Tyler v. Hennepin County
What's at Stake
This case concerns whether taking and selling a home to satisfy a debt to the government, and keeping the surplus value as a windfall, violates the Fifth Amendment's takings clause.
Summary
The Fifth Amendment guarantees that the government cannot take private property for public use without just compensation. But today, some local governments assert the authority to seize all the equity in a home, and then sell it to pay off de minimis tax bills. These seizures often target poorer communities—and often the elderly within those communities—who own their homes but have insufficient disposable income to pay their taxes. In most states, the surplus proceeds from such sales are returned to the owner. But in Hennepin County, Minnesota, the county keeps all the proceeds, even if it far exceeds what the homeowner owed. The result can leave impoverished families even more destitute.
94-year-old Geraldine Tyler, the petitioner here, is a victim of this practice. Tyler owed $2,300 in taxes on a condominium worth around $40,000. When she did not pay her property taxes, she accumulated almost $12,700 in fees and interest. Hennepin County, Minnesota, seized her home, sold it for $40,000, paid off her tax debt, and then kept the $25,000 in remaining equity. Tyler was left with nothing.
Previously, the Minnesota Supreme Court held that homeowners posses a right to the surplus equity of their homes in the context of unpaid tax debts and mortgage payments. However, the Minnesota legislature undercut the court’s ruling by passing legislation that permits the government to retain the entire surplus.
The American Civil Liberties Union, along with the ACLU of Minnesota, the Cato Institute, the National Association of Home Builders, and the Owner’s Counsel of America, filed an amicus brief on behalf of Tyler at the U.S. Supreme Court. The ACLU argues that allowing the government to profit from the seizure of private property in this way is unconstitutional. The Fifth Amendment’s protections apply not only to real property but also to intangible property interests, such as an owner’s equity in her home. By not merely collecting what Tyler owed, but keeping the3 $25,000 surplus, the state took her property without just compensation, in violation of the Fifth Amendment.
In a unanimous decision, the Supreme Court found that Hennepin County violated the Takings Clause when it seized a taxpayers’ home, sold it, and retained the entire proceeds, far in excess of what the taxpayer owed.
Legal Documents
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03/02/2023
ACLU Amicus Brief on Behalf of Petitioner
Date Filed: 03/02/2023
Court: Supreme Court