Ninth Circuit Holds 11 Amendment Does Not Shield State from Class Action Seeking Return of Unconstitutionally Seized Property

BNA’s Class Action Litigation (Volume 07 Number 06, Fri., Mar. 24, 2006, Page 1, ISSN 1529-8000) is reporting on Suever v. Connell--- F.3d ----, 2006 WL 618869 (9th Cir. Mar. 14, 2006):

The 11th Amendment does not shield the California controller from a class action by persons seeking return of property that was unconstitutionally seized under the state's escheat scheme. . . .

The Circuit Court stated:

The Eleventh Amendment does not bar the class's claims insofar as the claims request the return of the class's property. This court in Taylor held that the Eleventh Amendment did not apply to funds that had been escheated, but not permanently escheated, because the State held such funds in custodial trust for the benefit of property owners-the funds were not State funds. Id. at 931 (“Before California escheated property is ‘permanently’ escheated, it is like a car that is towed and held in an impound lot. The car is in the custody of the impounding government, but it is held for its owner, if one turns up.”). Claims requesting the return of individuals' property are less likely to offend a state's sovereign immunity than claims requesting the payment of government funds. See id. at 932-35. Hence, although the Eleventh Amendment ordinarily bars claims primarily requesting funds held in the State's coffers, sovereign immunity does not apply to claims alleging such funds are individuals' property that the State improperly seized through ultra vires or unconstitutional acts.

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