Siebers, Margaret et al v. Barca, Peter et al

Filing 41

OPINION and ORDER granting in part 20 Motion to Dismiss; denying 32 Supplemental Motion to Dismiss; granting 35 Motion for Leave to Amend. Plaintiffs should file the new operative complaint as a separate docket entry. Plaintiff Margaret Siebers is dismissed; Defendant Department of Revenue is dismissed. Signed by District Judge James D. Peterson on 7/5/22. (jat)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

MARGARET SIEBERS and
VICTOR VARGO, individually and on behalf of a class
of all others similarly situated,
Plaintiffs,
v.
PETER W. BARCA and the
STATE OF WISCONSIN
DEPARTMENT OF REVENUE

OPINION and ORDER
20-cv-1109-jdp

Defendants.
In this proposed class action, plaintiffs Margaret Siebers and Victor Vargo challenge
provisions of the Wisconsin Unclaimed Property Act under the Takings Clause. The statute
authorizes the state to take custody of lost or abandoned property, invest the property, and
return the property if the owner claims it. Plaintiffs contend that the state unlawfully retains
interest earned on unclaimed property that was non-interest bearing when the state took
custody.
When plaintiffs filed this lawsuit, the statute did not entitle them to the interest the
state earned on non-interest-bearing property. But less than a year later, Wisconsin revised its
law to pay interest on non-interest-bearing property in many situations. But plaintiffs contend
that the revised statute does not go far enough. They bring claims against the Wisconsin
Department of Revenue and the department’s secretary, Peter W. Barca.
Defendants have filed two motions to dismiss plaintiffs’ complaint, one before and one
after the unclaimed property act was revised. Dkt. 20 and Dkt. 32. Plaintiffs move to amend
their complaint in light of the revised statute. Dkt. 35. The core questions in deciding all three

motions are whether plaintiffs’ claims are: (1) mooted by the revised statute; (2) ripe for review;
barred by Eleventh Amendment sovereign immunity; and (4) proper under 42 U.S.C. § 1983.
The court concludes that none of these grounds warrant outright dismissal, so plaintiffs
will be granted leave to amend. But there are limitations on how they may proceed. Plaintiffs
may bring official-capacity claims against Barca for prospective relief. They may not seek
retrospective damages from Barca or the department. Siebers will be dismissed from the lawsuit
because she seeks retrospective relief. The department will also be dismissed. Defendants’ first
dismissal motion will be granted in part and the second will be denied.

BACKGROUND AND FACTUAL ALLEGATIONS
The court draws the following facts from the amended complaint, Dkt. 18, and the
proposed second amended complaint, Dkt 35-1.
In 1970, Wisconsin enacted a version of the Uniform Unclaimed Property Act, a type
of law that has been adopted by many states to govern property that has been lost or
abandoned. The purpose of unclaimed property laws is to create a system for the safekeeping
of lost or abandoned property, to provide owners with a process to reclaim their property, and
to allow state governments to benefit from lost or abandoned property that is not reclaimed.
Under Wisconsin’s law, property is presumed abandoned after a period of inactivity by
the property’s owner. Businesses that hold the property, typically financial institutions, must
first attempt to contact the owner to return the property. If the business is unable to do so, it
must turn the property over to the state along with the owner’s name and contact information.
Common types of unclaimed property include money in savings and checking accounts,

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uncashed dividends, stocks and mutual funds, unpaid wages, gift cards, and the contents of
safe deposit boxes.
Abandoned property that is transferred to the state remains the property of the original
owner; the state serves as the custodian of the property. If the unclaimed property is money, it
is deposited into Wisconsin’s Common School Fund, which distributes earnings to school
districts each year. If the unclaimed property is not money, such as stocks or mutual funds, the
state may sell the property after a certain period of time. The sale proceeds are deposited into
the common school fund. A portion of unclaimed property and proceeds are also deposited
into the state’s general fund to pay claims filed by property owners. Owners may reclaim their
property at any time by filing a claim with the state.
Plaintiffs filed this lawsuit in December 2020 challenging the state’s practice of
withholding interest earned by the state on non-interest-bearing property. In November 2021,
after this lawsuit was filed, Wisconsin repealed and replaced the statute with a revised version.
The court will discuss the relevant changes in the revised statute in the analysis section of this
opinion.
The plaintiffs are Wisconsin residents who own non-interest-bearing property that was
transferred into to state custody. Plaintiff Siebers filed a claim for her property and received
no interest back. Plaintiff Victor Vargo filed a claim but has not yet received a disposition. In
their proposed second amended complaint, plaintiffs propose to add a third plaintiff, Carijean
Buhk, who is in the same position as Vargo. Vargo and Buhk allege that under the revised
statute, they will not receive adequate state-earned interest on their property when the state
settles their claims.

