Geraldine Tyler, a 93‐year‐old woman on a very limited income, owned a condominium in the Minneapolis area. When she was unable to pay her $2,300 property tax bill, which eventually turned into nearly $12,700 with interest and fees, Hennepin County seized and sold her property to pay the bill. Yet rather than just keeping the $12,700 that was owed and returning the rest, the county kept the entire $40,000 from the sale. Minnesota is one of 14 states that allows itself to take full title and equity from a tax sale, no matter how small the amount of taxes due or how large the amount of equity. This practice often impacts the poor and elderly who own their homes free of a mortgage but do not have enough discretionary income to pay property taxes, so stories of clear injustices are common.
For example, a Michigan family underpaid their property taxes by $144, spurring Wayne County (Detroit) to take two homes and sell them for $108,000, with the county pocketing the entire amount. In this instance, Ms. Tyler sued, arguing that the county unconstitutionally took her property without just compensation in violation of the Fifth Amendment’s Takings Clause. The U.S. Court of Appeals for the Eighth Circuit affirmed the district court’s dismissal of her case because Minnesota law declared that the home equity was not Ms. Tyler’s private property and so there was no taking. The Supreme Court agreed to take her case and address two questions: (1) whether taking and selling a home to satisfy a debt to the government, and keeping the surplus value as a windfall, violates the Takings Clause; and, (2), whether the forfeiture of property worth far more than needed to satisfy a debt (plus interest, penalties, and costs), is an excessive fine within the meaning of the Eighth Amendment.
The Manhattan Institute filed an amicus brief in September 2022 supporting the Supreme Court petition in the companion case Fair v. Continental Resources, which raises the same legal issues out of Nebraska and is being held pending the outcome here. Now, the Manhattan Institute joins five other organizations on a brief supporting Ms. Tyler. We present an historical argument that (1) Magna Carta and colonial law established the just-compensation requirement; (2) the Framers and succeeding generations held the requirement to be categorical and fundamental; (3) English and American law have long recognized that the government—if it takes at all—may take no more than is necessary; and (4) subsequent developments establish that equity in land is a form of personal property. Tyler v. Hennepin County will be argued April 26.
Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.
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