1). “Rule 12(b)(1) jurisdictional
attacks can be either facial or factual.”11 	In a facial attack, the defendant asserts
that the allegations in the complaint, while assumed to be true, are nonetheless
“insufficient on their face to invoke federal jurisdiction.” 12 	In a factual attack, the
10 Id. at ¶ 96.
11 White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000).
12 Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004).
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defendant 	“disputes 	the 	truth 	of 	the 	allegations 	that, 	by 	themselves, 	would
otherwise invoke federal jurisdiction.”13 	No presumption of truth attaches to the
allegations, 	and 	a 	court 	may 	review 	extrinsic 	evidence 	to 	evaluate 	the
jurisdictional issues.14
Under Rule 12(b)(6), the allegations in the complaint are accepted as true
and construed in the light most favorable to the plaintiff.15 	To survive under Rule
12(b)(6), the “complaint must contain sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.’”16 	Dismissal is warranted
where the plaintiff fails to present a cognizable legal theory or fails to allege facts
sufficient to support a cognizable legal theory.17
DISCUSSION
I. 	The Alaska Uniform Unclaimed Property Act
The AUUPA provides a system for the reporting, collection, maintenance,
and use of abandoned property. Property that can be deemed abandoned under
the statute includes any intangible amount owed or held by a third-party—
13 Id.
14 Id.; Kingman Reef Atoll Invs., L.L.C. v. United States, 541 F.3d 1189, 1195 (9th Cir. 2008).
15 Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010).
16 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)).
17 Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
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referred to in the statute as the “holder”18 — that remains unpaid, uncashed, or
otherwise showing no owner interaction.19 It also includes tangible items such as
the contents of safe deposit boxes.20 Property is generally presumed abandoned
after three years from the time it has become payable or distributable without any
evidence of owner activity.21 	In certain instances, however, the abandonment
period is as much as five years22 or as little as one year.23 Every year, the holder
of property presumed abandoned under the statute must report and deliver that
property to the State.24 	Prior to doing so, the holder must send written notices to
the last known addresses of the apparent owners of presumably abandoned
property valued over $100, advising them that it is in possession of property
owed to them.25 	Any unclaimed property must thereafter be delivered to the
State, along with the last known address of each person appearing to be the
18 AS § 34.45.760(9).
19 See generally AS §§ 34.45.110 – .260.
20 AS § 34.45.260.
21 AS § 34.45.110.
22 AS § 34.45.200 (providing a five-year abandonment period for stock and other intangible
interests in business associations).
23 AS § 34.45.210 (providing for a one-year period of abandonment for intangible property
distributable in the course of a dissolution of a business association); 	AS § 34.45.230
(providing for a one-year abandonment period for intangible property held for an owner by a
public agency); AS § 34.45.250 (providing for a one-year abandonment period for unpaid
wages).
24 AS § 34.45.280, 320(a).
25 AS § 34.45.280(e).
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owner.26 	Property transferred to the State must include “all interest, dividends,
increments, and accretions due, payable, or distributable on the property at the
time of filing the report.”27
Once the State receives the unclaimed property, it “assumes custody and
responsibility for the safekeeping of the property.”28 The property delivered to the
State by holders remains, in perpetuity, the owners’ property. 	Owners can claim
their property from the State at any time without paying a fee.29 	Additionally, if
the property “was interest-bearing to the owner on the date of surrender [to the
State] by the holder” it will continue to accrue interest that is payable to the owner