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ANALYSIS
Plaintiffs contend that Wisconsin’s practice of withholding interest on non-interestbearing property is an uncompensated governmental taking in violation of the United States
and Wisconsin constitutions. Their claims sweep broadly, challenging the old and revised
statutes, and seeking monetary, injunctive, and declaratory relief.
Plaintiffs bring this action directly under the federal and state takings clauses, U.S.
Const. amend. V; Wis. Const. art. I, § 13.7, and under § 1983. Their claims are not novel.
Three recent decisions by the Court of Appeals for the Seventh Circuit held that a state’s failure
to return interest on unclaimed property is a taking without just compensation. These decisions
provide the legal background for plaintiffs’ claims, although they are not directly dispositive of
the issues now before the court.
In Cerajeski v. Zoeller, 735 F.3d 577, 578 (7th Cir. 2013) and Kolton v. Frerichs, 869 F.3d
532, 533 (7th Cir. 2017), the court held that Indiana and Illinois provisions that withheld
interest on interest-bearing property in state custody were unconstitutional under the federal
Takings Clause. In Goldberg v. Frerichs, the court extended these rulings to unclaimed property
statutes that denied interest to owners of non-interest-bearing property. 912 F.3d 1009, 1012
(7th Cir. 2019). In all three cases, the court relied on the well-settled principle that the owner
of an account owns both the principal and interest. See Brown v. Legal Found. of Washington, 538
U.S. 216, 235 (2003)). The cases stand for the rule that “a state may not take custody of
property and retain income that the property earns.” Kolton, 869 F.3d at 533; Goldberg, 912
F.3d at 1011−12 (when the state earns interest on property in its custody, the property owner
is entitled to that interest); Cerajeski, 735 F.3d at 578 (“[i]f you own a deposit account that
pays interest, you own the interest.”).

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Three motions are before the court. Before the revised statute was enacted, defendants
moved to dismiss plaintiffs’ complaint for failure to state a claim and lack of subject matter
jurisdiction. Defendants contend that plaintiffs’ claims are unripe, barred by sovereign
immunity, and not permitted under § 1983. Dkt. 21. After the statutory change, defendants
filed a supplemental motion to dismiss, asserting that the revised law has mooted plaintiffs’
claims. Dkt. 32.
Plaintiffs are undeterred. They move for leave to amend their complaint in four ways:
(1) conform the complaint to the revised statute; (2) add allegations related to plaintiff
Siebers’s claim; (3) add plaintiff Buhk; and (4) delete the claim seeking a declaration of the
meaning of state law. Dkt. 35. Defendants oppose amendment, Dkt. 36, contending that
amendment would be futile because plaintiffs’ new allegations suffer from the same problems
as the old allegations. Id. Under Federal Rule of Civil Procedure 15(a)(2), the court may grant
leave to amend when justice so requires. But the court need not grant leave when amendment
would be futile, which means that the new allegations could not withstand a motion to dismiss
under Federal Rule of Civil Procedure 12. See Brunt v. Serv. Emps. Int’l Union, 284 F.3d 715,
721 (7th Cir. 2002).
It makes sense to address the three motions together. The critical question is whether
amendment would be futile because plaintiffs’ new allegations raise claims that are moot,
unripe, barred by sovereign immunity, or improper under § 1983.
A. Mootness
Defendants contend that plaintiffs’ claims are mooted by the revised statute, so a
threshold question is whether the court has jurisdiction to decide this case. Under Article III
of the Constitution, federal courts have jurisdiction only over live cases and controversies.

