Eleventh Circuit Holds State Custody of Unclaimed Property May Constitute a Per Se Fifth Amendment Taking

Introduction

In Alieda Maron v. Chief Financial Officer of Florida (No. 23-13178, 11th Cir. May 16, 2025), the United States Court of Appeals for the Eleventh Circuit addressed whether Florida’s Disposition of Unclaimed Property Act (the “Act”), by taking custody of private intangible property and investing it for state uses, effectuates a Fifth Amendment “taking” without just compensation. Plaintiffs‐appellants Alieda and Lawrence Maron, small unclaimed‐property owners seeking only $26.24 plus accrued interest, challenged the Act as unconstitutional under the Takings Clause. The State of Florida moved to dismiss for lack of standing, ripeness, and sovereign immunity, and on the merits argued no taking occurred because Florida could have escheated the property outright. The district court granted dismissal. On appeal, a three‐judge panel reversed in part, holding (1) the Marons have jurisdictional standing, (2) the claim is ripe and not barred by sovereign immunity, and (3) the takings claim may proceed because vesting custody (even without title transfer) can be a per se taking requiring just compensation for earnings accrued while in state hands.

Summary of the Judgment

The Eleventh Circuit unanimously vacated and remanded the district court’s dismissal. Key holdings:

Jurisdiction: The Marons satisfied Fifth Amendment standing (injury in fact, traceability, redressability), their claim is ripe without exhausting administrative claims, and sovereign immunity does not bar a prospective equitable Takings‐Clause claim under Ex parte Young.
Merits (Per Se Taking?): Because the Act vests Florida with “custody and responsibility” for unclaimed property—and Florida directly invests and uses it—the complaint states a per se taking. The State’s escheatment analogies (e.g., Texaco v. Short) cannot override the text of the Act, which does not transfer title automatically. A taking occurs even if title remains with the owner, and the Takings Clause requires just compensation for value (including post‐custody earnings).
Remand Instructions: Proceed to develop factual record on (a) whether the Marons’ refund remained their property or was constitutionally “abandoned,” (b) the nature of Florida’s appropriation of custody, and (c) the appropriate measure of just compensation under the Fifth Amendment.

Analysis

1. Precedents Cited

Knick v. Township of Scott (588 U.S. 180, 2019): Abolished requirement to exhaust state remedies before bringing federal Takings‐Clause claims; injury occurs at the moment of taking.
Texaco, Inc. v. Short (454 U.S. 516, 1982): Upheld state escheatment of unused mineral interests after statutory period, transferring title as abandoned property; distinguished because Florida’s Act does not transfer title.
Horne v. Department of Agriculture (576 U.S. 350, 2015): Physical appropriation of raisins constituted a per se taking even though direct production quotas might have similar economic effect—“means as well as ends” matter.
Ex parte Young (209 U.S. 123, 1908): Established sovereign‐immunity exception for suits seeking prospective injunctions against ongoing federal‐law violations by state officials.
Edelman v. Jordan (415 U.S. 651, 1974): Held that orders requiring retroactive monetary relief from the state are barred by sovereign immunity; distinguished because the Marons seek prospective relief to ensure future compensation, not retrospective damages for past wrongful denials.
Baughcum v. Jackson (11th Cir. 2024): Ripeness does not require futile administrative exhaustion when a statute’s terms make denial preordained.

2. Legal Reasoning

The court’s analysis proceeded in two phases:

Jurisdictional Thresholds
- Standing: The Marons alleged an actual taking—Florida’s assumption of custody deprived them of present use and any earnings on their refund. This injury is concrete, particularized, traceable to the Act, and redressable by a declaration and injunction compelling just compensation.
- Ripeness: No need to file and be denied under Florida’s administrative claims process, since the Act unequivocally precludes post‐custody earnings. Delaying review would unduly harm owners whose small claims may never be vigorously pursued administratively.
- Sovereign Immunity: The Marons sue the Chief Financial Officer in his official capacity for prospective relief under the Takings Clause. Under Ex parte Young, equitable relief to stop ongoing constitutional violations is permitted.
Merits of the Per Se Taking Claim
- Under Horne, a per se taking occurs when the government directly appropriates private property for its own use; here, Florida invests unclaimed refunds and spends the earnings in public-school funds.
- The Act vests “custody and responsibility” for unclaimed intangible property, sells or converts it into money, deposits proceeds in a trust fund, and—in excess of a modest cap—transfers interest to the State School Fund. Title remains nominally with the owner, but the State’s use is direct and exclusive.
- Texaco does not authorize courts to rewrite the Act into an escheat statute; and even an escheatment statute must satisfy due‐process notice and hearing requirements to extinguish title. The absence of those procedural safeguards here suggests a compensable taking rather than a lawful total escheat.
- If a taking is found, just compensation must include the full fair market value of what was taken—that is, the refunded principal plus the earnings accruing while in state hands. Florida’s statutory scheme expressly denies owners any interest earned post‐liquidation, contravening the Fifth Amendment’s compensation guarantee.

3. Impact on Future Cases and on Unclaimed Property Law

This decision signals to state legislatures and administrators that unclaimed‐property regimes which vest states with active custody and deployment of private assets may trigger Fifth Amendment obligations. Key implications include:

States must reexamine unclaimed‐property statutes to determine whether they (a) transfer title with adequate due‐process protections or (b) merely vest custody, in which case Takings‐Clause compensation may be required for all accrued earnings.
Small‐claim holders now have a pathway to federal court without tedious administrative exhaustions if a statute’s terms foreclose recovery of post‐custody earnings.
Future litigation may clarify valuation methodologies and the line between per se takings (direct appropriations) and regulatory takings (use restrictions).

Complex Concepts Simplified

Takings Clause: The Fifth Amendment provision requiring the government to pay “just compensation” when it takes private property for public use.
Standing: A federal‐court requirement that a plaintiff show a concrete, traceable injury that a court decision can redress.
Ripeness: Prevents courts from adjudicating claims before the facts and legal stakes are firmly established.
Sovereign Immunity & Ex parte Young: States are generally immune from suit in federal court, but Ex parte Young allows prospective injunctive relief against state officials violating federal law.
Per Se Taking: A physical appropriation of property by the government, automatically requiring just compensation, as opposed to a regulatory taking, which depends on economic impact tests.
Escheatment: A state’s statutory power to claim title to abandoned property, conditioned on notice and process before vesting absolute ownership.

Conclusion

Alieda Maron v. CFO of Florida marks a significant development in eminent‐domain jurisprudence: a state’s active assumption of custody over unclaimed intangible property—and the use of proceeds—can constitute a per se taking under the Fifth Amendment. The Eleventh Circuit’s careful carve‐out of jurisdictional hurdles (standing, ripeness, sovereign immunity) paves the way for substantive adjudication of whether owners must receive interest earned on their assets while in state custody. Going forward, states will need to reconcile their unclaimed‐property frameworks with federal takings‐compensation requirements or risk similar challenges nationwide.