Posted on 04/27/2023 2:42:56 PM PDT by nickcarraway
A win for Geraldine Tyler, who is now 94 years old, would be a win for property rights.
The Supreme Court on Wednesday heard arguments in a consequential case. The query before the justices: Was it unconstitutional when the government seized a woman's home over an unpaid tax bill, sold it for more than the amount of the debt, and then kept the profit?
It may sound like a slam dunk case. Over the last several years, it has not been. But yesterday's arguments provided both a glimmer of optimism for the state of property rights in the U.S., as well as a glimpse into how far the government will reach to defend its ability to violate those rights.
In 2010, Geraldine Tyler, who was in her early 80s, vacated her condominium in Hennepin County, Minnesota, after a series of local events, including a nearby shooting, left her wanting a safer environment. She was ultimately unable to afford both her new rent and her condo's property taxes, racking up a $2,300 overdue bill. Local officials added $13,000 in interest, penalties, and assorted fees. They then seized her home, sold it at auction for $40,000, and pocketed the remaining $25,000 surplus.
Multiple federal courts ruled against Tyler, who is now 94 years old, prior to her case's ascension to the Supreme Court yesterday. "Where state law recognizes no property interest in surplus proceeds from a tax foreclosure-sale conducted after adequate notice to the owner," wrote Judge Steven Colloton of the U.S. Court of Appeals for the 8th Circuit, "there is no unconstitutional taking."
That decision came down in February 2022. Christina M. Martin, a senior attorney at the Pacific Legal Foundation, sought to disabuse the high court's justices of that argument. "The county could have collected the debt without violating the Constitution by following the traditional common law rule still followed in most states and still followed in Minnesota in nearly every other debt collection circumstance," said Martin, who is representing Tyler. "Under that rule, the county should have taken the property, sold it, paid the debts from the proceeds, and refunded the remainder to Ms. Tyler. Instead, the county took everything."
It's a line of thinking the Court appeared receptive to. That became especially apparent when the justices questioned the attorney representing Hennepin County, Neal Katyal, who primarily invoked historical tradition to defend the county's right to steal Tyler's home equity.
"Are there any limits on that?" asked Justice Elena Kagan. "Take a $5,000 tax debt and a $5 million house, and the state says, thanks, we'll keep it." Katyal danced around the question until Justice Neil Gorsuch demanded a reply: "A $5 property tax, a million dollar property, good to go?" he asked.
Katyal responded that, yes, in effect, that was good to go.
It's not a hypothetical that requires an active imagination. After Tawanda Hall fell behind on the property taxes for her home in Oakland County, Michigan, the government sold it for more than $300,000, satisfied the tax burden, and kept the profit—which totaled over $286,000. "[I was] running around trying to find out who can I talk to, what can I do to stop this from happening?" she told me in January. "There was really no one there to work with us or help us or even tell us what route to go."
But it was history that Katyal primarily relied on, citing, among other things, the Statute of Gloucester, which was passed in 1278 by English Parliament. "The Statute of Gloucester was about lands owned by the feudal lord and what happens when a vassal fails to provide enough wheat to his lord and can his lands, which really belong to the lord, escheat to the lord," said Gorsuch. "And I just don't understand what on earth any of that history has to do with this case."
Kagan later echoed that: "If the mind rebels at the notion that the government can seize your $100,000 bank account and not give you back the $90,000 that you don't owe…why should…what was going on in 1200 or what was going on in 1776 change anything about that?"
Katyal also furnished a 1790 Virginia statute in making his case. When Justice Clarence Thomas inquired as to whether there was any example where it was used in a way similar to Tyler's, where the government kept the profit, Katyal replied that he had not looked for a formal case in which that had happened.
Of his inability to find a similar case, Thomas later said, "That's perhaps because [the statute] was never applied in the way that you suggest."
The core of Katyal's argument hinged on the idea that Tyler's property rights were "extinguished" when she fell behind on her taxes. It would seem that, at the least, the justices did not appear moved by that. "There were lots of great questions from the Court today," said Martin in a statement to Reason. "I hope that the Court will issue a decision holding that it is unconstitutional for the government to take more than it is owed."
An exchange toward the end of the oral arguments perhaps best epitomized Katyal's argument and the trouble it faced. Justice Amy Coney Barrett asked if the state would be justified in seizing someone's car over $20 of unpaid parking tickets. Katyal said no, because there "is no tradition that goes back that could be looked to."
"Well, there weren't cars then," Barrett replied.
