A full and perfect equivalent: Just Compensation and the Fifth Amendment
In the autumn of 2025, the Supreme Court granted certiorari in the first case since the 1980s to address the amount of “just compensation” the government is required by the Constitution to provide when it takes private property. In Pung v. Isabella County, Michigan, the government confiscated a family’s home for failing to pay a tax they were exempt from. The County took title to the Pung family’s home, worth $194,400, to collect approximately $2,200 that should not have been owed and sold it at auction for a fraction of its actual value.
The government kept every penny.
Mike Pung sued, and thanks to PLF’s prior constitutional wins, the trial court agreed that the confiscation was unconstitutional, and the government owed “just compensation” for the excess property taken. But rather than pay for the home, the County was required only to return the auction proceeds, minus the tax debt that was improperly imposed (but technically due)—about $74,000. The Supreme Court will soon decide whether this satisfies the Constitution’s Just Compensation Clause.
When deciding what the Constitution means, the Supreme Court tends to consider history and precedent—what the Court has said in prior cases addressing similar legal questions. Isabella County’s actions violate the historical understanding of the Fifth Amendment’s just compensation requirement.
Private property rights protect all other rights because our individual liberties “find[] tangible expression in property rights.” Without property rights, we would quickly lose all others. This is why the Framers included multiple property protections, including the Fifth Amendment, in the Bill of Rights.
The final clause of the Fifth Amendment—also known as the Takings Clause—says,
“…nor shall private property be taken for public use, without just compensation.”
When property is taken for public use, the government isn’t merely required to give compensation: It must give just compensation. But what exactly is just?
The Founders, relying on a classical view of justice, understood that one ought to be given what one is owed, whether that be restorative or punitive. If the government takes property, including to satisfy a debt, the harmed property owner must receive the “full and perfect equivalent in money of the property taken,” as the Supreme Court has explained. But the government has done the opposite in many cases.
This case follows in the footsteps of PLF’s 2023 case, Tyler v. Hennepin County, in which the Supreme Court unanimously held that the government violates the Takings Clause when it takes more than it is owed, when it is collecting a tax debt. Now in Pung, the Supreme Court will answer what constitutes just compensation when it violates that rule.
The Pung family.
Colonial history
Even though the colonists fled England, they venerated their birthright as English subjects, including Magna Carta.
The Great Charter, as professor and legal historian James Ely has described, “secured the rights of owners against arbitrary deprivation of property without due process of law.” Beginning with the Mayflower Compact, colonists united through social compacts to preserve these rights. Communities joined together, agreeing to work toward a shared goal, including the protection of private property—a right rooted in English common law.
For the colonists, “property and liberty were inseparable, as evidenced by the colonists’ willingness to break with England when the mother country threatened property ownership,” Ely said. Without property protections, all other rights suffer.
William Blackstone echoed similar themes in his legal Commentaries on the Laws of England, saying that personal security, personal liberty, and private property are the three absolute rights and liberties inherent to every honorable and just society.
Each person has the right to use and enjoy their property how they choose, without fear of the government seizing their land or diminishing its value, unless a law specifically says otherwise. The only caveat to this inherent right is that property may be taken for public use, provided that just compensation is paid promptly in return.
If private property is taken, the property owner is entitled to “a full indemnification (or compensation) and equivalent for the injury thereby sustained,” Blackstone wrote.
Arthur Lee—an American physician, diplomat, and political writer—repeated these sentiments: “The right of property is the guardian of every other right, and to deprive a people of this is in fact to deprive them of their liberty.”
Influenced by the colonial era, “Liberty and Property” became the motto of the Revolutionary War, James Ely wrote. The King of England’s disregard for property rights, and many others, fueled a revolution—one that birthed a new nation founded upon liberty and justice for all.
Early Court decisions
In 1789, Congress did not discuss the Fifth Amendment in detail. James Madison, known for his copious notes, did not record much discussion on the matter, let alone the meaning of what constitutes a taking and just compensation. But decisions in early American courts demonstrate the Founders’ understanding of the importance of private property.
As early as 1792, the U.S. Supreme Court said that it is “justifiable for the state to take private property from individuals” when public works are at issue. But the legislature is not permitted to interfere with private property by any means.
In 1795, the Circuit Court in Pennsylvania declared private property as the primary goal of an ordered society, striking down a state contract law as unconstitutional: “The preservation of property, then, is a primary object of the social compact, and, by the late constitution of Pennsylvania, was made a fundamental law.”
“From these passages it is evident; that the right of acquiring and possessing property, and having it protected, is one of the natural, inherent, and unalienable rights of man,” Justice William Paterson added.
This Pennsylvania case was one of the earliest decisions striking down a state law—and given that Pennsylvania’s constitution influenced the Bill of Rights, these are significant statements.
Justice Paterson also said that “no one can be called upon to surrender or sacrifice his whole property, real and personal, for the good of the community, without receiving a recompense in value.” When property is taken, the equivalent value must be given in return.
Commenting on just compensation, the U.S. Supreme Court said that “the principle of indemnification is deeply founded in natural justice.”
Within 10 years of the Constitution’s ratification, several integral court opinions at the state and national levels emphasized the significance of private property and just compensation—interpretations not confined to the 18th century alone.
Leading up to the post-Civil War era, the national government relied upon its police powers, claiming that property rights were subservient to the general welfare of the community. As the demographic of the Court evolved, some of the justices sacrificed private property protections in favor of economic gain. But one justice preserved the motto of the American Revolution.
