Geraldine Tyler, now 94, lost her one-bedroom condo in Minneapolis over $2,300 in unpaid taxes, plus interest and penalties. Hennepin County sold the apartment for $40,000 and kept every penny.
Tyler's lawyers say the county violated constitutional protections against having property taken without “just compensation” and excessive fines. The Supreme Court, which hears arguments Wednesday, will decide.
Minnesota is among roughly a dozen states and the District of Columbia that allow local jurisdictions to keep the excess money, according to the Pacific Legal Foundation, which is representing Tyler at the Supreme Court.
At least 8,950 homes were sold because of unpaid taxes and the former owners received little or nothing in those states between 2014 and 2021, according to Pacific Legal, a not-for-profit public interest law firm focused on property rights.
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Other states are: Alabama, Arizona, Colorado, Illinois, Maine, Massachusetts, Nebraska, New Jersey, New York, Oregon and South Dakota, the group said.
There has been no explanation about why Tyler stopped paying her property taxes when she moved from the condo, where she had lived since 1999, to an apartment building for older people in 2010. She moved for “health and safety” reasons, Pacific Legal said.
The county said in court papers that Tyler could have sold the property and kept whatever was left after paying off the mortgage and taxes, refinanced her mortgage to pay the tax bill or signed up for a tax payment plan.
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Instead, she did nothing for five years, the county said, until after authorities followed state law and sold the condo. The county wrote: Tyler believes "the Constitution required the State to serve as her real estate agent, sell the property on her 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 step in.
Minnesota and a handful of states and government associations are backing the county, warning that a Supreme Court ruling could tie the hands of local governments that rely on property taxes.
But the bulk of support in court filings is with Tyler, including AARP, business groups, real estate interests and other people who have gone through experiences similar to hers.
A Massachusetts man described his ongoing fight with authorities over a tax bill of $900 on a property he says is 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 “excessively takes far more than what is due to the government and go well beyond an appropriate deterrent to those homeowners who would ignore a tax delinquency.”
The Biden administration told the court that Tyler's claim that her property was taken without just compensation, in violation of the 5th amendment, is the stronger of her arguments. The justices should reject the claim that Minnesota's law violates the 8th amendment's prohibition on excessive fines, Solicitor General Elizabeth Prelogar wrote.
Not until 2019 did the Supreme Court rule that the “excessive fines” clause applied to the states as well as the federal government.
A decision in Tyler v. Hennepin County, Minnesota, 22-166, is expected by late June.
