On May 25, 2023 the U.S. Supreme Court issued a ruling in the Tyler vs. Hennepin County case. The Supreme Court unanimously ruled that Hennepin County violated the 5th Amendment Takings Clause when it confiscated, sold and kept the entire amount of the sale. The $25,000 of Ms. Tyler’s equity was kept by the goverment when it was sold.
The Pacific Legal Foundation argued that a longstanding principle is that the government may not take from a taxpayer more than is owed. This concept is rooted in English law and its origin goes back as far back as the Maga Carta. In this case Hennepin County sold Ms. Tyler’s property and kept the amount for delinquent taxes, interest and fines AND the equity in the property.
Common Sense Questons by two Justices
During the oral arguments; two justices had questions that I believe put it into perspective. Justice Kagan asked, If you had a $10,000 income tax bill due, and the government came in and took your $100,000 bank account and didn’t give you the $90,000 back, Is that a taking? Good job Justice Kagan. A little later, Justice Barret asked. What about the hypothetical if you owe, like, $20 of parking tickets? Can the state just take your whole car? Very well said.
Fortunately after considering both sides, On May 25, 2023, the Supreme Court ruled unanimously in favor of Geraldine Tyler that Hennepin county violated the Takings clause. Chief Justice Roberts wrote in the unanimous decision, “The taxpayer must render unto Ceasar what is Caesar’s, but no more.”
This ruling will have a profound impact on many states across the county, especially those that take homeowner’s equity when they are delinquent on their property taxes. Unfortunately Arizona is one of those states that after a 3 year redemption period allow investors to file a judicial foreclosure and take the property and the equity. It will be interesting to how local governments adjust to this new Supreme Court ruling that attempts to protect home owner’s equity from greedy governments. Congratulations goes to the Pacific Legal Foundation for representing Geraldine Tyler in this case.