A 94-Year-Old Lost Her Condo Over a Tax Debt and the Court Said Enough

What do you call it when the government takes a home worth $40,000 to collect a $15,000 debt, sells it, and keeps the other $25,000? The county that did it called it a tax foreclosure. The Supreme Court, in nine votes out of nine, called it a taking. And a small-town word for it, one you may have heard on a porch, is theft with a form number.

The case is Tyler v. Hennepin County, decided on May 25, 2023, and it deserves more attention than it got, for two reasons. It is a clean win for the oldest right conservatives defend, the right to own property and keep what it is worth. And it shows something rare in the Court these days: a decision where every justice, from the most liberal to the most conservative, signed on, because the principle was too plain to dispute.

This post follows the format of a case study. First the facts, then the question, the holding, the reasoning, the concurrence, and what followed.

The facts

Geraldine Tyler bought a one-bedroom condominium in Minneapolis in 1999. She lived there for years, and later, as she grew older, she moved to a senior apartment. She stopped paying the property taxes on the condominium, and the debt grew, as unpaid taxes do, with penalties and interest. By the time Hennepin County, Minnesota moved against the property, the total owed was roughly $15,000. Of that, only a fraction was the original tax. The rest was interest and penalties and the costs the law piled on top.

Under Minnesota law, the county took the property after the redemption period passed without payment. It then sold the condominium for about $40,000. The county kept all of it. The debt was roughly $15,000, and the surplus was about $25,000. Minnesota's statute let the county keep the whole sale price, and the county did.

Pause on that. Ms. Tyler, then in her nineties, lost a home worth far more than she owed. The state did not say she owed $40,000. It did not say the sale proceeds were a fine for a crime. It said that once the county had foreclosed, the property, and everything it could fetch, belonged to the government. The debt was a pretext for taking an asset.

She sued, with lawyers from a public-interest firm, arguing that keeping the surplus violated the Fifth Amendment's Takings Clause and the Eighth Amendment's ban on excessive fines. The lower courts threw out her claims, holding that Minnesota law gave her no property interest in the surplus. The Supreme Court took the case.

The question

The Fifth Amendment says, in its last clause: "nor shall private property be taken for public use, without just compensation." The question was whether a county that takes a home for unpaid taxes, sells it for more than the debt, and keeps the extra money has taken property without just compensation.

A related question lurked behind it. Who decides what counts as "property"? If a state can define a property right out of existence by writing a statute that says the owner has none, then the Takings Clause is a promise the legislature can cancel by drafting. That would be a strange kind of constitutional protection. The Constitution is meant to bind the legislatures.

The holding

The Court held that the county's practice was an unconstitutional taking. The vote was unanimous. Chief Justice John Roberts wrote the opinion. The Court held that a property owner has a protected property interest in the surplus value of a home that is sold to pay a tax debt, and a government that keeps that surplus must pay just compensation for it. The county could collect what was owed, with the interest and penalties the law permitted, and no more.

Let me put that in a sentence a person on a jury would use: you can take what I owe you, but you cannot take what I do not.

The reasoning

The Chief Justice's opinion is worth reading in full, because it is a model of how to reason from the history of the law. He did not start with a modern theory. He started with the oldest sources and walked forward.

First, the English roots. The Court traced the rule back through English law to Magna Carta in 1215. In that charter, the barons made the king promise that when the Crown's officers collected a dead man's debts, they could take his property only until the debt was paid, with the remainder going to his executors. The idea that the government may take enough to satisfy the debt, and that the remainder belongs to the owner, is hundreds of years older than the American republic. The opinion followed the principle through the centuries of English practice, including the common law's treatment of what happens when land is sold to satisfy a debt to the Crown.

Second, the American practice. The Court observed that the rule carried over into American practice and remained the general rule: it noted that thirty-six states and the federal government require the excess value to be returned to the taxpayer. A minority of states had laws like Minnesota's, but they were the exception.

Third, state law cannot define property away. This is the heart of it. Minnesota argued that its statute said the owner had no interest in the surplus after foreclosure, so there was nothing to take. The Court answered that a state may not transform private property into public property without compensation by the simple device of passing a law that says so. The Constitution, and the traditional rules of property it draws on, set a floor that the legislature may not go beneath. The Chief Justice put the principle in a line worth remembering. The taxpayer, he wrote, must render unto Caesar what is Caesar's, but no more.

Fourth, the cases the county relied on. Minnesota pointed to an earlier decision, Nelson v. City of New York from 1956, which had allowed a city to keep surplus proceeds from a tax foreclosure. The Court explained that Nelson turned on a procedural feature: under the law in that case, the owner had a chance to reclaim the surplus by following a set process, and he had failed to do so. It did not hold that a government may keep the surplus altogether. Where the law gave the owner nothing to claim, as in Minnesota, Nelson did not control.

The opinion is brief and clear. It does not announce a revolution. It applies an old rule to a new set of facts, and that is why it carried every vote.

The concurrence

Justice Neil Gorsuch wrote a separate concurrence, joined by Justice Ketanji Brown Jackson. Justice Gorsuch agreed with the Court's holding under the Takings Clause. He added that the Excessive Fines Clause of the Eighth Amendment, which says "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted," could have supplied a second and independent ground.