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Wisconsin Right to Life State Pol. Action Comm. v. Barland, 664 F.3d 139, 146–49 (7th Cir. 2011).
A case becomes moot if the dispute between the parties ceases to exist or a party no longer has
a personal stake in the outcome of the lawsuit. Id. at 149. If a case becomes moot during the
litigation, it falls outside the federal court’s jurisdiction and the court cannot decide the case.
A dispute over the constitutionality of a statute becomes moot if a new statute is
enacted in its place during the litigation and it is “absolutely clear” that the alleged violations
could not reasonably be expected to continue. Zessar v. Keith, 536 F.3d 788, 794 (7th Cir.
2008). In other words, if the revised statute provides an assurance that the alleged unlawful
actions will cease, the lawsuit is moot. Id. at 794.
Under the old statute, Wis. Stat. § 177.24(3)(a), only owners of interest-bearing
property were entitled to state-earned-interest on their unclaimed property. Specifically, the
old statute stated that when an unclaimed property owner filed a claim for the return of his
property:
the administrator shall deliver the property to the claimant or pay
the claimant the amount the administrator actually received or
the net proceeds of the sale of the property . . . If the property
claimed was interest bearing to the owner on the date of surrender
by the holder, the administrator shall pay interest at a rate of 6
percent per year or any lesser rate the property earned while in
the possession of the holder.
Wis. Stat. § 177.24(3)(a). The statute did not expressly provide for payment of interest on
non-interest-bearing property.
The revised statute, Wis. Stat. § 177.0607, established a new framework for paying
interest to property owners. It provides that when the state takes custody of non-monetary
property, the owner is entitled to any earnings on the property before or on the date the
property is sold. Wis. Stat. § 177.0607(1). It states that when the state returns a property

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owner’s money or sale proceeds from non-monetary property, the state must pay simple
interest (at the applicable federal long-term interest rate) for the period that the money or
proceeds was in state custody. Wis. Stat. § 177.0607(2). Defendants contend that the revised
statute has solved the problem.
But plaintiffs contend that the revised statute “merely nibbles around the edges of this
problem and largely perpetuates the wrongs [they] have complained of.” Dkt. 34, at 1. Indeed,
the revised statute includes several carveouts to the interest-payment requirement:
(3) Interest shall not accrue:
(a) On property in the form of money that is less than
$100.
...
(c) Before January 2, 2019, except as provided in sub. (4).
(4) Property received by the administrator before January 2,
2019, that was interest-bearing to the holder at the time of receipt
by the administrator or this state shall accrue interest while in
possession of the administrator or this state at a rate of 6 percent
per year or any lesser rate the property earned while in the
possession of the holder.
Wis. Stat. § 177.0607(3) and (4).
Plaintiffs assert that state procedures under the revised statute still deprive them of
interest on their property in several ways:


Owners of non-interest-bearing property under $100 are not entitled to interest;



Owners of non-interest-bearing property over $100 are not entitled to interest
earned before January 2, 2019;



Owners of interest-bearing property transferred to the state before January 2,
2019, will receive reduced interest after January 2, 2019 (from six percent to the

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federal-long term rate) and the federal-long term rate might not reflect the state’s
true earnings on the property; and


Owners of non-interest-bearing property that was returned to them prior to the
enactment of the revised statute were denied interest on their property.1

Both sides overstate their positions. It is true that the revised statute eliminates the
distinction between interest-bearing and non-interest-bearing property for purposes of
returning interest. Under the revised law, most owners of non-interest-bearing property are
entitled to at least some interest on their property. But the limitations on the provision are not
inconsequential, and plaintiffs articulate several ways in which they will continue to be denied
interest. The revised statute narrows but does not eliminate plaintiffs’ constitutional concerns.
So it is not “absolutely clear” that alleged uncompensated takings will cease. Zessar, 536 F.3d
at 794. And as long as plaintiffs have a concrete interest in the dispute, however small, the case
is not moot. Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 161 (2016).
Plaintiffs’ proposed amended complaint also maintains claims for retrospective relief
based on the old statute. When a challenged statute is repealed or significantly amended, the
case is moot only if the plaintiff exclusively seeks prospective relief. Rembert v. Sheahan, 62 F.3d
937, 940 (7th Cir.1995).
Plaintiffs’ claims are not futile because of mootness.

