Global Courant 2023-04-26 16:00:00
WASHINGTON — The Supreme Court on Wednesday weighs a 94-year-old woman’s claim that a Minnesota county violated the Constitution by withholding a $25,000 profit when it sold her home in a tax foreclosure sale.
Geraldine Tyler’s home in Hennepin County, which includes the city of Minneapolis, was seized because she owed $15,000 in taxes and fees. But the county sold the house for $40,000 and kept all proceeds, Tyler’s lawyers at the Pacific Legal Foundation say.
The conservative group, which often litigates issues related to property rights, calls the practice “surplus value theft” and is asking the Supreme Court to end it. The court, which has a 6-3 Conservative majority, is often sympathetic to property rights claims.
The Pacific Legal Foundation said in a report last year that a dozen states regularly allow the practice and that other states have laws on the books that could allow it under certain circumstances. The remaining states return the excess proceeds when a seized property is sold.
Six states — Arizona, Colorado, Illinois, Montana, Nebraska and New Jersey — allow private investors to retain equity in real estate once back taxes are paid, Pacific Legal Foundation says. Others allow the government to pocket the remaining equity when the property is sold.
Geraldine Tyler, center, lost her home to the county government for more than $15,000 in unpaid taxes and fees.Courtesy of Pacific Legal Foundation
The judges will decide whether such seizures violate the Fifth Amendment’s inclusion clause of the Constitution, which requires the government to pay compensation when property is seized. They will also consider whether government intervention could be seen as an excessive fine under the Constitution’s Eighth Amendment.
The case is the final plea of the Supreme Court’s term, which runs from October to June. Between now and the end of June, the judges will concentrate on ruling in the cases in which they have heard arguments. These include some potential blockbusters on affirmative action in college admissions, voting rights and religion.
Tyler purchased the one-bedroom apartment in a north Minneapolis neighborhood in 1999 and lived there for over a decade. It was only after she moved into a retirement home that she fell behind on her taxes as of 2011.
The county seized the property in 2015, owing Tyler $2,311 in taxes, plus nearly $13,000 in related fees, including interest and penalties. A year later, the county sold the property for $40,000, keeping the $25,000 profit.
In Tyler’s case, the St. Louis-based 8th US Circuit Court of Appeals rejected her claims in a February 2022 ruling.
The state says that under Minnesota law, it “provides property owners with adequate opportunity to protect their interests” before any property is seized. Owners have three years to pay the taxes and have the option to buy back the seized property.
In fact, Tyler argues that the Constitution “requires the state to serve as its real estate agent, sell the property on its behalf, and issue a check for the difference between the tax liability and fair market value,” according to the attorneys for the state. in court papers.
U.S. law has long established that local governments can seize overdue property as long as due process requirements are met, and compensation is never required, the lawyers argued.
