We Are Taking Your House and Keeping the Change

Sometimes you truly wonder why a case has to be decided by the highest court in the land.  I mean the facts are so compelling; can there really be a legal issue?

The Supreme Court handed down Tyler v Hennepin County, ____ US ____, (No. 22-166, May 25, 2023) last week.  The facts were that Geraldine Tyler, who was 94, owned a condominium that accumulated about $15,000 in unpaid real estate taxes along with interest and penalties.  Actually, the amount of unpaid taxes was $2,300.  The interest and penalties were $13,000.  The County sold it for $40,000, keeping the $25,000 excess over Tyler’s tax debt for itself.

Tyler alleged a claim under the Takings Clause.

The County defended by alleging that Ms. Tyler had no standing to bring her taking claim.  It asserted that to bring suit, a plaintiff must plead an injury in fact attributable to the defendant’s conduct and redressable by the Court.

The Supreme Court held that Ms. Tyler need not definitely prove her injury or dispute the County’s defenses.  She has plausibly pleaded she suffered financial harm from the County’s action.

The Court stated that the County could not use the toehold of the tax debt to confiscate more property than was due.  By doing so, it effected a “classic taking in which the government directly appropriates private property for its own use.”

The decision got really interesting when it went back in history, writing, the principal that a government may not take more from a taxpayer than she owes can trace its origins at least as far back as Runnymeade in 1215, where King John swore in the Magna Carta that when his sheriff or bailiff came to collect any debts owed him from a dead man, they could remove property “until the debt which is evident shall be fully paid to us; and the residue shall be left to the executors to fulfil the will of the deceased.’’  W. McKechine, Magna Carta, A Commentary on the Great of King John, ch. 26, p. 322 (rev. 2d ed. 1914) (footnote omitted).

The Court finally held that, the Takings Clause “was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”  Armstrong, 364 U.S., at 49.  A taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc that she owed.  The taxpayer must render unto Caesar what is Caesar’s, but no more.

Because we find that Tyler has plausibly alleged a taking under the Fifth Amendment, and she agrees that relief under “the Takings Clause would fully remedy [her] harm,” we need not decide whether she has also alleged an excessive fine under the Eighth Amendment.

Posted in Fourteenth Amendment, Takings Clause, Tax Seizure
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