Supreme Court Case Challenges Government Ability To Sell Your House and Keep Profits

Katie Mahoney and Rev. Pat Mahoney of The Stanton Public Policy Center, Peggy Nienaber of Faith and Liberty and Mark Lee Dickson of Right to Life East Texas pray in front of the U.S. Supreme Court on April 21, 2023 in Washington, DC. Organized by Mahoney and the Purple Sash Revolution, the small group of demonstrators called on the Supreme Court to affirm Federal District Court Judge Matthew Kacsmaryk's ruling that suspends the Food and Drug Administration's approval of the abortion pill mifepristone

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Can the government foreclose on your house for unpaid taxes, sell it off, and keep all the profits? That’s now up to the Supreme Court.

After authorities in Hennepin County, Minnesota, seized the home of 94-year-old Geraldine Tyler for more than $2,300 in unpaid property taxes, they sold it for $40,000 and kept the surplus after settling $12,700 in penalties and interest. Now, the Supreme Court is deciding whether governments should be allowed to do that. 

The court heard oral arguments Wednesday in the case of Tyler vs. Hennepin County, which challenges governments’ authority to keep the money they get from selling homes they seize through tax lien foreclosures beyond the amount of taxes and penalties the homeowner owed.

The case could end a practice the Pacific Legal Foundation (PLF), an advocacy group representing Tyler, calls “home equity theft,” which is currently allowed in 12 states plus Washington D.C. A PLF analysis of 6,200 homes seized in this way found that those homeowners lost more than $860 million in wealth above what they owed in tax debt, assuming the homes would sell at fair market value. 

The justices spent most of the hour-long session grilling Neal Katyal, the attorney for Hennepin County, who argued that Tyler lost any claim to the value in her home after she failed to pay taxes on her Minneapolis condo for years. 

In one exchange, Justice Neil Gorsuch appeared incredulous that the county cited a medieval English law called the Statute of Gloucester to bolster the county’s case.

“The statue of Gloucester was about lands owned by the feudal lord and what happens when a vassal fails to provide enough wheat to his lord,” Gorsuch said. “I just don't understand what on earth any of that history has to do with this case.”

The court could issue a ruling on the case any time before late June or early July, when the courts’ summer recess usually begins.

Correction—May 25, 2023: A previous version of this article misspelled the plaintiff's name. It's Geraldine Tyler.

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  1. Supreme Court. "Petitioner's Reply, Tyler vs. Hennepin County."

  2. Supreme Court. "Case for Argument Today, Wednesday, April 26, 2023."

  3. Pacific Legal Foundation. "94-year-old grandmother fights home equity theft in Minnesota"

  4. Supreme Court. "The Supreme Court and Its Procedures."

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