until claimed by the owner or ten years have elapsed, whichever is shorter. 30
The State deposits most intangible amounts into the State’s general fund. 31
The AUUPA provides a method by which rightful owners can claim their property,
and the State maintains a separate, limited trust fund from which it pays out
allowed claims.32 	The statute requires the State, acting through the DOR, to
notify apparent owners that it has possession of unclaimed property but it gives
26 AS §§ 34.45.280, .320(a).
27 AS § 34.45.320(a).
28 AS § 34.45.330(a).
29 AS § 34.45.380.
30 AS § 34.45.380(d).
31 AS § 34.45.370(a).
32 AS § 34.45.380, .370.
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the DOR the discretion to determine “the most cost-effective method available
within its appropriations” for such notification.33 	At a minimum, the DOR must
maintain a searchable website listing the unclaimed property in its custody along
with the names of the apparent owners of such property.34
It is through this website that Plaintiffs discovered the State possessed
their money. 	Plaintiff Wolffe asserts he has over $100 held by the State, which
originated from an account he had with USAA.35 	Plaintiff Mousseau asserts he
has 	between 	$25-$50 	held 	by 	the 	State, 	which 	originated 	from 	a 	lease
agreement he had with Weidner Property Management. 36
II. 	Standing
Defendants argue that Plaintiffs cannot establish their standing, which is a
requirement for this Court’s jurisdiction. They rest their standing argument on the
fact that Plaintiffs could readily reclaim their intangible property, which would
include 	any 	accrued 	interest 	earned 	on 	that 	property 	at 	the 	time 	it 	was
transferred into State custody, and hence they have not suffered any redressable
injury.
33 AS § 34.45.310(a).
34 AS § 34.45.310(b).
35 Doc. 1 at ¶¶ 16-18.
36 Doc. 1 at ¶¶ 11-13.
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Article III of the Constitution provides federal courts the jurisdiction to
consider only “Cases” and “Controversies.”37 	“[S]tanding is an essential and
unchanging part of the case-or-controversy requirement.”38 	It “ensures that a
plaintiff has a sufficient personal stake in a dispute to ensure the existence of a
live case or controversy which renders judicial resolution appropriate.”39 	In order
to have standing, a plaintiff must show (1) he has suffered an “injury-in-fact”—an
injury that is concrete and particularized and actual or imminent, not conjectural;
(2) the injury is traceable to the challenged action of the defendant; and (3) the
injury is likely to be redressed by a favorable decision.40 	A plaintiff bears the
burden of establishing standing.41 	Moreover, in a class action, the named
plaintiff is required to allege and show that he has been personally injured, “not
that injury has been suffered by other, unidentified members of the class to which
they belong.”42
Plaintiffs allege they were injured when their intangible cash assets were
transferred to the State and placed in its general fund for public use without
37 U.S. Const. art. III, § 2, cl.1.
38 Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992).
39 Tandy v. City of Wichita, 380 F.3d 1277, 1283 (10th Cir. 2004).
40 Lujan, 504 U.S. at 560-61; Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528
U.S. 167, 180-81 (2000).
41 Lujan, 504 U.S. at 561.
42 Spokeo, Inc. v. Robins, 578 U.S. 330, 338 n. 6 (2016).
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notice from the State or any attempt at payment. 	Defendants argue that, even
presuming Plaintiffs are in fact the owners of the property being held by the State
as alleged in their complaint, no concrete injury is present here. 43 For an injury to
be concrete, it must “actually exist.”44 	A plaintiff must adequately allege that he
has suffered a real and actual harm to a legally protected interest.45 	“The most
obvious [concrete injuries] are traditional tangible harms, such as physical harms
and monetary harms.”46 	Intangible harms, such as those affecting a person’s
reputation or privacy, can also satisfy the concreteness inquiry.47 	These harms
can also include “those specified by the Constitution itself.”48
There is no such allegation of concrete harm here. 	Despite the fact that
the possessor of Plaintiffs’ money has changed, Plaintiffs have not experienced a
monetary loss or a constitutional harm to a protected property interest. 	Under
the AUUPA, property transferred from the holder to the State is not conclusively
deemed abandoned; rather, it is only presumed to be. 	The owner retains the
ability to rebut that presumption and have it returned to him at any time. 	The
43 Doc. 27 at pp. 3-4.
44 Spokeo, 578 U.S. at 340.
45 Id. at 339.
46 TransUnion LLC v. Ramierz, 594 U.S. 413, 425 (2021).
47 Id.
48 Id.
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State, in possessing the presumably unclaimed property, is substituting itself as
the holder of the property, not the owner. Therefore, Plaintiffs’ ownership has not
been disturbed.
