Small Business Owner Suing Illinois Over Absurd Licensing Requirement Gets First Round Victory

ARLINGTON, Va.—David Knott helps rightful owners reclaim their property from state governments across the nation, but not in Illinois. In Illinois, David can only help people if he gets a private detective license. But the training required for that license does not cover anything related to the unclaimed property database. Yesterday, a federal district court gave David an early victory in the federal lawsuit he filed against the state with the Institute for Justice (IJ).

“The First Amendment protects both the right to speak and the right to petition the government. David does both, but the state says he needs to first spend years getting an irrelevant license” said Institute for Justice Attorney James Knight. “The court today recognized that David has a right to sue to challenge that unconstitutional requirement.”

The state of Illinois holds $5 billion in unclaimed property and every day, more and more accounts get misplaced, bills aren’t logged properly, and estates aren’t appropriately filed. There’s so much misplaced property that the state of Illinois has even started diverting it to fund its pension obligations. The State Treasurer is supposed to return property when the owner comes forward, but people seldom even know that the state is holding their property, much less how to claim it.

So that’s where David comes in. He runs a small business, called United Asset Recovery, Inc., that searches state databases to locate owners of unclaimed property and then helps people file paperwork to get it back. David works on contingency, so the only way he makes money is if he successfully recovers the property.

For a long time, he was able to do so in Illinois without incident. However, in 2021 the state sent David a cease-and-desist letter, telling him he could not help anyone submit a claim without a private detective license. To get licensed, he would have to study and pass an exam on topics that have nothing to do with his work searching government databases—including firearms handling, crime scene investigation, and electronic surveillance. The state would also require David to work for three years as an apprentice to a licensed private eye, years David could not work helping people reclaim their property.

This license isn’t just nonsensical—it’s unconstitutional. David’s lawsuit seeks to vindicate his First Amendment rights and remove a high barrier to property owners recovering their assets in Illinois.

“Illinois is violating my right to free speech by stopping me from sharing valuable information with my clients about money they own but don’t know about,” said David. “The Court’s ruling cleared the way for my case to be heard so we can protect the free speech rights of every American.”