The Columbus, Ohio-based Buckeye Institute filed an amicus brief with the U.S. Supreme Court on Thursday defending Minnesota widow Geraldine Tyler’s right to the profit from the forced sale of her home.
Tyler’s one-bedroom Minneapolis condominium was taken and sold by Hennepin County after the elderly resident could no longer afford her real estate taxes. She quickly moved out of the condo in 2010, determining she could not safely stay in light of rising violent crime. For five years she incurred tax debt on the original residence while paying rent on a new apartment.
After her tax debt, including interest and penalties, reached $15,000 in 2015, the county seized her condo, sold it a year later and pocketed the entire $40,000 the new buyer paid for it. Believing that the government violated the federal Constitution’s Eighth Amendment guarantee against excessive fines and its Fifth Amendment assurance against property seizure without proper compensation, as well as provisions of the Minnesota Constitution, the California-based Pacific Legal Foundation took up Tyler’s case. The organization is also arguing on behalf of “all others similarly situated.”
According to the foundation, between 2014 and 2020, about 1,200 Minnesotans lost their homes and all associated equity for debts that averaged out to just eight percent of the properties’ value. PLF has said this practice amounts to “home equity theft.”
Buckeye, long concerned with similar government actions in its home state and across the region, agreed with the foundation and issued its own brief in support of Tyler jointly with the D.C.-based Competitive Enterprise Institute (CEI).
“The idea that the government can take property only when it provides ‘just compensation’ to the owner is a principle that goes back more than 800 years to Magna Carta and one which our Founding Fathers embraced,” Jay R. Carson, senior litigator at the Buckeye Institute’s Legal Center, said in a statement. “By pocketing $25,000 in profits from the sale of Ms. Tyler’s home, Hennepin County has robbed Ms. Tyler of her home’s equity, plain and simple.”
Buckeye has raised its voice in favor of property owners facing similar situations a number of times. In 2017, the institute filed an amicus brief supporting litigation filed by Wayside Church in Van Buren County, Michigan.
After the church failed to pay its property taxes on a tract of land used as a youth camp, the county seized and sold the property, keeping all of the nearly $200,000 in surplus proceeds. After lower courts ruled against Wayside, federal Supreme Court eventually decided not to hear the church’s appeal.
In 2020, the think tank filed a similar friend-of-the-court brief in the nation’s high court in a Cuyahoga County case also handled by PFL. In that tax-related foreclosure case, attorneys for Elliot Feltner argued that the county acted illegitimately in taking more than twice his $65,000 property tax debt once his commercial tract was seized and sold. In February 2021, the Supreme Court declined to hear that case.
Dan Greenberg, an attorney for CEI, hopes this case will mark a turning point for indebted property owners in the region for whom foreclosures may be appropriate but who he says are nevertheless entitled to net profits after their taxes are paid.
“For the last few years, the government of Minnesota has overcompensated itself by taking the entire proceeds of land and property sales, resulting from unpaid debts, from hundreds of property owners,” he said in a statement. “This is an outrageous practice that is incompatible with constitutional prohibitions against excessive fines and against takings for public use without just compensation.”
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