The reasoning goes like this. The Excessive Fines Clause limits the government's power to impose financial penalties. When a county takes a home worth $40,000 to cover a debt of $15,000, the extra $25,000 looks a good deal like a penalty, and a penalty so large relative to the wrong it answers may be unconstitutionally excessive. The majority did not decide the Eighth Amendment question, but Justice Gorsuch wrote that the lower courts' analysis contained mistakes, that a sanction that serves even partly to punish can be a fine, and that the fact some owners might get a windfall is legally irrelevant.

That is a point conservatives should make loudly. A government that treats a delinquent taxpayer as a source of revenue beyond the debt has created an incentive to foreclose. Every time the county can keep the surplus, the county profits from the default, which makes it the only business in America that does better the worse its customers do. The structure rewards the seizure and punishes the person seized.

What followed

Minnesota, and the other states with similar laws, had to rewrite them. A law that let a county keep the surplus was no longer enforceable after the decision. Other states with comparable provisions faced the same pressure. The details vary state by state, and if you live in one, the place to check is your own state's current statute on tax foreclosure, or your county treasurer's office. What is clear is that the people with the biggest stakes, the homeowners who might have lost far more than they owed, now have the protection of the Constitution's text.

The decision also opened new lawsuits. Many people whose homes had been sold in earlier years for more than the debt have claimed that they too are owed the surplus. How far back those claims can reach depends on statutes of limitations and the particular facts, and the courts have been sorting that out. I will not predict where each ends up.

Why the conservative should celebrate

There is no mystery about why this case belongs on a conservative site. Property is the foundation of the republic, as the founding generation understood. The Fifth Amendment, which the Founders added in the Bill of Rights, was James Madison's work, and Madison believed deeply in the protection of property. In a 1792 essay he argued that a just government secures to every man what is his own, and I have discussed the argument at length in Madison Wrote That Government Exists to Protect Property of Every Sort. A county that takes the surplus on a house is doing exactly what Madison's government is meant to prevent: taking what is a man's own and giving the proceeds to the public purse.

The Takings Clause binds the states, too. The Fourteenth Amendment makes the requirement of just compensation apply to state and local governments. That is why a county in Minnesota answers to the Fifth Amendment.

And the case belongs with a family of related ones. In Detroit Bulldozed Poletown for a Car Plant and Michigan Took 23 Years to Repent, a city bulldozed a neighborhood for a factory and the state's own court took more than two decades to say it was wrong. In Knick v. Scott Township Reopened the Federal Courthouse to Landowners, the Court made sure that a property owner who claims a taking can bring the claim in federal court without first exhausting every state process. Taken together, the three show the same trend: courts finally enforcing a clause that had been treated as a footnote.

Notice, too, the bipartisan character of the result. A unanimous Court is a rarity. The nine justices represent a range of approaches to constitutional interpretation, and they converged because the principle was older than the disagreement. It is a useful thing to point out the next time someone insists that the Court is only a collection of partisans. When the text and the history are clear, the justices have shown they can agree.

The strongest case for the county

A fair account should state the best argument for the other side.

The best case: A person who does not pay taxes imposes costs on everyone else, and the government has a legitimate interest in collecting them. Tax foreclosure laws give owners years of notice and chances to pay. By the time the county sells the property, the owner has had every opportunity to redeem it. Allowing the county to keep the surplus is an incentive for timely payment, a deterrent against abandonment, and a way of covering the cost of administering the process. A requirement to return the surplus adds paperwork and costs for small counties and invites disputes.

The answer, in order:

1. The county's interest is the debt. It may collect the tax, the interest and the penalties the law allows, and the costs of the sale. The Court's decision does not touch any of that.
2. A deterrent that takes more than the debt is a penalty, and a penalty needs its own justification. If the county wants to fine delinquent owners, it must do so openly under law subject to the Excessive Fines Clause, not hide the fine inside a sale.
3. The administrative burden is small. Most states and the federal government already return the surplus, and the process is not novel. A burden that every other jurisdiction manages is not a reason for a constitutional exemption. A county that can compute a penalty to the penny can find the stamp to mail a check.
4. The incentive problem cuts the other way. A county that profits from every default has an interest in seeing defaults happen. A rule that returns the surplus removes that interest and leaves collection as the only goal.
5. The people hurt are the ones who cannot defend themselves. A wealthy owner pays the bill or hires a lawyer. The elderly, the sick and the confused, the people most likely to fall behind, are the ones who lost their homes and their equity.

The case in brief

1. In Tyler v. Hennepin County, decided May 25, 2023, the Supreme Court unanimously held that a county that sells a home for unpaid taxes may not keep the surplus beyond the debt.
2. Geraldine Tyler's Minneapolis condominium was sold for about $40,000 over a debt of roughly $15,000, and the county kept the difference.
3. Chief Justice Roberts traced the rule back through English law to Magna Carta and held that a state cannot define property out of existence to avoid the Takings Clause. Justice Gorsuch, joined by Justice Jackson, added that the Excessive Fines Clause offered another ground.
4. The decision forced states with similar laws to rewrite them, and it joins Poletown and Knick in the story of courts taking the property clause seriously.
5. The government may collect what it is owed, and no more.

What you can do: look up your own state's tax foreclosure statute, or call your county treasurer's office, and ask in plain words what happens to the money from a sale beyond the debt.