MN Supreme Court says state does enough to reunite people with their abandoned money

The Minnesota Supreme Court has put a stop to a lawsuit against Minnesota’s system for handling money that is abandoned.

In their lawsuit, four people allege the Department of Commerce doesn’t do enough to unite people with their unclaimed money, and that the state doesn’t pay interest on the money it keeps that is later returned to owners. Under the state’s law, only the principal has to be returned once the money’s owner is found.

Timothy Hall, one of the people filing the class action suit, learned that under $100 a former employer was holding for him, was lost to the state after four years. Mary Wingfield failed to respond to a bank’s request to contact it regarding the account, and the $138,000 was sent to the state, which eventually found Wingfield and returned the money, but not any interest.

The amount of unclaimed money has increased in recent years — $750 million in 2016, for example — as banks have been more diligent in filing reports of money that’s missing its owners. And more recent legislation changed the number of years that must elapse before money and accounts are declared “dormant” from 20 to three. Wages can be forfeited after just one year.

Any abandoned property is required to be sold with the proceeds going to the state’s general revenue fund.

That violates due process under the Fifth Amendment, the suit claimed. The state said it doesn’t “because it is the owner’s inaction—not State action—that caused the holder to turn the unclaimed property over to the state.”

More than a year ago, the Minnesota Court of Appeals quashed the suit, ruling the state hadn’t taken the money; the owners had abandoned it.

Writing for the majority today (See opinion), Minnesota Supreme Court chief justice Lorie Gildea mostly upheld the Court of Appeals, and rejected the argument that Minnesota should pay interest on money it gets from abandoned accounts.

“To require that the state pay interest to these owners of unclaimed property would reward their inattention and provide an inappropriate windfall,” she said.

But she said Wingfield is a different story because her money was in an interest-bearing account.

“The right to earn interest was part of Wingfield’s unclaimed property, and she therefore has the right to receive that interest from the State if she is to be made whole. In other words, Wingfield, unlike Hall, Undlin, and Herron, has suffered an actual loss of interest that she reasonably expected her principal to earn,” Justice Gildea said.

Wingfield’s situation, however, opened the door for the court to examine whether Minnesota’s plan for reuniting people with their abandoned money — basically, the website — is robust enough.

Gildea closed the door quickly, saying the fact the state has a law that outlines what happens when money is abandoned is sufficient notice to people about what will happen if they don’t tend to their money.

The process to claim the property through the site is simple; it requires that the owner fill out a form on the website and the State then contacts the owner to validate identity and return the property. The Commissioner also engages in other forms of public outreach including events at the Mall of America and State Fair, sends email alerts to lawmakers, and uses a database to find owners due unusually large sums. We conclude that the numerous types of notice provided by statute including publication, mailed notice by the holder, the ability to inspect public records, and the general notice provided by the statute itself, combine to provide sufficient notice to satisfy the requirements of due process.

The court sent the case back to the District Court to pave the way for Wingfield to get her interest.