Plaintiffs do not specify the value of each plaintiff’s property or when each plaintiff’s property
was transferred to the state. But both sides assume that each of these policies apply to the
property owned by one or more of the plaintiffs, so the court will make the same assumption.
1

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B. Ripeness
The case-or-controversy limitation on Article III authorizes the federal courts to decide
only cases that are ripe for review. The ripeness doctrine concerns whether a case involves
abstract, uncertain, or contingent events that may not occur as anticipated, or may not occur
at all. Wisconsin Right to Life, 664 F.3d at 148. The ripeness of a claim depends on whether the
issues are ready for judicial decision and whether the parties would suffer hardship if the court
withheld consideration. Id. The court does not have subject-matter jurisdiction over unripe
claims.
Defendants argue in their motion to dismiss that plaintiffs’ claims are unripe because,
although plaintiffs filed claims for the return of their property, the claims have not yet been
resolved. But plaintiffs’ proposed amended complaint states that Siebers has completed the
claim process and received no state-earned-interest on her property. Plaintiffs allege that Vargo
and Buhk have filed claims that remain unresolved.
While defendants’ original motion was pending, the Supreme Court decided Pakdel v.
City & Cty. of San Francisco, California, 141 S. Ct. 2226 (2021), which clarified the ripeness
requirement for takings claims. Pakdel states that to satisfy that requirement, a plaintiff does
not need to show that he sought relief through prescribed state administrative procedures and
that the government rejected his request. Id. at 2288. “The finality requirement is relatively
modest. All a plaintiff must show is that there is no question about how the regulations at issue
apply to the particular [property] in question.” Id. at 2230 (quotations omitted). The court
explained that when the government is committed to a position, ambiguities and contingencies
disappear, and the dispute is ripe. Id. This requirement ensures that plaintiffs suffer actual
harm rather than a hypothetical or contingent injury. See id.

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In this case, there is no question that the state is committed to a position. Siebers
received no interest earned on her unclaimed property. And the revised statute provides that
Vargo and Buhk are not entitled to interest on property valued at less than $100 or interest
earned before January 2, 2019. This result is spelled out in the statute, it is not hypothetical
or speculative. Defendants have identified no contingencies or uncertain events that may not
occur as anticipated with respect to plaintiffs’ claims.
Plaintiffs’ claims are not futile on the grounds that they are unripe.
C. Sovereign immunity
Defendants contend that sovereign immunity bars plaintiffs’ suit. Plaintiffs argue that
none of their claims are barred, either because they fall within an exception to sovereign
immunity known as the Ex Parte Young doctrine or because sovereign immunity does not apply
to their claims in the first place.
1. Ex Parte Young
The Eleventh Amendment generally prohibits individuals from suing a state, state
agency, or state official in federal court. Indiana Prot. & Advoc. Servs. v. Indiana Fam. & Soc.
Servs. Admin., 603 F.3d 365, 370 (7th Cir. 2010). But sovereign immunity is not absolute. Ex
Parte Young created an exception to sovereign immunity for suits against state officials that seek
prospective relief. 209 U.S. 123 (1908).
Here, plaintiffs name the department and Barca in his official capacity as defendants.
The claims against the department clearly are barred by sovereign immunity because Ex Parte
Young is not available for claims against state agencies. But plaintiffs may bring official-capacity
claims against Barca that meet the Ex Parte Young requirements. To determine whether Ex Parte
Young applies, court consider whether plaintiffs: (1) allege an ongoing violation of federal law;

