WASHINGTON (AP) — The Supreme Court seemed likely Wednesday to give a 94-year-old Minneapolis woman another day in court to try to recoup some money after the county kept the entire $40,000 when it sold her condominium over a small unpaid tax bill.
The justices seemed in broad agreement with arguments by the lawyer for Geraldine Tyler that Hennepin County, Minnesota, violated the Constitution’s prohibition on the taking of private property without “just compensation.”
“At bottom, she’s saying the county took her property and made a profit on her surplus equity. It belongs to her,” Justice Clarence Thomas said.
Tyler, who now lives in an apartment building for older people, owed $2,300 in unpaid taxes, plus interest and penalties, when the county took title to the one-bedroom apartment in 2015. The county said she did nothing to hold onto her one-time residence. The apartment sold the next year.
Justices Elena Kagan and Neil Gorsuch said the county’s position appeared to be that it could seize million-dollar properties over tiny tax bills. “So a $5 property tax, a million dollar property, good to go?” Gorsuch asked Neal Katyal, representing the county.
Katyal essentially said yes, noting that the Supreme Court in 1956 upheld New York City’s decision to keep the $7,000 it received for selling a property it seized over a $65 water bill.
In this case, Katyal said, Tyler made clear she wanted nothing to do with the condo in the five years she owed back taxes.
“Why in the world would it be that Tyler walked away from her home? The reason, we think, is that there was no equity in the home,” Katyal said. The justices could leave it to a lower court to sort out the money details.
Katyal tried to appeal to the conservative justices in particular by references to history dating back to 1272 and the invocation of the court’s recent rulings overturning Roe v. Wade and expanding gun rights.
History and tradition figured prominently in those blockbuster rulings, but Katyal didn’t appear to attract any conservative support in the court’s final arguments until its new term begins in October.
“And I just don’t understand what on earth any of that history has to do with this case,” Gorsuch said.
Christina Martin, representing Tyler, went back even earlier than did Katyal to make a basic point about fairness, saying that the Magna Carta in 1215 spelled out “that the government could not take more than it was owed.”
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, a not-for-profit public interest law firm focused on property rights that represented 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.
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. 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.
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 Fifth Amendment, is the stronger of her arguments.
Tyler also is raising a claim that Minnesota’s law violates the Eighth Amendment’s prohibition on excessive fines. But if the court rules in her favor based on the Fifth Amendment, it wouldn’t have to decide the other issue.
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.
Copyright 2023 by the Associated Press. All Rights Reserved.
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