Supreme Court Holds Retaining Excess Value Violated Takings Clause
In Tyler v. Hennepin County, 598 U.S. ____ (2023), the U.S. Supreme Court held that the government can’t keep the profits of properties sold to satisfy tax debts. Accordingly, Geraldine Tyler plausibly alleged that Hennepin County unconstitutionally retained the excess value of her home above her tax debt in violation of the Fifth Amendment’s Takings Clause.
Facts of the Case
Geraldine Tyler owned a condominium in Hennepin County, Minnesota, that accumulated about $15,000 in unpaid real estate taxes along with interest and penalties. The County seized the condo and sold it for $40,000, keeping the $25,000 excess over Tyler’s tax debt for itself pursuant to Minn. Stat. §§281.18, 282.07, 282.08.
Tyler subsequently filed suit, alleging that the County had unconstitutionally retained the excess value of her home above her tax debt in violation of the Takings Clause of the Fifth Amendment and the Excessive Fines Clause of the Eighth Amendment. The District Court dismissed the suit for failure to state a claim, and the Eighth Circuit affirmed. It held that “[w]here state law recognizes no property interest in surplus proceeds from a tax-foreclosure sale conducted after adequate notice to the owner, there is no unconstitutional taking.”
Supreme Court’s Decision
The Supreme Court reversed. It held that Tyler plausibly alleged that Hennepin County’s retention of the excess value of her home above her tax debt violated the Takings Clause. “The County had the power to sell Tyler’s home to recover the unpaid property taxes. But it could not use the toehold of the tax debt to confiscate more property than was due,” Chief Justice John Roberts wrote on behalf of the unanimous Court.
The Court first addressed the issue of standing. It held that Tyler’s claim that the County illegally appropriated the $25,000 surplus constitutes a “classic pocketbook injury sufficient to give her standing” under TransUnion LLC v. Ramirez, 594 U.S. ___, (2021). According to the Court, even if there are debts on her home, Tyler still plausibly alleged a financial harm because the County kept $25,000 that she could have used to reduce her personal liability for those debts.
The Court next turned to whether Tyler had stated a claim under the Takings Clause. In answering in the affirmative, the Court cited both history and precedent, noting that the principle that a government may not take more from a taxpayer than she owes dates back to the Magna Carta. The Court also cited Supreme Court precedents that have also recognized the principle that a taxpayer is entitled to the surplus in excess of the debt owed.
“The Takings Clause ‘was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole,’”Chief Justice Roberts wrote. “A taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc than she owed. The taxpayer must render unto Caesar what is Caesar’s, but no more.”
SCOTUS to Determine Future of Chevron Deferenceby DONALD SCARINCI on November 20, 2023
The U.S. Supreme Court has now granted certiorari in two cases challenging the continued viability ...
Racial Gerrymandering Takes Center Stage as Court Considers Three Casesby DONALD SCARINCI on November 1, 2023
The U.S. Supreme Court heard oral arguments in three cases last week. The issues before the Court i...
Supreme Court Kicks Off 2023-2024 Term with Oral Arguments in Three Casesby DONALD SCARINCI on October 25, 2023
The U.S. Supreme Court returned to the bench on October 2, 2023. The justices heard three oral argu...
- Establishment ClauseFree Exercise Clause
- Freedom of Speech
- Freedoms of Press
- Freedom of Assembly, and Petitition
- The Right to Bear Arms
- Unreasonable Searches and Seizures
- Due Process
- Eminent Domain
- Rights of Criminal Defendants
Preamble to the Bill of Rights
Congress of the United States begun and held at the City of New-York, on Wednesday the fourth of March, one thousand seven hundred and eighty nine.
THE Conventions of a number of the States, having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best ensure the beneficent ends of its institution.