News Release
March 3, 2023
ALF Brief Opposes Governmental
"Home Equity Theft"

Issue To Be Decided:

Whether a local government violates the Constitution's Just Compensation Clause when it keeps the surplus proceeds from sale of a home that it seizes to collect a delinquent property tax debt

Regardless of how characterized, the Minnesota tax forfeiture scheme violates the Just Compensation Clause and, unchecked, threatens the very concept of private property, as it signals to States that they may appropriate with impunity private property through the simple process of legislating away the
private property right.

— Atlantic Legal Foundation
The Atlantic Legal Foundation, which long has advocated for protection of private property from unconstitutional governmental intrusion, has filed an amicus brief urging the Supreme Court to hold that a state or local government may not seize and sell private property to satisfy a delinquent tax debt, and then keep the surplus proceeds, without paying "just compensation" to the homeowner.

ALF's brief, filed in Tyler v. Hennepin County, Minnesota, No. 22-166, was co-authored by ALF Advisory Council member Nancie Marzulla, who is a nationally recognized expert on Takings and related property law issues, and ALF Executive Vice President & General Counsel Larry Ebner.

Case Background

Petitioner Tyler, a 94 year-old woman, owed $15,000 in local property taxes and related penalties in connection with an abandoned condominium. In accordance with state tax-lien statutes, the County seized the property, sold it for $40,000, and retained the $25,000 surplus. The Eighth Circuit rejected Tyler’s contention that the County’s refusal to return the surplus was a taking of private property without just compensation in violation of the Constitution's Fifth and Fourteenth Amendments. The Supreme Court has granted certiorari to resolve a split of authority on whether a governmental entity must pay just compensation when it seizes and sells property to collect a debt and keeps the surplus.

ALF's Amicus Brief

ALF’s brief supports Tyler's contention that the Minnesota statute authorizing the County to retain the profits from selling seized property to satisfy a tax debt (analogous to statutory schemes in 13 additional States) violates the Fifth Amendment’s Takings Clause (also known as the Just Compensation Clause), which is applicable to States through the Fourteenth Amendment.

The brief argues, consistent with Supreme Court precedent, that a State may not circumvent the Just Compensation Clause by attempting to “redefine” private property as public property.

The brief also explains that the Eighth Circuit’s opinion mischaracterizes Supreme Court precedent on seizure and sale of private property to satisfy debts owed to the government by confusing a right to redeem seized property with the inability to obtain the surplus proceeds from sale of the property.
Media Contact: Larry Ebner | Tel: 202-349-1421
About the Atlantic Legal Foundation

For more than 45 years, the Atlantic Legal Foundation, a national, nonprofit, nonpartisan, public interest law firm, has advocated in the Supreme Court, federal courts of appeals, and state appellate courts for individual liberty, free enterprise, property rights, limited & responsible government, sound science in judicial & regulatory proceedings, and effective education, including parental rights and school choice.
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