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and (2) seek relief that is properly characterized as prospective. Indiana Prot. & Advoc. Servs.,
603 F.3d at 371.
The parties do not dispute whether plaintiffs have alleged an ongoing violation of
federal law, so the court will assume that requirement is satisfied. Defendants’ central
contention is that plaintiffs do not seek relief that is truly prospective. To determine whether
sought-after relief is prospective, the court considers whether plaintiffs seek to prevent future
conduct or to obtain a remedy for past harms. Driftless Area Land Conservancy v. Valcq, 16 F.4th
508, 521 (7th Cir. 2021). Requests for declarations and injunctions connote prospective relief,
see id., but the labels are not decisive. Edelman v. Jordan, 415 U.S. 651, 666 (1974). What
matters is the practical effect of the requested relief. Relief that is labeled as injunctive or
declaratory is barred by sovereign immunity if, in practice, judgment for the claimant would
result in a money judgment payable out of state funds. Id.
But that does not mean that properly prospective relief cannot have a fiscal impact on
a state. Id. at 667. In some situations, enjoining state officials from unconstitutional practices
will change the way that state funds are used. Id. When an injunction or declaration would
require a state to spend more money, but the increased spending is necessary to comply with
federal law in the future, Ex Parte Young applies. “Such an ancillary effect on the state treasury
is a permissible and often an inevitable consequence of the principle announced in Ex [P]arte
Young.” Id. at 668.
In this case, plaintiffs’ amended complaint lists more than a dozen requests for
declaratory, injunctive, and monetary relief, which the court paraphrases:


a declaration that the retention of interest on plaintiffs’ unclaimed property is a
governmental taking;

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

a declaration that the retention of interest on plaintiffs’ unclaimed property is a
governmental taking for which the state must pay just compensation;



a declaration that when the state returns unclaimed property and withholds
interest earned, that withheld interest is plaintiffs’ own property;



a declaration stating the proper measure of just compensation or the amount of
property that the state must return to plaintiffs;



a declaration that the state must pay just compensation upon the return of
unclaimed property;



a declaration whether plaintiffs are entitled to compensation or return of interest
on their unclaimed property under Wisconsin law;



an injunction preventing the state from refusing to return plaintiffs’ own
property;



an injunction requiring the state to stop refusing to compensate plaintiffs for
interest earned on their unclaimed property;



an injunction requiring the state to hold interest on unclaimed property separate
from general treasury funds;



an injunction requiring the state to comply with declarations the court enters;



an award for the return of plaintiffs’ property or just compensation;

Dkt. 35-2, at 17−18.
The precise scope of plaintiffs’ requests is difficult to understand. For example,
plaintiffs’ requests for declaratory relief seem to seek five different versions of the same thing,
a declaration that the state’s practice of withholding interest on plaintiffs’ unclaimed property

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is an unlawful uncompensated governmental taking. And it is not clear how plaintiffs intend
to use these declarations.
Defendants say that plaintiffs’ sought-after relief is a straight-up claim for money
damages. They cite Council 31 of the Am. Fed’n of State, Cty. & Mun. Emps., AFL-CIO v. Quinn,
680 F.3d 875 (7th Cir. 2012) and McDonough Assocs., Inc. v. Grunloh, 722 F.3d 1043 (7th Cir.
2013), for the proposition that “creatively styling” a claim for state funds cannot defeat
sovereign immunity.
In McDonough, a construction contractor sued Illinois officials for refusing to execute
contracts and pay for completed construction work. 722 F.3d 1045–48. The district court
issued a temporary restraining order directing the state to execute the contracts, which lead the
state to pay for the completed work. Id. Sovereign immunity barred the claims because the
relief, although framed as injunctive, resulted in a state payment to remedy a past breach of
contract. Id. at 1052. Similarly, in Council 31, a state employees union challenged the
constitutionality of an Illinois salary level freeze for state workers. 680 F.3d at 878. Plaintiffs
sued after the pay freeze took effect, asking the court to enjoin the rules implementing the new
policy. Sovereign immunity also barred this claim. Plaintiffs in that case asked for an injunction
that, in essence, would have required the state to pay workers for past-due salary increases. Id.
at 884.
In this case, plaintiffs seek both prospective and retrospective relief. Plaintiffs concede
that some of what they ask for is backward-looking (and they offer several arguments for why
the claims are still permissible, which the court will address in the next section). Specifically,
they want monetary relief to compensate for interest that the state withheld on property that
already has been returned. That is retrospective relief for past harm.

