Lawletter Vol  48 No. 3

SCOTUS: Government Cannot Sell House to Recover Unpaid Taxes and Keep the Excess

 Robert Westendorf—Research Attorney

      Ninety-four-year-old Geraldine Tyler lived in a condominium for more than a decade before moving to a senior community in 2010. Tyler v. Hennepin County, 143 S. Ct. 1369, 2023 U.S. LEXIS 2201, at *5-6 (May 25, 2023). Nobody paid the property taxes on the condo, and by 2015, $15,000 in unpaid taxes and penalties was owed. 2023 U.S. LEXIS 2201, at *6. Hennepin County seized the property and sold it for $40,000, thus extinguishing the $15,000 debt. If this had happened in one of 36 states, Tyler would have gotten the excess $25,000 back. Id. at *14. However, when property is sold due to the failure to pay taxes in Minnesota, proceeds in excess of the tax debt remain with the county. Id. at *5.

      Ms. Tyler brought suit, alleging violations of the Takings Clause of the Fifth Amendment and the Excessive Fines Clause of the Eighth Amendment. Id. at *6. The lower courts ruled against Ms. Tyler. The Supreme Court reversed. Id. at *6-22. Writing for a unanimous court, Chief Justice Roberts determined that Ms. Tyler had standing. Id. at *8. The Court then stated that the question was whether the $25,000 is “property under the Takings Clause, protected from uncompensated appropriation by the State.” Id. at *9. In determining what is property, the Court would look to traditional property law principles, historical practice, and the Court’s precedents. Id.