In O’Connor v Eubanks, an unclaimed property takings and due process case, the Sixth Circuit ruled that Michigan took custody (not title) of O’Connor’s unclaimed accounts under its Unclaimed Property Act and kept the interest those funds earned. The district court, following a Michigan Court of Appeals decision (Kemerer), treated the state as the owner of both the principal and the interest and found adequate process.
The panel held that under the Act’s text, Michigan common-law history, and the “interest follows principal” rule, the original owner retains ownership of both the principal and any interest generated while the property sits in state custody. Kemerer is an outlier the Michigan Supreme Court is unlikely to follow. The district court must therefore redo the due-process analysis from the correct ownership premise and, if the claims survive, reconsider class discovery.