This blog was last updated on August 26, 2025

By Freda Pepper, General Counsel, Unclaimed Property

Sovos regulatory team is tracking a petition filed with the Supreme Court in Peters v. Cohen, a  case that raises fundamental questions about how state unclaimed property laws handle dormant assets and the constitutional protections owed to property owners. The petition presents issues that could affect millions of Americans and establish new precedents for state escheat laws across the country, potentially reshaping unclaimed property law nationwide.

Background: What Is Peters v. Cohen?

ThePeters v. Cohen case centers on a German citizen whose Amazon stock was seized by California’s unclaimed property program under questionable circumstances. The petition challenges the constitutionality of current state unclaimed property laws and could establish important precedents for unclaimed property compliance requirements if accepted and ruled upon by the Supreme Court. The petition was filed in June 2025 and is pending before the Supreme Court, which typically decides whether to grant review during its regular conference process.

Facts of the Case

Jan Peters, a German citizen, owned Amazon stock that was reported to California’s unclaimed property program. According to the Supreme Court Peters v. Cohen petition, Peters’ German address was changed from “D-80804 Munich, Germany” to “Munich, CA 00000” in the reporting process. Notice was then mailed to this address, which Peters never received. California subsequently took custody of the stock and sold it for approximately $1.6 million in 2020. Due to stock appreciation and splits, those shares would be worth over $4.2 million today.

Peters filed suit alleging violations of his constitutional rights under the Due Process and Takings Clauses, seeking declaratory and injunctive relief. Lower courts dismissed his claims, finding that the Eleventh Amendment’s grant of sovereign immunity barred relief against the state.

The case highlights critical issues with current state unclaimed property laws, particularly regarding notice procedures and address verification requirements that may fall short of constitutional standards.

Due Process Claims Challenge State Escheat Laws

The n petition argues that California’s notice procedures fail to meet constitutional standards established in cases like Mullane v. Central Hanover Bank (1950) and Jones v. Flowers (2006). The petitioner contends that current state escheat laws create several constitutional problems related to due process unclaimed property requirements.

Under current unclaimed property law, no individual notice is required for property under $50, meaning millions of small accounts receive only generic newspaper advertisements that may not effectively reach property owners. The petition raises concerns about address verification procedures and alleges that states don’t take adequate steps to verify or update addresses before declaring property abandoned.

Additionally, the petition argues that the state’s reliance on post-seizure remedies, such as requiring owners to search a website after their property has already been transferred to state custody, fails to provide the pre-deprivation notice required by the Constitution for due process unclaimed property protections.

Takings Clause Claim

The takings clause unclaimed property argument in Supreme Court Peters v. Cohen contends that California’s practice constitutes a physical taking under Horne v. Department of Agriculture (2015). The argument centers on the state’s practice of taking title to property and often selling it immediately, creating a permanent deprivation of the original asset.

Once property is sold under current unclaimed property law, the original items are not returned to owners; owners only recover the sale proceeds rather than the current value of their property. This takings clause unclaimed property issue is particularly significant in cases involving appreciating assets like stocks and digital assets, where the difference between historical sale prices and current values can be substantial.

Legal Precedents & Circuit Split

This constitutional unclaimed property case arises against a backdrop of evolving jurisprudence around state escheat Supreme Court decisions. In 2016, Justices Alito and Thomas wrote in Taylor v. Yee that “the constitutionality of current state escheat laws is a question that may merit review in a future case,” noting concerns about shortened dormancy periods and minimal notification procedures.

Several federal circuits have addressed similar issues with varying results, creating potential conflicts that the Supreme Court could resolve through the Supreme Court Peters v. Cohen decision.

How States Defend Their Unclaimed Property Programs

States typically defend their unclaimed property programs on several grounds that reflect legitimate policy concerns under current unclaimed property law. They argue these programs provide essential consumer protection by preventing businesses from indefinitely holding dormant accounts without oversight. States contend that centralized systems may be more effective at reuniting owners with property than leaving assets with individual businesses, which may lack resources or incentives to conduct extensive searches for missing owners.

California has specifically argued that its procedures comply with constitutional requirements and that the Eleventh Amendment provides immunity from certain types of lawsuits challenging state operations. The state maintains that its notice procedures are reasonably calculated to reach property owners and that adequate post-deprivation remedies exist for owners to reclaim their property under existing state unclaimed property laws.

What’s Next: Supreme Court Timeline

The  Peters v. Cohen petition is currently pending before the Supreme Court. The Court typically decides whether to grant review during its regular conference process, with decisions announced on scheduled opinion days. Whether the Court chooses to hear the case will depend on factors including the importance of the constitutional questions presented, the existence of circuit splits, and the potential for providing guidance to lower courts and state governments.

The petition argues that review is warranted given the scope of these programs and the constitutional principles at stake in constitutional unclaimed property law.

Conclusion

Peters v. Cohen presents the Supreme Court with an opportunity to clarify important constitutional principles governing state unclaimed property laws. The case involves the intersection of state fiscal policy, individual property rights, and federal constitutional protections—issues that affect millions of Americans and billions of dollars in assets.

The outcome could establish precedents that govern state escheat laws for years to come, potentially affecting how states balance their roles as protectors of unclaimed property with their fiscal interests in these increasingly significant revenue sources. For Sovos and other practitioners focused on unclaimed property compliance, this case represents a potential watershed moment in the evolution of unclaimed property law.