The Supreme Court on Thursday ruled in favor of a 94-year-old woman who challenged a Minnesota county that seized and sold her condo to pay off her tax debt and then kept a $25,000 profit.
In a unanimous ruling, the justices said Hennepin County violated the U.S. Constitution’s Takings Clause, which prohibits the government from taking property without just compensation.
Geraldine Tyler lost her condo in a dispute with county officials after she owed $15,000 in property taxes. She had purchased it in 1999 but moved into a senior living facility in 2010. After moving out, she did not pay taxes on the property.
The county foreclosed on the condo, sold it for $40,000 and kept all the money instead of returning the $25,000 left over after the $15,000 tax debt was paid.
Ms. Tyler lost her initial challenge in lower court, prompting her to take the dispute to the high court.
On Thursday, the high court sided with her, effectively ruling Minnesota’s law on real property debt unconstitutional.
“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 than she owed. The taxpayer must render unto Caesar what is Caesar’s, but no more,” Chief Justice John G. Roberts Jr. wrote for the court.
At issue was Minnesota’s law that lets the government take a property to satisfy a debt and keep the surplus. About a dozen other states operate similarly, but most of them typically return a surplus to the taxpayer once all debts are paid.
Chief Justice Roberts said in the unanimous opinion that governments have historically returned any surplus to the taxpayer, dating back to the 1200s in England.
“Thirty-six States and the Federal Government require that the excess value be returned to the taxpayer,” he wrote in the 17-page opinion.
Chief Justice Roberts also said case law is on Ms. Tyler’s side, noting that the failure to pay taxes doesn’t mean the property was abandoned.
The high court noted that Minnesota gives taxpayers the surplus when satisfying debt on income tax and personal property like a car, reasoning that real property shouldn’t be treated differently.
Justice Neil M. Gorsuch, joined by Justice Ketanji Brown Jackson, agreed with the court’s ruling but wrote separately to say the court also could have found the taking of the surplus $25,000 to infringe on the Eighth Amendment’s prohibition on excessive fines.
“Economic penalties imposed to deter willful noncompliance with the law are fines by any other name. And the Constitution has something to say about them: They cannot be excessive,” Justice Gorsuch wrote.
Christina Martin, an attorney with Pacific Legal Foundation who represented Ms. Tyler, said the ruling was a victory for property rights.
“This decision 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,” she said.
A spokesperson from Hennepin County did not immediately respond to a request for comment.
The case was Tyler v. Hennepin County.
• Alex Swoyer can be reached at aswoyer@washingtontimes.com.
Please read our comment policy before commenting.