Government Taking of Private Property Struck Down
In 2008, we scored the original house vote on HB 608, and then the votes on HB 704 which included the original provisions of HB 608.
HB 608 allowed the state to confiscate the value of traveler's checks that had not been used in three years. Previous law required seven years before the state could confiscate the checks as "unclaimed property." We wrote:
Travelers' checks are not "unclaimed property" but property of the bank that sold them until they are claimed. While many may point to alignment with other states, this is a government taking of property.
We asked one legislator how in the world so many legislators could support the state taking someone's property so outright, and he explained that the taking is not from the traveler's check owner, but from the bank, which made it OK. Right.
On Monday, a federal court agreed with us, not only striking down the three-year time limit, but also the previous seven-year limit:
A federal judge barred Kentucky on Monday from seizing old traveler's checks as abandoned property after seven years instead of 15, saying the state changed the law in an effort to raise money instead of to reunite citizens with lost goods.
It marks the second time in three years that a court has rejected efforts by the legislature to shorten the waiting time before the state can seize old checks and cash them.
Traveler's check issuer American Express challenged the changes both times, winning in state court in 2007, then it challenged a revised law passed later that year in federal court. American Express challenged the statute in 2008, saying the law allowed Kentucky to improperly take the uncashed checks.
"Because it is clear that the state's objective was to raise revenue rather than to reunite citizens with lost property, (the law) does not satisfy rational basis review," U.S. District Judge Danny C. Reeves wrote in a 15-page opinion.
Score one for private property rights over "revenue enhancements"
