Won: The Supreme Court held that government cannot keep windfall profits from tax foreclosures



As an elderly woman living alone, Geraldine Tyler was doing just fine in the one-bedroom condo she owned in Minneapolis. That is, until 2010, when a rise in neighborhood crime and frightening incidents near her home alarmed Geraldine and her family and prompted her to move to a safer area, where she rented an apartment in a senior community.

Finally, Geraldine felt safe and comfortable again, surrounded by other seniors. But the property taxes on her condo started piling up. Soon Geraldine accrued a $2,300 tax debt; and the government started tacking on thousands of dollars in interest, fees, and other penalties until the total bill reached $15,000 in 2015. At that point, Hennepin County, Minnesota, seized Geraldine’s condo and sold it one year later for $40,000. Instead of keeping the $15,000 it was owed and refunding Geraldine the sale surplus, the county kept all of the $40,000.

State law allows Minnesota counties to keep such windfalls at the expense of property owners like Geraldine. From 2014 to 2020, 1,200 Minnesotans lost their homes and all of the equity they had invested for debts that averaged 8% of the home’s value.

This is an egregious violation of fundamental property rights. Both the U.S. and Minnesota Constitutions say the government cannot take private property without giving owners just compensation. Home equity—the portion of a home’s market value that belongs to the homeowner after all debts on the property are subtracted—is private property and therefore just as protected as a home or land.

Both the U.S. and State Constitutions also prohibit the government from levying excessive fines—which Hennepin County violated by keeping the additional $25,000 from the condo sale, far above the $15,000 due.

In 2019, Geraldine filed a putative class action lawsuit against the county. But a federal district court dismissed her case in 2020, saying the very act of forfeiture wipes out an owner’s property interest. Geraldine didn’t give up. Pacific Legal Foundation helped her appeal the case to the Eighth Circuit Court of Appeals in 2021 and—after that court affirmed dismissal—petitioned the U.S. Supreme Court to review the case. In January 2023, the Court agreed to hear Geraldine’s case.

Oral arguments in Tyler v. Hennepin County were presented on April 26, 2023. At 94 years old, Geraldine was fighting not just for herself but for victims of home equity theft across the country. (For an inside look at how home equity theft hurts vulnerable families, watch PLF’s short documentary about the Mucciaccio family in Massachusetts, Where Hailey Lives.)

Pacific Legal Foundation represented Geraldine free of charge with the assistance of Charles Watkins of Guin, Stokes & Evans, LLC, and attorneys at Reinhardt Wendorf & Blanchfield and at Teske Katz, PLLP.

On May 25, 2023, the Supreme Court announced a unanimous decision in favor of Geraldine, ruling that home equity theft violates the Takings Clase of the Fifth Amendment. The Court explained that property rights are fundamental and cannot be erased by a state statute that redefines them out of existence. “The taxpayer must render unto Caesar what is Caesar’s,” Chief Justice John Roberts wrote in the decision, “but no more.”

What’s At Stake?

  • Government can take property to collect unpaid taxes, but taking more than it is owed is legalized home equity theft.
  • Home equity is private property. Delinquent property tax forfeiture neither wipes out equity nor relieves government’s obligation to pay just compensation.

Case Timeline

May 26, 2023
Supreme Court of the United States
April 12, 2023
February 27, 2023
January 13, 2023
August 19, 2022
Petition for Writ of Certiorari
United States Supreme Court
February 16, 2022
March 22, 2021


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