While enforcement of the AUUPA could result in an alleged injury to a
person’s property in certain circumstances — for example, in the event of a
wrongly rejected claim for return of property, failure to pay interest owed under
the statute, or the State’s liquidation of securities or other property in its custody
— 	Plaintiffs 	have 	not 	alleged 	such 	individualized 	harm. 	Indeed, 	any 	such
allegation made by Plaintiffs here would be speculative and unripe; Plaintiffs
have not yet filed a claim with the DOR for return of their property, and therefore
the State has not made any determination that could constitute a deprivation or
diminishment of that property. 49
Plaintiffs cite Taylor v. Westly (“Taylor II”) 50 for the proposition that a
property owner demonstrates a concrete injury whenever the State “disturbs” a
person’s property and thus the mere transfer of their property to the State without
attempt at payment or prior notice is sufficient “injury-in-fact” to support their
49 “Standing and ripeness under Article III are closely related.” Colwell v. Dep’t of Health &
Human Servs., 558 F.3d 1112,1123 (9th Cir. 2009). 	A ripeness inquiry generally “coincides
squarely with standing’s injury in fact prong.” Sacks v. Office of Foreign Assets Control, 466 F.3d
764, 773 (9th Cir. 2006) (quoting Thomas v. Anchorage Equal Rights Comm’n, 220 F.3d 1134,
1138 (9th Cir. 2000) (en banc)).
50 488 F.3d 1197 (9th Cir. 2007) (“Taylor II”).
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constitutional claims. 51 	Taylor II involved a challenge to California’s unclaimed
property law. 	Like the AUUPA, California’s statute provided for a system in
which property presumed abandoned after a few years of inactivity is transferred
to the state for safeguarding.52 The plaintiffs in that case had each owned shares
of company stock based on their employment and pension programs with those
companies.53 	The plaintiffs were fully aware of their investments and did not
intend to abandon them.54 	Their stocks were nonetheless presumed abandoned
under the statute because three years had passed without any record of them
cashing 	dividend 	checks, 	responding 	to 	proxy 	notices, 	or 	otherwise
communicating with the companies.55 	Under California’s law, the transfer of the
stock to the state triggered an immediate sale of the stock by the state.56 	The
51 Their reliance on the word “disturb” is taken from a portion of the Ninth Circuit’s opinion
addressing the issue of injunctive relief where the court said that due process requires the
government to provide reasonable notice “[b]efore the government may disturb a person’s
ownership of his property.” Id. at 1201 (emphasis added).
52 See Taylor v. Westly, 402 F.3d 924, 930-31 (9th Cir. 2005) (“Taylor I”). 	Taylor I was the first
Ninth Circuit decision related to California’s unclaimed property statute. 	In Taylor I, the Ninth
Circuit concluded that the Eleventh Amendment did not bar the plaintiffs from seeking to recover
the value of their stock from the state, “because the funds they seek are held by the state as
custodian in trust for them rather than as the state’s own funds . . . .”
53 Taylor I, 402 F.3d at 927.
54 Id.
55 Id. at 926-27.
56 California’s unclaimed property statute required the state, through its Controller, to sell stocks
in its possession within two years on an established exchange at prevailing prices. 	Taylor v.
Westly, Case no. CIV-S-01-2407-WBS-GGH, 2005 WL 5480286, at *1 (E.D. Cal. Aug. 16,
2005). 	It was established that the Controller had a policy of selling stocks immediately upon
transfer. Taylor II, 488 F.3d at 1200.
