The Supreme Court unanimously sided on Thursday with a 94-year-old grandmother from Minnesota who lost her home due to foreclosure and subsequently lost the equity she had in the property that exceeded the amount of taxes she owed.
Hennepin County sold Geraldine Tyler‘s condo at an auction for $40,000 after her home was seized for failure to pay taxes. Rather than returning the $25,000 difference between the sales price and what she owed, the county kept the balance and used the additional funds for public amenities, a move Tyler alleged reflected a government “taking” that violated her Fifth Amendment rights.
The justices, led in an opinion by Chief Justice John Roberts, decided that the county violated Tyler’s constitutional rights by taking her property without paying “just compensation.”
“The taxpayer must render unto Caesar what is Caesar’s, but not more,” Roberts wrote for the unanimous court.
“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,” he added.
Tyler moved from her one-bedroom Minneapolis condo into an apartment in a senior community in 2010. By 2015, she had accrued a $2,300 tax debt on that condo, which compounded to $15,000 after fees, interest, and penalties, resulting in Hennepin County seizing her property, according to Pacific Legal Foundation, the firm representing her.
Rather than giving back surplus profits from the $40,000 sale, the county kept the additional $25,000 on top of her debt despite her home once being valued at $93,000.
PLF attorneys say nearly a dozen states have similar laws to Minnesota’s and that those laws can significantly impede seniors struggling to pay property taxes post-retirement.
County officials argued Tyler was given five years to pay the taxes or sell the property, adding Tyler could have recouped the surplus money, a point to their argument that she lacked standing to sue.
But the majority held that Tyler’s claim “constitutes a classic pocketbook injury sufficient to give her standing.”
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In a separate concurrence, Justices Neil Gorsuch and Ketanji Brown Jackson noted Tyler’s claim that the state violated the excessive fine clause of the Eighth Amendment of the Constitution, which bans the government from imposing unduly harsh fines for a crime.
“Economic penalties imposed to deter willful noncompliance with the law are fines by any other name,” they wrote, finding the law also favors Tyler’s claim in that regard. “And the Constitution has something to say about them: They cannot be excessive.”