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But plaintiffs also ask the court for an injunction that prohibits defendants from
refusing to pay all earned interest on plaintiffs’ unclaimed property moving forward, and an
injunction that requires the state to hold interest earned on unclaimed property in a separate
account. That is prospective relief.
The court concludes that under Ex Parte Young, plaintiffs may seek injunctive and
declaratory relief aimed at securing state-earned-interest on claims that have not yet been paid
by the state. If plaintiffs succeed on the merits of their claim later in the case, this relief would
require the state to settle claims in compliance with federal law in the future. See Cerajeski, 735
F.3d at 579 (plaintiff awarded declaration that she was entitled to interest on her unclaimed
property to use when she later filed a claim for the return of her property). But the Ex Parte
Young doctrine does not allow plaintiffs to seek relief aimed at getting interest back on claims
already settled by the state. This means that plaintiffs’ requests for monetary awards and for
declaratory relief that the state is liable for a taking and owes just compensation are not
permissible. Rasche v. Lane, 150 F. Supp. 3d 934, 944 (N.D. Ill. 2015) (a request for damages
to remedy a past injury shoehorned into a claim for declaratory relief is not permitted under
Ex Parte Young). Applied to the individual plaintiffs, Vargo and Buhk may seek prospective
relief because their claims have not been settled, but Siebers has no remedy because her claim
has already been resolved.
In sum, plaintiffs’ claims are not entirely barred by sovereign immunity. Plaintiffs may
proceed on official-capacity claims against Barca in his official capacity under Ex Parte Young.
They may seek declaratory and injunctive relief requiring the state to include earned interest
with claims paid in the future, but they may not seek interest associated with already-settled
claims.

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2. Damages
Plaintiffs concede that they also want compensation for “unredressed constitutional
deprivations.” Dkt. 34, at 2. The make two arguments for why sovereign immunity does not
bar their damages claims: (1) sovereign immunity is waived in Takings Clause claims; and
(2) plaintiffs seek the return of their own property, not money that belongs to the state.
a. Waiver
Plaintiffs contend that the Takings Clause stands as an exception to sovereign
immunity. Dkt. 24, at 11. As the argument goes, the Takings Clause prohibits the government
from taking a person’s private property for public use without just compensation. The clause
thus creates right to a monetary remedy for a taking that is embedded directly within the
constitution. So sovereign immunity does not apply. This concept is known as the “selfexecuting” character of the Takings Clause. See, e.g., Knick v. Twp. of Scott, Pennsylvania, 139 S.
Ct. 2162, 2171 (2019).
But the Seventh Circuit expressly rejected this argument in Garrett v. State of Ill., 612
F.2d 1038, 1039 (7th Cir. 1980). The plaintiff brought a takings claim for money damages
against state officials, arguing that because “he sued for a deprivation protected directly by the
constitution,” the Takings Clause should “impose monetary liability on a state without regard
for the Eleventh Amendment.” Id. at 1039–40. The court disagreed, holding that the “Eleventh
Amendment stands as an express bar to federal power when a [takings action for damages] is
brought against one of the states.” Id. at 1040.
Plaintiffs cite Lucien v. Johnson, which states that First Eng. Evangelical Lutheran Church of
Glendale v. Los Angeles Cty., Cal., 482 U.S. 304 (1987) held that “the Constitution requires a

