Can States Claim It as Unclaimed Property?
This article analyzes the potential application of state unclaimed property laws to unclaimed settlement proceeds in a state or federal court class action. This article concludes that, in a federal court class action, federal law rather than state law should apply to the disposition of unclaimed settlement proceeds under Federal Rule of Civil Procedure 23, the Erie doctrine, and other authorities. Thus, since federal law grants the district court broad discretion to approve settlements and determine the manner of disposing of unclaimed settlement proceeds, the court is not bound by state unclaimed property laws which may otherwise require those proceeds to be remitted to the state. However, even in the state court context, we point out that state unclaimed property laws vary widely, and many states exempt from escheat obligations, such as unclaimed class action proceeds, that are not incurred in the ordinary course of business. We also argue that no state should be entitled to claim am
