The lawsuit is Paul R. Hashim et al. v. Malia M.
Cohen et al., a federal class case in the Central District of California. It seeks to stop California's Controller from taking and selling private property under the Unclaimed Property Law. Unclaimed property is money and other assets that appear abandoned after lost contact with the owner. California holds the assets in custody, sometimes sells securities and safe-deposit contents, and lets owners claim later.
Official resources:
- Read the original report from Sovos — Use this primary source to review the complete report.
- Read the official notice from Alston — Use this primary source to verify the official announcement.
Table of Contents
- What the new case challenges
- Why notice is the central fight
- How one address error cost millions
- Why federal takings claims face a high barrier
- What to check if California may hold your funds
What the new case challenges
The defendants are State Controller Malia M. Cohen and contractors Kroll LLC and Kelmar Associates LLC.
According to the New York Post, the suit challenges California's roughly $15 billion custody and liquidation system in its October report on the seizure claims. Plaintiffs seek class-wide relief against seizure and sale. According to Larson LLP, they filed a preliminary-injunction motion on October 7, 2026 in its announcement of the injunction motion.
Why notice is the central fight
Plaintiffs allege constitutionally inadequate notice before the state takes custody. The Controller relies on yearly newspaper advertisements rather than direct contact in many cases.
The suit also challenges the lack of individual notice for property deemed minimal value. It says the state does not use findable public-record addresses before seizure and sale.
How one address error cost millions
The earlier related Peters case centers on a German address. It was reported as Munich, CA 00000 instead of D-80804 Munich, Germany.
Mailed notice therefore went to a false California address the owner never received. According to Sovos, California took Jan Peters' Amazon shares and sold them for about $1.6 million in 2020, while the petition says the same shares would exceed $4.2 million today after appreciation and splits in its summary of the Peters petition.
Why federal takings claims face a high barrier
Lower courts dismissed Peters' Due Process and Takings Clause claims on Eleventh Amendment sovereign-immunity grounds. The Ninth Circuit's March 2025 decision kept that restrictive result for federal takings claims over custodial unclaimed property.
An important limit is geography. According to Alston & Bird, the Ninth Circuit treats custodial holding as non-compensable, while Tenth and Eleventh Circuit decisions allow similar takings claims to proceed in its analysis of state-custody litigation. Outcomes therefore depend on filing location after Supreme Court non-intervention.
What to check if California may hold your funds
The practical categories include bank accounts, stocks, insurance payouts, checks, and safe-deposit contents. The Controller's office says property generally transfers after about three years of lost contact.
Affected owners can search by name and file a claim without charge. The Controller's office says it now safeguards $15 billion, with no deadline to claim:.
- Search the free state site at claimit.ca.gov
- Gather proof of identity, address history, and ownership
- File promptly because securities can be sold after transfer