The Supreme Court appears likely to give a 94-year-old Minneapolis woman another day to try to recoup some of the money after the county left the entire $40,000 after she sold her condominium for a small unpaid tax bill.
Justices Wednesday appeared to broadly agree with Geraldine Tyler’s lawyer’s argument that Hennepin County, Minnesota, violated the Constitution’s ban on taking private property without “just compensation.”
“Bottom line, he’s saying the county took his property and profited from his surplus equity. It’s his,” Justice Clarence Thomas said.
Tyler, who now lives in an apartment building for the elderly, owed $2,300 in taxes, plus nearly $13,000 in interest, penalties and costs when Hennepin County took title to the one-bedroom apartment in 2015. The county said he did nothing Retain his former residence.
The apartment, valued at $93,000, sold the following year for $40,000 — about $25,000 more than Tyler’s unpaid taxes, according to a Minnesota lawyer.
Justices Elena Kagan and Neil Gorsuch said the county’s position looked like it could seize millions of dollars in property for a small tax bill. “So $5 property tax, a million dollar property, good to go?” asked Neil Katyal, representing Gorsuch County.
Katyal basically said yes, noting that in 1956 the Supreme Court upheld New York City’s decision to keep a $65 water bill received for selling a property for $7,000.
In this case, Katyal said, Tyler made it clear that in five years he wanted nothing to do with the condo after the tax refund.
“Why on earth would Tyler walk out of his house? Because, we think, there was no equity in the house,” Katyal said. Judges can leave it to a lower court to sort out the details of the money.
Pacific Legal Foundation
The invocation of Magna Carta
Katyal specifically tried to appeal to conservative justices by referencing history dating back to 1272 and invoking the court’s recent ruling overturning Roe v. Wade and expanding gun rights.
History and tradition figured prominently in those blockbuster rulings, but Katyal failed to attract any conservative support in the court’s final arguments until the new term began in October.
“And I don’t see what any history of the world has to do with this case,” Gorsuch said.
Christina Martin, representing Tyler, went back even earlier than Katyal to make a fundamental point about fairness, saying that the 1215 Magna Carta spelled out “that a government cannot take more than it owes.”
The county can take more than it owes
Minnesota is among roughly a dozen states and the District of Columbia that allow local jurisdictions to retain additional money, according to the Pacific Legal Foundation, a nonprofit public interest law firm focused on property rights that represents Tyler on the Supreme Court.
According to Pacific Legal, at least 8,950 homes were sold for unpaid taxes between 2014 and 2021, and the former owners received little or nothing in those states.
The other states are: Alabama, Arizona, Colorado, Illinois, Maine, Massachusetts, Nebraska, New Jersey, New York, Oregon and South Dakota, the group said.
There is no explanation as to why Tyler stopped paying his property taxes after moving out of the condo where he had been living since 1999. He left for “health and safety” reasons, Pacific Legal said.
The county said in court papers that Tyler could have sold the property and kept what was left after paying the mortgage and taxes, refinanced his mortgage to pay the tax bill or signed up for a tax payment plan.
Instead, he did nothing for five years, the county said, until authorities followed state law and sold the condo. County wrote: Tyler believes “the Constitution requires the state to act as his real estate agent, sell the property on his behalf, and write a check for the difference between the tax debt and the fair market value.”
Lower courts sided with the county before the justices agreed to take action.
Minnesota and a handful of states and government associations are supporting the county, warning that the Supreme Court ruling could tie the hands of local governments that rely on property taxes.
But most of the support in court filings is with Tyler, including AARP, business groups, real estate interests and others who have gone through similar experiences.
A Massachusetts man described his ongoing battle with authorities over a $900 tax bill on a property worth at least $330,000 in a beach town on Cape Cod Bay. In a filing from New York, property tax attorney David Wilkes and legal services groups wrote that New York’s rules “go far beyond what the government has in place and go beyond appropriate deterrents for those homeowners who would ignore tax delinquencies.”
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 a strong case.
Tyler also raises a claim that Minnesota’s law violates the Eighth Amendment’s prohibition on excessive fines. But if the court rules in his favor based on the Fifth Amendment, it doesn’t have to decide another issue.
It wasn’t until 2019 that the Supreme Court ruled that the “additional fines” clause applies to states as well as the federal government.
A decision in Tyler v. Hennepin County, Minnesota, 22-166, is expected in late June.