Overview
McDermott Partner Eric Carstens spoke at the Unclaimed Property Professionals Organization (UPPO) 2025 Annual Conference in Tucson, AZ.
It’s Getting Hot in Here – Litigation Update
Speaker: Eric Carstens
Key takeaways included:
- Unclaimed property litigation continues to be plentiful, and the law in many states is evolving with each decision. The Michigan Supreme Court even issued a key decision concerning the application of the statute of limitations during this presentation! That decision, other recent decisions, and those decisions still to come are critical to analyze and understand as holders assess risk and decide how to comply in a world where disputes are increasingly being decided by the courts.
- Not only are holders challenging outcomes, but claimants are increasingly suing states over property remitted (and then liquidated). Historically, this litigation has been focused on the securities industry. However, virtual currency and other newer property types that states require liquidation of will likely follow the same path.
- While active disputes between the states are currently quiet, we expect follow-up litigation between states over the scope of the MoneyGram decision and the questions the case left unanswered.
- Federal courts have interpreted nearly identical facts and constitutional claims very differently, creating a short-term opportunity for plaintiffs to “forum shop” and setting the stage for appellate review for the right plaintiff in the long-term.
Industry Focus: Healthcare
Speaker: Eric Carstens
Key takeaways included:
- The healthcare industry is both uniquely complex from a billing/payment standpoint and highly regulated, creating risks and opportunities.
- State regulatory laws, such as prompt pay and recoupment laws, may create outcomes where “property” is no longer owed to commercial payors (meaning the provider has no unclaimed property duty). These laws vary significantly in each state, but they present an opportunity for holders that do not incorporate these state regulatory regimes into their compliance practices.
- The healthcare industry is ripe with federal preemption areas and the scope of each property type must be analyzed carefully before reporting to the states.
- Mergers and acquisitions are on the rise in the healthcare industry and warrant scrutiny of unclaimed property compliance early in the deal process. Failure to address unclaimed property can lead to significant headaches post-acquisition.
- False Claims Act litigation is extremely common in the healthcare industry and often begins with a disgruntled former employee (usually post-merger). Preventing these lawsuits before they arise is not always possible, but strong compliance practices and deal diligence can go a long way toward preventing them (or, at a minimum, quickly fending them off).
