Ohio SC: State can't keep interest on unclaimed assets
COLUMBUS, Ohio (Legal Newsline)-Ohio could owe unclaimed property owners millions in interest payments because of a Supreme Court decision that said the state cannot make money off unclaimed assets that are later claimed.
In 1991, state lawmakers said that interest on unclaimed funds, such as state tax refunds, is not collectible by claimants. The Legislature also at the time levied a 5 percent administrative fee on the funds.
The state's high court said in its unanimous ruling Wednesday that the law is unconstitutional because it "strikes at the core of the concept of private property."
Justice Paul Pfeifer, writing for the court, called the law "breathtakingly bold."
He wrote, "At a stroke, the General Assembly severed the link between the owner of an asset and the income produced by that asset."
The court's seven justices set a retroactive four-year limit from the date of discovery for payment of unpaid interest.
In addition to unclaimed state checks, unclaimed property funds also come from dormant checking and savings accounts, undelivered stock certificates and forgotten utility deposits. The Ohio Department of Commerce says the Division of Unclaimed Funds has about 4.5 million open accounts valued at roughly $1.2 billion.
The court's ruling is in response to a class action lawsuit that claimed the government should not make money off of presumably lost property or assets.
In 2007, the Columbus-based 10th District Court of Appeals overturned a Franklin County trial court decision that sided with plaintiffs.
The case was brought in 2004 by William Sogg, who objected to the state's failure to give to him the interest earned on unclaimed funds it had held on behalf of his deceased mother.
From Legal Newsline: Reach staff reporter Chris Rizo at email@example.com.