?? Well, at least they are starting to be open that they see us as serfs.
If Kagan decides the wrong way, can Obama get a do over?
If it is unconstitutional, is it too late to have capital punishment for naughty bureaucrats?
They better hurry.. Geraldine isnt getting any younger.
Of his inability to find a similar case, Thomas later said, "That's perhaps because [the statute] was never applied in the way that you suggest."
Or he DID look, there aren't any, but rather than admit that he claims he 'didn't look'. How bad would the answer have to be to hide it with 'the dog ate my legal research' in front of SCOTUS??
In 2010, Geraldine Tyler, who was in her early 80s, vacated her condominium in Hennepin County, Minnesota, after a series of local events, including a nearby shooting, left her wanting a safer environment. She was ultimately unable to afford both her new rent and her condo’s property taxes, racking up a $2,300 overdue bill. Local officials added $13,000 in interest, penalties, and assorted fees. They then seized her home, sold it at auction for $40,000, and pocketed the remaining $25,000 surplus.
Seems to me I have seen this in the news before. Then there was also a charge of racism? Some distant relatives involved now because they can smell some money.
There is more to this story.
We now have a government run by highwaymen and privateers. If the SC rules against them, I imagine it might only be because nobody cut them in on a big enough share of the spoils.
Either he didn’t look, in which case, he’s a lazy idiot. Who doesn’t come overprepared to the Supreme Court. Who would search for a precedence from the Middle Ages, unless you had exhausted more relevant examples?
Its fun when you get a lawyer to tank his own case.
The Government is committing theft by any reasonable definition.
I also expect that if they can’t keep the profits then they will just put the homes they foreclose on for sale for the owed tax amount. They won’t even try to get what it is worth just to spite the homeowner.
So I would say it is better to sell before they take things away.
Would he have done better to have ignored precedence, and talked about “living documents,” and penumbras?
There are plenty of instances where they "legally" do that.
“They better hurry.. Geraldine isnt getting any younger.”
Her heir’s if any will be around for awhile.
In Florida they sell the debt. The homeowner then has something like three years to redeem it and to pay something like 18% interest.
Its gross state oveereach. If we believe in private property and ownership and such. It would be far more reasonable to work something out than take her property and then make a profit selling it. Most of what she owed the govt stskced on as penalties so its far more.
In this case govt needs to be slapped down as its acting in a tyrannical fshion when it doesn’t have to.
And in fact this case could have been avoided altogether if local government dealt with rising crime in her area effectively.
Then what?
They are generally sold at public auction, so that a fair market price can be had. Otherwise the clerks at the county assessor's office would be real estate magnates.
Agree with you. They shouldn’t take the property. In principle I say they shouldn’t tax people’s homes at all (though in this case it was a second home so to speak) but the amount owed would, in any other instance, be a “small claims case” - judgement could be entered and a lien placed. The state would eventually recover when the property was sold. And interest and fees should be reasonable; related to actual costs and prevailing market rates.
From what I could tell, the case emanates from a unique aspect of the foreclosure process under Minnesota law.
Under normal circumstances in most states, the property owner is entitled to keep any equity in the property that remains after a bank or tax authority seizes it in a foreclosure and pays off the expenses associated with seizing and selling it. In effect, the bank or government can't make a profit off the transfer.
Under Minnesota law, there are many points during the foreclosure process when the property owner can intervene on his or her behalf to remedy their default -- and they are even given an opportunity to pay off the debt under a 5 or 10 year period. At a specific point in the process in Minnesota -- after the debtor has refused to avail herself of any of these remedies -- it ceases to be a "foreclosure" and effectively becomes a property abandonment process. The Minnesota statutes governing the abandonment process date back to the 1880s when it was apparently common for farmers to abandon their Minnesota farms and move west to the Dakota territories and settle on new land given to them under the Homestead Act.
In this case, the Federal courts simply ruled that the foreclosure/abandonment process was governed by Minnesota law. Importantly, the courts ruled that the sale of the condo was not a violation of the "Takings Clause" for a clear legal/technical reason — in that the debtor no longer had any ownership claim on the property after they passed the specific point in the Minnesota process where it went from a "foreclosure" to an "abandonment."
See Post #18. The case is more comnplex than a simple foreclosure, and there’s a good reason why the plaintiff who lost her property in this “foreclosure” process hasn’t prevailed at any point in the trial or appeal process up to now.
“If it is unconstitutional, is it too late to have capital punishment for naughty bureaucrats?”
I think that’s up to the citizens.
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