States rush to comply with Tyler decision

Pacific Legal Foundation’s Supreme Court victory in Tyler v. Hennepin County created a domino effect across the country. State by state, legislatures are banning home equity theft. Governments have realized that they face significant liability if they ignore the Supreme Court’s ruling that home equity theft is unconstitutional.  

In the New York State Assembly, a moratorium bill passed the Senate and the House which would pause most tax foreclosures to allow time to implement reforms in response to Tyler. Taxing jurisdictions face millions of dollars in potential liability if they foreclose in the absence of reform, so the goal of this moratorium is to prevent these liabilities from growing and allow time to craft more comprehensive legislation. 

Even more positive changes recently materialized for Nebraska property owners. Governor Jim Pillen signed LB727 into law, which abolishes home equity theft across the state. This bill was supported by PLF. Furthermore, the Tyler victory resulted in two other PLF Nebraska cases—Fair v. Continental Resources and Nieveen v. TAX 206—being sent back to the Nebraska Supreme Court for reconsideration in light of the new precedent. Learn more about these Nebraska victories here.  

Additionally, the Tyler victory has encouraged an abundance of class action lawsuits from homeowners who have had their property seized unjustly. Lawsuits seeking millions in damages have been filed in Minnesota and are likely to be filed soon in Massachusetts, Nebraska, and Arizona. Minnesota counties are reviewing the Tyler decision, but every day they delay exposes Minnesota counties to new liability. Every state that currently practices HET must stop stealing equity immediately and reform their tax foreclosure laws going forward. 

PLF has been helping state legislators comply with Tyler: On June 20, PLF policy director Daniel Dew testified in Ohio favor of HB153. The proposed bill would put an end to Ohio’s home equity theft loophole, which currently allows a local government to transfer a property to a political subdivision without a competitive bid. On June 22, PLF attorney Joshua Polk testified in Massachusetts in favor of S1876, which would end home equity theft in that state.  

While the Tyler ruling sets a new precedent for individuals to fight unjust tax schemes, only states—not the Supreme Court—can change their laws. In the case of home equity theft, those legislative changes appear to be happening swiftly. The first and most important battle is won; now it’s the small victories that bring justice to property owners.