Not all government takings of private property proceed by condemnation or regulation (or taxation).  In February the U.S. Supreme Court denied certiorari in Taylor et al. v. Yee, a case challenging California’s practice of seizing unclaimed property after only three years of idleness with relatively minimal efforts to contact owners. Unclaimed property can consist of such things as “forgotten security deposits, uncashed money orders, unused insurance benefits, idle shares of stock, and even the undisturbed contents of safedeposit boxes,” for starters, to quote the Court. In a concurrence, Justice Samuel Alito joined by Justice Clarence Thomas agreed with the majority in denying review, saying the “convoluted history” of the California dispute made it a poor candidate for a clean review under constitutional principles. But the trend among self-interested states in unclaimed-property, or escheat, law – such as truncating dormancy periods to a mere three years, from as long as 15, while “doing less and less to meet their constitutional obligation to provide adequate notice” to owners – inevitably raises constitutional questions, because the Due Process Clause “undoubtedly requires that, before seizing private property, the government must give ‘notice and opportunity for hearing appropriate to the nature of the case.’” In revamping escheat practices in ways that grab more money for their budgets, states might well be overstepping this bound.

Another part of the picture, while not mentioned in Alito’s brief opinion, adds practical importance: states have creatively expanded their definitions of what they consider abandoned property, to include such things as unused minutes on calling cards (for which they seek a cash equivalent from the phone company) and gift certificates (make the retailer pay). Three years ago I wrote a post at Overlawyered titled “Delaware: Your Escheating Heart.” Excerpt: 

…The revenue [from these laws] looms peculiarly large for the state of Delaware, because it is the state of incorporation for so many businesses. In recent years friction has been growing between the state and its corporate citizens as the state government has taken an increasingly aggressive stance in auditing corporations for unreported escheatable property. [WSJ] So far, perhaps, so routine (except for the parties to the dispute), but some accounts omit one of the most salient angles, summed up by one critic [Douglas Lindholm, IBD via Volokh] as follows:

“Last year alone, Delaware seized $319.5 million from liquidated property while returning only $18.9 million of unclaimed property to its rightful owners.

“Delaware does this through an unfair, onerous and expensive audit system that ‘looks back’ to 1981, and contrives unclaimed property if the company doesn’t have records for all those years. This process often costs companies millions of dollars, mires them in years of audits, and forces them to deal with third-party auditors who are motivated by contingent fees to invent unclaimed property where none exists….”

Again and again – whether in forfeiture laws entitling law enforcers to a share of the booty seized, or percentage awards for informants under whistleblower laws, or traffic camera systems in which the operators of the cameras get a share of ticket revenue, contingency fees for participants in law enforcement prove deeply problematic. … Delaware seems to have gotten its image in trouble through a variant on tax farming.

As for the argument that if you didn’t want to have your pockets rifled by a given state, you shouldn’t have done business there, it’s not really any stronger than the argument that if you didn’t want to have your property seized for private use at a big knock-off from fair value, you shouldn’t have done business in a state with poor eminent domain laws.