WASHINGTON — The Supreme Court on Thursday revived a 94-year-old woman’s claim that a Minnesota county violated the Constitution by keeping a $25,000 profit when it sold her home in a tax foreclosure.
The court unanimously concluded that Geraldine Tyler can pursue her claim that such seizures violate the Takings Clause of the Constitution’s Fifth Amendment, which requires the government to pay compensation when property is taken.
Chief Justice John Roberts wrote that Tyler made a plausible claim that should be allowed to go forward, noting in a reference to the Bible that taxpayers are only required to pay the government what it owes.
“The tax payer must render to Caesar the things that are Caesar’s, but no more,” he wrote.
Tyler’s home in Hennepin County, which includes the city of Minneapolis, was seized because she owed $15,000 in taxes and fees. But the county sold the house for $40,000 and kept all the proceeds, Tyler’s attorneys at the Pacific Legal Foundation say.
The conservative group, which often deals with property rights issues, calls the practice “home theft.” The court, which has a conservative 6-3 majority, is often sympathetic to property rights claims.
The Pacific Legal Foundation said in a report last year that a dozen states regularly allow a government to take more than it owes in taxes, and that other states have laws that may allow the practice in some circumstances. The remaining states return the excess proceeds when seized properties are sold.
Six states — Arizona, Colorado, Illinois, Montana, Nebraska and New Jersey — allow private investors to retain equity in properties once delinquent taxes are paid, the foundation says. Others allow the government to pocket the remaining equity when properties are sold.
Tyler bought the one-bedroom condo in the north Minneapolis neighborhood in 1999 and lived there for more than a decade. It was only after she had moved into a nursing home that she fell behind on her taxes from 2011.
The county seized the property in 2015, with Tyler owing $2,311 in taxes, as well as nearly $13,000 in related fees, including interest and penalties. A year later, the county sold it for $40,000, keeping the $25,000 in profit.
In Tyler’s case, the St. Louis-based 8th US Circuit Court of Appeals her claim in February 2022.
The state said in court papers that under Minnesota law, it “provides ample opportunity for property owners to protect their interests” before properties are seized. The owners have three years to pay the taxes and have the option to buy back the seized properties.
