A short one from the U.S. Court of Appeals for the Third Circuit, which asks: when the government is holding your abandoned property for you, do you have to ask for it to return it to you before you can bring a takings claim?
In Dillow v. Treasurer of the Commonwealth of Pennsylvania, No. 24-2004 (Oct. 3, 2025), the court held yes: the owner’s takings claim was not ripe because he had not asked the Treasurer to give the property back.
This is a non-precedential opinion so it is short. But there are two interesting parts that you should focus on.
First, the description of Pennsylvania’s system of unclaimed property. Pennsylvania deemed Dillow’s property — an uncashed claims payment check and a bank draft — to be “unclaimed,” and the Treasurer took custody and converted them to cash. Dillow did not file a claim for the cash. He acknowledged that if he asked, the Treasurer would give him back the cash, but withhold any interest. Dillow argues this violates the Just Compensation Clause.
Here’s how the court describes Pennsylvania’s escheat system:
DAUPA is Pennsylvania’s “escheat” law, a law that governs states’ disposition of unclaimed property. See, e.g., Am. Exp. Travel Related Servs., Inc. v. Sidamon-Eristoff, 669 F.3d 359, 365 (3d Cir. 2012); 72 Pa. Stat. and Cons. Stat §§ 1301.1-1301.29. Under DAUPA, once property is deemed “abandoned and unclaimed”—which occurs in specific, statutorily-defined circumstances, §§ 1301.1-1301.11—the holder of the property must attempt to notify the owner so that he may claim it, § 1301.10a. If the owner of the property does not claim it, the holder then must deliver that property to the State Treasurer for safekeeping. See §§ 1301.2, 1301.13. Upon delivery, the Commonwealth holds the property in “perpetual temporary custody,” Smolow v. Hafer, 959 A.2d 298, 304 (Pa. 2008), but “does not acquire title to [the] property, . . . and the owner can reclaim it at any time,” In re Escheatment of Matured, Unredeemed, & Unclaimed U.S. Sav. Bonds, 189 A.3d 520, 533 n.11 (Pa. Commw. Ct. 2018).
Until the owner claims the property, however, the Commonwealth may use it for the common benefit of its citizens, including selling the property to convert it to cash to be deposited in the Commonwealth’s General Fund or donating it to the Commonwealth or one of its subdivisions if “the costs associated with delivery, notice or sale exceed the value of the property.” §§ 1301.17-1301.18. If an owner claims property after it has been sold, “[t]he State Treasurer shall be responsible to [its] owner only for the amount actually received . . . upon [its] sale.” § 1301.17(d).
Slip op. at 2-3.
In short, the Treasurer doesn’t take title to the unused property, but merely converts it to cash and holds it for you. You ask for it, you get it back. But you don’t get interest or anything else, just the cash value of your property. Got it.
The district court dismissed the claim for failure to state a claim because the Treasurer need not pay Dillow interest to “compensate [him] for the consequences of his own neglect.” This is on you, buddy.
The Third Circuit however, took a different approach. It held that the takings claim is not ripe because Dillow has not asked the Treasurer to give him back his property. Wait, you say, this sounds like exhaustion of remedies, which a takings claimant need not do. After all, a taking ripens a claim because it triggers the government’s obligation to provide compensation. If property has been taken, you need not chase other remedies.
And this brings us to the second interesting point in the opinion, the way which the court differentiates between ripeness and exhaustion:
Requiring Dillow to make such a claim is not tantamount to mandating a type of pre-suit exhaustion. In cases requiring exhaustion, a plaintiff has suffered an injury but must exhaust other remedies to address the injury. Here, Dillow is not injured until he deprived of something to which he claims entitlement. See Pakdel v. City & County of San Francisco, 594 U.S. 474, 479 (2021) (noting in the takings context that plaintiffs still must have been actually injured by the Government’s action and are not prematurely suing over a hypothetical harm).
Unless and until the contingencies noted above occur, Dillow’s claim is not ripe and the federal court lacks jurisdiction to consider the merits of his claims.
Slip op. at 6.
Hang on. How is Dillow not injured? He has a right to the cash which the Treasurer acknowledges. We get that nothing really has been taken for that, and that he’s not claiming (as in Tyler) that the government is wrongfully taking ownership of the cash that belongs to him. The way we read it, isn’t his claim that the Treasurer is wrongfully claiming ownership of the interest? And that it would be futile to ask for it because the statutory scheme forbids the Treasurer from giving him the interest?
If the Treasurer can’t give you property that you claim you own, how is that not an injury, and how is requiring you to undertake a futile act required?
The Third Circuit didn’t see it that way, however:
Here, Dillow alleges his expectation that “should [he] claim his property, [the Treasurer] . . . will not pay any just compensation to [him] for the Commonwealth’s use of that property during the period of custody.” App. 30. He does not allege that he has filed a claim with the Treasurer and was denied the property or the interest on the value of his property being held. Thus, any harm to Dillow is subject to multiple contingencies, including submitting a claim for the property from the Treasurer, which remains abandoned.
Slip op. at 5.
So who is right here? The court, which held that there’s too many factual “contingencies” that have not yet occurred, thus rendering Dillow’s injuries too speculative? Or Dillow, who asserts that he owns the interest and there’s no way to get it, so why bother asking?
Dillow v. Treasurer of the Commonwealth of Pennsylvania, No. 24-2004 (3d Cir. Oct. 3, 2025)