The California Court of Appeal, First District, recently held that a qui tam plaintiff may pursue a California False Claims Act (CFCA) action predicated on a bank’s failure to report and deliver escheated property, even if the California State Controller does not provide appropriate notice to the bank under California Code of Civil Procedure Section 1576.

A copy of the opinion in JPMorgan Chase Bank, N.A. v. Super. Ct. is available at: Link to Opinion.

A qui tam plaintiff alleged that two banks violated the CFCA by failing to report and deliver millions of dollars owing on unclaimed cashier’s checks to the State of California as escheated property.

The trial court denied the banks’ motions to dismiss. The banks each filed petitions for writ of mandate in the First Appellate District challenging the trial court’s order.

As you may recall, “escheat” is the “vesting in the state of title to property the whereabouts of whose owner is unknown or whose owner is unknown or which a known owner has refused to accept, whether by judicial determination or by operation of law, subject to the right of claimants to appear and claim the escheated property or any portion thereof.” Calif. Code Civ. Proc., § 1300, subd. (c).)

California’s Unclaimed Property Law (UPL) regulates the escheatment of abandoned property to the State of California. (§ 1500 et seq.) The general rule in California, codified in section 1510, is that unclaimed intangible property escheats to California when the “last...

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