For three generations of Faytima Howard’s family, a house in Clinton Township, Michigan, was home. But after the house was damaged by a fire, they lost nearly everything. Howard faced challenges securing insurance money to cover the repairs and ultimately fell behind on her property taxes. That’s when her situation went from bad to worse.
Macomb County foreclosed on Howard’s property in 2023 for a tax debt of approximately $25,000. The county sold her home at auction for $499,007—nearly twenty times what she owed. Under the Constitution’s Takings Clause, as the Supreme Court confirmed in Tyler v. Hennepin County, the government must pay property owners for any excess value beyond the debt owed.
But Howard never saw a penny of her equity. Instead, Macomb County pocketed the entire windfall. Michigan’s statute requires property owners to file a notarized form within 92 days of foreclosure—weeks before the sale even occurs and before anyone knows whether surplus proceeds will exist. It’s a bureaucratic trap: claim money that doesn’t exist yet, or lose your right to it forever. Howard, like 95% of Michigan homeowners in tax foreclosure, couldn’t navigate this Kafka-esque process.
Howard filed a federal civil rights lawsuit seeking just compensation. Both the district court and the Sixth Circuit dismissed her case, relying on a 1956 Supreme Court decision called Nelson v. City of New York. These courts rubber-stamped Michigan’s scheme, holding there was no taking because the state provided a “procedure”—even though that procedure violates due process and could not possibly survive judicial scrutiny.
Howard is now asking the Supreme Court to end this legalized theft. State records reveal Michigan counties confiscated millions of dollars in homeowners’ equity in 2022 alone, with thirty counties paying nothing to former owners while enriching themselves.
Howard’s case could stop similar schemes in four other states: Alabama, Arizona, New Jersey, and New York. Across these states, governments exploit Nelson to pocket property owners’ life savings through procedural traps few can escape.
What’s At Stake?
- The government has a duty to provide just compensation when it takes private property to collect unpaid taxes. It cannot force property owners to chase down their own money through complicated processes that trap them into waiving their right to just compensation.
- A complicated government process for property owners to claim what’s theirs is not just. It’s merely a calculated way to take property without compensation.
