§ 1603.United States Held Harmless Against Claim Concerning Property Delivered to State

Handing federal custody property over to California only works if the federal government isn't left holding legal risk afterward, and this section is California's promise on that score. The state undertakes to hold the United States harmless against any claim concerning property it delivers to California's custody under this chapter, meaning California, not the federal government, absorbs the exposure if someone later challenges the transfer.

That promise has teeth. If a claim over such property is brought against the United States anyway, the Attorney General must intervene in that case, and the state consents to being sued by the claimant instead. Any defense the United States could have raised against the claim remains available, and the state is expected to raise it, so a claimant gains nothing by suing the federal government rather than California directly.