Justice Joseph Story—an American lawyer, jurist, and politician who served on the Supreme Court from 1812 to 1845—upheld the inseparable connection between liberty and property. He advocated against government interference and championed private property rights at the expense of innovation and advancement.
Reconstruction and incorporation
Shortly after the Civil War ended, Congress added the Thirteenth, Fourteenth, and Fifteenth Amendments—also known as the “Reconstruction Amendments.” The Reconstruction era was characterized by restoring equality and removing barriers perpetuated by slavery.
Although the rights to life, liberty, property, and equality predate government, the Reconstruction Amendments expanded the prohibitions against the government, ensuring that all people are treated fairly and justly. The addition of the property and due process protections in the Fourteenth Amendment prohibit the federal government and the state governments, through incorporation, from interfering with the right to own and use private property:
“No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
This protection requires the states to protect private property. When property is taken for a public purpose, as allowed by the Fifth Amendment, the property owner must be given a fair legal process—one that accords with the rule of law and justice.
Prior to the Fourteenth Amendment, the Bill of Rights applied to the federal government, not the states. Since the ratification of the Fourteenth Amendment, the Supreme Court has held that the Fourteenth Amendment “incorporated” nearly all of the Bill of Rights. In other words, the Court has construed it to mean that state governments must adhere to the Bill of Rights, just like the federal government.
In 1897, the Supreme Court incorporated the first-ever portion of the Bill of Rights—the Just Compensation Clause of the Fifth Amendment. Chicago, Burlington & Quincy Railroad Company v. Chicago proved foundational for the definition of just compensation. When states take private property for public use, the states must pay just compensation.
Although a few other cases preceded Chicago, Burlington & Quincy Railroad Company, the Court’s decision affirmed that neither the state nor the national government could interfere with the fundamental right to private property.
Important Just Compensation Clause cases
Since the 19th century, there have been many important cases involving just compensation for a taking.
For example, in Monongahela Navigation Co. v. United States in 1893, the Court explained that just compensation represents the “full and perfect equivalent” of what the owner lost, not of what the government gained. Four years later, the Court incorporated a portion of the Bill of Rights for the first time, applying the Takings Clause of the Fifth Amendment against the states. In Chicago, Burlington & Quincy Railroad Co. v. Chicago, the Court emphasized the fundamental constitutional right to receive just compensation when the government takes property.
In 1910, the Supreme Court addressed a taking of land for the construction of a highway in Boston Chamber of Commerce v. City of Boston. Property owners, the Court explained, have the right to recover the fair market value of their land. The Constitution “merely requires that an owner of property taken should be paid for what is taken from him…the question is what has the owner lost, not what has the taker gained,” the Court said.
During the First and Second World Wars, the Supreme Court issued opinions that reiterated the holding of Monongahela Navigation Co.; for example, in 1922, the Court determined that when a regulation severely diminishes the value of private property, the government must give just compensation, which in that case—Pennsylvania Coal Co. v. Mahon—is equivalent to fair market value. One year later, the Court issued two opinions, holding that just compensation is the “full and perfect equivalent in money of the property taken” and, in the second case, the Court held that “the owner shall be put in as good a position pecuniarily as he would have been if his property had not been taken.”
In 1984, the Supreme Court addressed the amount of just compensation in United States v. 50 Acres of Land. Since then, the Court hasn’t addressed the Just Compensation Clause of the Fifth Amendment.
Now, over 40 years later, Pung v. Isabella County, Michigan, presents a unique opportunity for the Supreme Court to reconsider what constitutes just compensation and rule in favor of private property rights.
The Pungs’ former home.
The future of just compensation
Michigan counties have unconstitutionally taken home equity from thousands of Americans: confiscating homes, evicting residents, and failing to pay for the equity. PLF’s precedents have already allowed hundreds of owners to recover the surplus proceeds realized in the forced sale of their homes. But is that always “just compensation”?
In Pung, the surplus proceeds from a fire-sale auction are unjust.
As PLF and Phillip Ellison (co-counsel for Mike Pung) explain to the Supreme Court in Pung v. Isabella County, the Constitution requires fair market value for the taking of the Pung home. The government was not merely collecting a debt when it seized the Pung home; it engaged in unnecessary confiscation of property for a debt that should never have been imposed in the first place.
Even if that $2,200 debt was due to a technicality, the government should never have forced a $194,400 property into foreclosure.
Once the Pungs learned of the foreclosure judgment, they sought to save the family home, but the County fought them at every turn and then auctioned it for a fraction of its value.
Historically, debt collectors were forbidden from selling real estate to collect a debt if the debtor had personal property sufficient to cover the debt—and debt collectors could not act unfairly in foreclosing and selling the home. But Isabella County, like other Michigan counties, ignored those traditions, confiscated the home and sold it in a fire-sale auction.
At the time, Michigan law authorized such home equity theft. Now that the Supreme Court has recognized that such confiscation is unconstitutional, it is not enough for the government to return its ill-gotten gains from a poorly run auction. Isabella County must give the Pung family the fair market value of their property because that is what the Just Compensation Clause demands in this case.
Since 2019, PLF has dedicated its efforts to eradicating home equity theft in all its forms and ensuring that all property owners receive the surplus value of their homes. This case is another installment of this initiative—and hopefully, the Court will rule in favor of private property rights.
Based on a rich constitutional history, the Fifth Amendment ensures that a property owner receives a full and perfect equivalent in money for what they lost. When someone’s property is taken, they must be put in a position as good as if the government had not taken their property.
This term, Phillip Ellison and PLF are representing the Pung family at the Supreme Court, seeking to uphold the rich history of private property protections and to restore property that was unconstitutionally taken.