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stock owners retained the right to claim the net proceeds from the sale of the
stock from the state, but the plaintiffs alleged that the premature sale deprived
them of any future value of their stock. 	Indeed, one of the plaintiffs alleged that
he had missed out on subsequent stock splits and appreciation that cost him
millions of dollars and another plaintiff alleged her stock had lost all value
because California determined her shares were “permanently misplaced and
unpayable.”57 	Given these facts, on appeal of the district court’s order denying a
preliminary injunction, the Ninth Circuit reversed and held that the plaintiffs had
standing because “[the] plaintiffs’ securities have been lost to escheat, thus
establishing concrete injury.”58
Taylor 	II 	is 	distinguishable 	from 	the 	situation 	here. 	The 	sale 	of 	the
plaintiffs’ 	stock 	in 	Taylor 	II 	created 	sufficient 	concrete 	harm 	to 	support 	the
plaintiffs’ standing. 	The Ninth Circuit relied on the fact that the plaintiffs had
suffered a permanent loss of property and found that recurrence was likely under
the statute unless the plaintiffs made costly and timely efforts to keep such
assets active. 	The Court further noted that even with such extra efforts, the
permanent loss of stocks was likely to reoccur due to California’s policy of
57 Taylor I, 402 F.3d at 929, 936.
58 Taylor II, 488 F.3d at 1199.
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immediately selling stock upon transfer to the state.59 	These facts are not
present here. 	The only property disturbance at issue here is a change in the
custody of Plaintiffs’ property, not its value or ownership. The Ninth Circuit did not
hold in Taylor II that the mere change in the custodian of cash assets, without
more, is a sufficient “injury-in-fact” to confer standing.
Plaintiffs assert that pursuant to Knick v. Township of Scott they do not
need to file a claim for a return of their property and wait for some concrete
deprivation to occur before raising a takings challenge.60 	Again, however, a
takings challenge arises when the government takes property for public use
without paying for it. 	Here, the State has not taken Plaintiffs’ property in the
same manner. Under the AUUPA, while the State can use funds transferred to it
for public purposes, it is nonetheless required to keep funds available to pay out
any verified claims on property transferred to it. 	The State does not take
ownership of the property or diminish its value by only taking custody of it. 	As
noted by the State in its briefing, the application of the AUUPA is therefore
“fundamentally different from a property owner, as was the case in Knick, being
forced to make the grounds around her home open to the public during daylight
59 Id. at 1199-200.
60 Knick v. Twp. of Scott, 139 S.Ct. 2162, 2170-71 (2019) (“The fact that the State has provided
a property owner with a procedure that may subsequently result in just compensation cannot
deprive the owner of his [takings claim].”).
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hours.”61
Plaintiffs also argue that it “defies common sense” to deny them standing
because 	such 	a 	decision 	“immunizes 	the 	[AUUPA] 	from 	constitutional
challenges.” 62 	They want to challenge not just the transfer of custody to the
State, but also the statute’s notice requirements; they assert that they will never
be able to do so unless the lack of direct notice from the State at the time of the
transfer in and of itself is deemed a sufficient injury. The Court disagrees. There
could be a situation where a plaintiff has standing to challenge the process
provided by the AUUPA, but that is simply not the case here where there has
been no deprivation of property associated with the statute’s allegedly deficient
process. 	As noted above, Plaintiffs’ complaint does not involve a denial of a
claim, the sale of securities, or the nonpayment of interest; it alleges only a
transfer of cash assets to the State without notice to Plaintiffs. Plaintiffs have not
alleged that this mere transfer of their assets from the holders to the State
caused any devaluation of those funds or diminishment of their ownership rights
that they could have defended against if given prior notice. 	Indeed, there is no
allegation that they even knew about the money owed to them before the State
took custody; consequently, the State, through its application of the AUUPA,
61 Doc. 27 at p. 4.
62 Doc. 24 at p. 11.
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facilitated Plaintiffs’ discovery of money that they were unaware of, lost, or forgot
about. 	There is simply no concrete harm alleged by Plaintiffs to generate the
requisite case or controversy needed for jurisdiction.
CONCLUSION
Based 	on 	the 	foregoing 	discussion, 	Defendants 	motion 	to 	dismiss 	at
Docket 18 is GRANTED.
DATED this 4th day of March 2024, at Anchorage, Alaska.
/s/ Sharon L. Gleason
UNITED STATES DISTRICT JUDGE
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