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state to waive its sovereign immunity to the extent necessary to allow claims to be filed against
it for takings of private property for public use.” 61 F.3d 573, 575 (7th Cir. 1995).
But the court concludes that Garrett is controlling despite Lucien. As an initial matter,
First English is not as clear on waiver as Lucien represents. First English suggested in a footnote
that the Takings Clause provides a basis for money damages against a government despite
sovereign immunity.2 482 U.S. at 316, n.9. But plaintiffs in First English sued a county rather
than a state, and they sued in state court rather than federal court. So the court does not read
First English to mean that sovereign immunity is waived for takings claims like the one in this
case. See also Ladd v. Marchbanks, 971 F.3d 574, 580 (6th Cir. 2020) (First English “is concerned
not with abrogating the states’ Eleventh Amendment immunity in federal court, but with
noting that the Fifth Amendment’s requirement of just compensation forces the states to
provide a judicial remedy in their own courts.”); Eric Berger, The Collision of the Takings and State
Sovereign Immunity Doctrines, 63 Wash. & Lee L. Rev. 493, 494 (n. 4) (2006) (the Takings
Clause and Eleventh Amendment create a doctrinal collision that First English left open; state
courts split with federal courts on the issue, the case’s discussion of the issue is dicta, and it
does not engage with the issue’s complexities.).
Lucien’s reading of First English does not overrule Garrett’s explicit holding. The
statement in Lucien was not necessary to resolve plaintiff’s takings claim, which failed because
he sued the wrong defendants, did not show harm, and did not allege that his property was
taken for public use. Id. at 575–77. The general rule is that one panel of a circuit court cannot

The footnote stated in relevant part: “The cases cited . . . we think, refute the argument . . .
that the [Takings clause] does not, of its own force, furnish a basis for a court to award money
damages against the government.” First English, 482 U.S. at 316, n.9.

2

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overrule another panel in the in the absence of an intervening statute or Supreme Court
decision. James Wm. Moore, Moore’s Federal Practice § 134.02(1)(c) (3d ed. 2016). In this
circuit, when one panel disagrees with a previous panel’s decision, the proper procedure is to
seek approval from the full court to overrule the earlier decision. 7th Cir. Rule 40(e). In Lucien,
the court did not seek full court approval to overturn Garrett; in fact, the court did not even
acknowledge Garrett. Thus, Lucien could not overrule Garrett.
Plaintiffs also cite Zinn v. State, which states that the Takings Clause of the Wisconsin
Constitution is self-executing and constitutes a waiver to the doctrine of sovereign immunity.
112 Wis. 2d 417, 436, 334 N.W.2d 67, 76 (1983). But Zinn did not involve Eleventh
Amendment sovereign immunity, it concerned waiver in state court under state law. And a
“state’s waiver of sovereign immunity in its own courts is not a waiver of the Eleventh
Amendment immunity in the federal courts.” Pennhurst State Sch. & Hosp. v. Halderman, 465
U.S. 89, 100 (1984).
The weight of federal precedent allows states to assert sovereign immunity defenses to
takings claims for money damages. See, e.g, Ladd, 971 F.3d at 579 (a state’s sovereign immunity
protects it from takings claims for damages in federal court); Williams v. Utah Dep’t of Corr.,
928 F.3d 1209, 1213 (10th Cir. 2019) (state sovereign immunity bars a takings claim against
a state as long as a remedy is available in state court); Bay Point Properties, Inc. v. Mississippi
Transportation Comm’n, 937 F.3d 454, 457 (5th Cir. 2019), cert. denied 140 S. Ct. 2566 (2020)
(Takings claim against the state for monetary award was barred by sovereign immunity).
The court concludes that Wisconsin has not waived its sovereign immunity in this case.

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b. Return of property
Plaintiffs contend that they may seek damages because state-earned-interest on their
property belongs to them, not to the state. Specifically, they contend that the Seventh Circuit
decisions in Cerajeski, Kolton, and Goldberg make clear that they own the interest earned on their
property. And they assert that they are entitled to their property back under Taylor v. Westly
and Suever v. Connell, Ninth Circuit cases which held that there is an exception to sovereign
immunity for takings suits against a state when a plaintiff seeks his own property back and
alleges that the property was seized in violation of the constitution. 402 F.3d 924, 925 (9th
Cir. 2005); 439 F.3d 1142, 1143 (9th Cir. 2006).
But plaintiffs have not directed the court to any binding authority that recognizes this
exception to sovereign immunity and the court’s research did not reveal any. The rule in this
circuit is that sovereign immunity bars any request for relief that would result in monetary
compensation from the state for a past constitutional wrong. Driftless, 16 F.4th at 521; MSA
Realty Corp. v. State of Ill., 990 F.2d 288, 292 (7th Cir. 1993). The caselaw make no distinction
between money in state coffers that is owned by the state versus money owned by the property
owner, and the line would be a difficult one to draw. See, e.g., Rubinas v. Maduros, 513 F. Supp.
3d 994, 1005 (N.D. Ill. 2021) (rejecting Suever’s application to taxpayer’s claim for the return
of assets seized by the state from her bank account to cover tax liability because the funds were
not escheated or held in trust).
The court concludes that plaintiffs’ request for the return of their own property is
“indistinguishable from an award of damages against the state” and is barred by sovereign
immunity. Edelman, 415 U.S. at 651. So plaintiffs may not pursue damages under this theory.

