In 2016, a Minnesota county sold 94-year-old Geraldine Tyler’s condo at auction after she failed to pay her property taxes for several years. The sale yielded $40,000; Hennepin County kept not only the $15,000 in taxes, penalties, and costs that Tyler owed it, but also the $25,000 that was left over. The Supreme Court on Thursday ruled that the county’s actions violated the Fifth Amendment’s takings clause, which bars the government from taking private property for public use without adequately compensating the property owner.
Writing for a unanimous court, Chief Justice John Roberts began by addressing – and rejecting – the county’s argument that Tyler lacked a legal right, known as standing, to bring her takings claim at all. The county contended that Tyler was not actually harmed by the sale of her condo because she may have also had a mortgage for $49,000 on the property, as well as a $12,000 lien for unpaid homeowners’ association fees.
The justices dismissed the county’s protests as speculation, noting that the county had never actually provided evidence of either the mortgage or the lien. But in any event, Roberts continued, “Tyler still plausibly alleges a financial harm: The County has kept $25,000 that belongs to her.” If she had received that money, Roberts wrote, Tyler could have used it to pay down some of the debts linked to the condo.
Turning to the merits of Tyler’s challenge, Roberts framed the question before the justices as whether the $25,000 surplus remaining after Tyler’s condo was sold to pay her tax debt to the county is “property” for purposes of the takings clause. The county pointed to a 1935 state law that strips an owner who falls behind on her property taxes of her interest in the property. Therefore, the county argued, there was no property for the government to take.
The court disagreed, stressing that “property rights cannot be so easily manipulated.” Indeed, Roberts observed, even Minnesota itself “recognizes that in other contexts a property owner is entitled to the surplus in excess of her debt.” Although the county can sell Tyler’s condo to recover the $15,000 that she owes it, Roberts wrote, it cannot “use the toehold of the tax debt to confiscate more property than was due.” By keeping the $25,000, Roberts concluded, the county “effected a ‘classic taking in which the government directly appropriates private property for its own use.’”
Because it ruled in Tyler’s favor on her takings clause claim, the court did not resolve Tyler’s argument that the county’s actions also violated the Eighth Amendment’s ban on excessive fines. In a concurring opinion, Justice Neil Gorsuch (joined by Justice Ketanji Brown Jackson) suggested that, in his view, Tyler would have prevailed on this ground as well.
Lawyer Christina Martin of the Pacific Legal Foundation, who represented Tyler in the Supreme Court, praised the court’s ruling in a press release. She said that it “affirms that property rights are fundamental and don’t depend solely on state law. The Court’s ruling makes clear that home equity theft is not only unjust, but unconstitutional.”
Amy Howe, Justices rule Minnesota county violated takings clause, SCOTUSblog (May. 25, 2023, 12:09 PM), https://www.scotusblog.com/2023/05/justices-rule-minnesota-county-violated-takings-clause/