On Wednesday, the Supreme Court looked likely to give a 94-year-old Minneapolis woman another day in court to try to recover money after the county kept the full $40,000 when it sold her condominium for a small unpaid tax bill.
The justices appeared to largely agree with Geraldine Tyler’s attorney’s arguments that Hennepin County, Minnesota violated the Constitution’s ban on seizing private property without “just compensation”.
“Basically she is saying the county took her property and made a profit on her excess capital. It belongs to him,” Judge Clarence Thomas said.
Tyler, who now lives in a seniors’ apartment building, owed $2,300 in unpaid taxes, plus interest and penalties, when the county took title to the one-bedroom apartment in 2015. The County said she had done nothing to retain her one-time residency. The apartment is sold the following year.
Judges Elena Kagan and Neil Gorsuch said the county’s position appeared to be that it could seize million-dollar properties on tiny tax bills.
Neal Katyal, representing the county, said Tyler made it clear she wanted nothing to do with the condo in the five years she owed back taxes.
“Why the hell would she walk away from home? We believe the reason is that there was no equity in his house,” Katyal said. Judges could leave it to a lower court to sort out the details of the money.
Katyal tried to appeal to conservative judges in particular by referencing history and citing recent court decisions overturning Roe v. Wade and expanding gun rights.
But there appeared to be no takers in the court’s closing arguments until his new term began in October.
Minnesota is among about a dozen states and the District of Columbia that allow local courts to keep excess money, according to the Pacific Legal Foundation, which represents Tyler on the Supreme Court.
At least 8,950 homes have been sold due to unpaid taxes and previous owners received little or nothing in those states between 2014 and 2021, according to Pacific Legal, a nonprofit public interest law firm. profit centered on property rights.
The other states are: Alabama, Arizona, Colorado, Illinois, Maine, Massachusetts, Nebraska, New Jersey, New York, Oregon and South Dakota, the group said.
There was no explanation as to why Tyler stopped paying her property taxes when she moved out of the condo, where she had lived since 1999. She moved for “health and safety” reasons, a declared Pacific Legal.
The county said in court documents that Tyler could have sold the property and kept whatever was left over after he paid off the mortgage and taxes, refinanced his mortgage to pay the tax bill, or signed a tax payment plan.
Instead, she did nothing for five years, the county said, until authorities followed state law and sold the condo. The county wrote: Tyler believes “the Constitution required the state to act as his realtor, sell the property in his name, and write a check for the difference between the tax debt and the fair market value.”
The lower courts sided with the county before the judges agreed to intervene.
Minnesota and a handful of states and government associations are backing the county, warning that a Supreme Court ruling could tie the hands of local governments that rely on property taxes.
But the bulk of the support in the court cases is with Tyler, including AARP, business groups, real estate interests and others who have had experiences similar to his.
A Massachusetts man has described his ongoing struggle with authorities over a $900 tax bill on a property he says is worth at least $330,000 in a Cape Cod Bay beach town. In a New York filing, property tax attorney David Wilkes and legal services groups wrote that the New York rules “take much more than what is owed to the government and go far beyond a suitable deterrent for owners who ignore tax delinquency.”
The Biden administration told the court that Tyler’s claim that his property was taken without just compensation, in violation of the Fifth Amendment, is the strongest of its arguments.
Tyler also raises an allegation that the Minnesota law violates the Eighth Amendment prohibition on excessive fines. But if the court rules in his favor based on the Fifth Amendment, it wouldn’t have to decide the other issue.
It wasn’t until 2019 that the Supreme Court ruled that the “excessive fines” clause applied to states as well as the federal government.
A decision in Tyler v. Hennepin County, Minnesota, 22-166, is expected by the end of June.