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D. Section 1983
Plaintiffs also assert Takings Clause claims under § 1983, which authorizes private
individuals to sue “persons” acting under color of state law for constitutional deprivations.
Defendants contend that plaintiffs’ § 1983 claims should be dismissed because neither the
department nor Barca can be sued under the statute. Defendants are correct in some respects.
States and state agencies are not persons for § 1983 purposes and cannot be sued. Fritz v. Evers,
907 F.3d 531, 533 (7th Cir. 2018). Section 1983 does not allow damages suits against state
officials in their official capacity either, because that is the same as suing the state. Id. So
plaintiffs may not seek monetary damages against the state or Barca under § 1983.
But official-capacity suits against state officials seeking prospective relief are not
considered actions against the state and are permitted by § 1983. Williams v. Wisconsin, 336
F.3d 576, 581 (7th Cir. 2003) (citing Will v. Mich. Dep’t of State Police, 491 U.S. 58, 71 n. 10
(1989)). Because plaintiffs seek declarations and injunctions aimed at preventing ongoing
constitutional violations, they may sue Barca for prospective relief under § 1983.
Defendants contend that to bring this type of claim, plaintiffs must allege that Barca
was personally involved in the violation. But the § 1983 personal-involvement requirement
only applies to actions for damages. Gonzalez v. Feinerman, 663 F.3d 311, 315 (7th Cir. 2011)
(defendant’s lack of personal involvement would be conclusive if plaintiff sought only damages,
but because plaintiff sought prospective relief, defendant’s participation in the alleged
violations is irrelevant). A defendant may be enjoined even if he was not personally involved
in the violation if he would be responsible for implementing the prospective relief. Id. Barca is
the department’s secretary and would have this responsibility.

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The court will dismiss plaintiffs’ § 1983 claims for damages and allow them to proceed
on § 1983 claims for prospective relief against Barca. It is not clear what this claim adds to
plaintiffs’ lawsuit, because the relief available under § 1983 and Ex Parte Young is the same.

CONCLUSION
Wisconsin’s revised unclaimed property act does not moot plaintiffs’ claims, which are
not unripe, or barred by sovereign immunity or § 1983 principles. Amendment would not be
futile, so plaintiffs’ will be granted leave to amend. Defendants’ initial motion to dismiss will
be granted in part and their supplemental motion to dismiss will be denied, consistent with
this opinion. Plaintiffs may bring federal and state takings claims seeking prospective relief but
they may not seek money damages. The department will be dismissed from this lawsuit. Siebers
has no avenue for relief and also will be dismissed. When plaintiffs move for class certification,
they will need to appoint a class representative whose claims share the same essential
characteristics as the class members’ claims. Muro v. Target Corp., 580 F.3d 485, 492 (7th Cir.
2009).

ORDER
IT IS ORDERED that:
1. Defendant’s motion to dismiss, Dkt. 20, is GRANTED in PART.
2. Defendants’ supplemental motion to dismiss, Dkt. 32, is DENIED.
3. Plaintiffs’ motion for leave to amend, Dkt. 35, is GRANTED. Plaintiffs should file
the new operative complaint as a separate docket entry.

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4. Plaintiff Margaret Siebers is DISMISSED.
5. Defendant Department of Revenue is DISMISSED.
Entered July 5, 2022.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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