Three cheers for the Shareholder Services Association and the Securities Transfer Association for taking the initiative here!
And three more cheers for well-known attorneys William Palmer and Lawrence Tribe for taking up the fight!
The joint Amicus Brief is in support of a petition for certiorari docketed with the U.S. Supreme Court on August 5, 2015 - filed by William Palmer, Esq., an expert and highly successful crusader for the property rights of so-called “lost shareholders” and Harvard Law School Professor Laurence Tribe in re: Taylor v. Yee, No. 15-169, concerning California’s Unclaimed Property Law and its application. Tribe is widely considered to be the preeminent Constitutional law professor in the world:
The Amicus Brief, submitted by the estimable Jennifer C. Borden, formerly the General Counsel of UPPR and now of Borden Consulting Group, LLC, is written in support of Petitioners Chris Lusby Taylor, et al., v. Betty Yee, individually and in her official capacity as State Controller of the State of California.
It asks the Supreme Court to “reverse the decision of the Ninth Circuit and provide clear standards to the states regarding (1) what constitutes constitutionally adequate notice before a state may seize and liquidate an owner’s property under the state’s unclaimed property laws and whether additional notice is required to be given to the securities owner after seizure and prior to liquidation of the securities, and (2) [and the most important issue by far, we say] what constitutes just compensation that must be paid to owners of escheated and liquidated property. At a minimum, the Ninth Circuit’s
judgment in this case should be GVR’d [remanded to the 9th Circuit] to address the Takings Clause, particularly in light of Horne” [v. US Department of Agriculture - a recent SCOTUS decision re: unconstitutional “takings.”]
The brief points out - as we too have been pointing out to readers regularly - that “states and their contract auditors rely upon ambiguous escheat statutes or disingenuous interpretations…and demand shares to be turned over… even when the shareholders are not lost and they have not abandoned their shares [based on] a vague failure of the owner” to generate “activity” in their account…even where no activity is warranted. As the brief also points out, “The privilege of ownership includes the right to do nothing with the shares.”
It notes that “disenfranchised holders frequently are forced to file costly litigation naming the issuer, its transfer agent, and the state as defendants” - which, as the OPTIMIZER has been pointing out for years, is always a losing proposition for issuers. The brief makes a clear case, we think, that “The actions of California and other states which choose to liquidate securities [and then pay over only the proceeds of sale when owners come forward] result in impermissible takings without just compensation”…citing the recent Horne decision, and US v. Miller (1943) which defined “just compensation” as “the full and perfect equivalent in money or property taken. The owner is put in as good position pecuniarily as he would have occupied if his property had not been taken.”
Let’s hope the Supreme Court takes this case, which we will know in November - or at a minimum, remands it to the 9th Circuit for reconsideration.
Meanwhile, since issuers are still ultimately responsible – and still have a fiduciary duty to “do right” by its shareholders, please bone up on our many articles about abandoned property - and what smart issuers should be doing to minimize their very significant liabilities when states seize and liquidate shares without just compensation to the owners, as they have been doing at ever-increasing rates.
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