WASHINGTON (CN) — A Minnesota county violated the rights of a 94-year-old woman when it took her property that was worth over double the tax debt she owed, the U.S. Supreme Court ruled on Thursday.
“A taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc than she owed,” Chief Justice John Roberts wrote for the unanimous court. “The taxpayer must render unto Caesar what is Caesar’s, but no more.”
Geraldine Tyler lived in her Hennepin County one-bedroom condominium for over a decade before her declining health forced the octogenarian to relocate to senior living in 2010. Unable to keep up with the property taxes on the condo after she moved, Tyler soon fall into delinquency.
Hennepin County confiscated Tyler’s property in 2015 to cover five years of her unpaid taxes. Tyler’s debts only totaled $15,000, but the county sold her condo for $40,000. Tyler claimed the discrepancy between the two numbers equaled a violation of her constitutional rights.
As well as alleging violations of the federal takings clause, Tyler sought to represent a class, accusing the county of imposing an excessive fine for her debts. A federal judge dismissed her 2019 case, however, and the Eighth Circuit affirmed, sending Tyler’s case to the high court.
During oral arguments in March, Hennepin County argued states should be able to settle debts how they see fit.
“The law here falls within a long tradition that stretches back before the republic and was present at the founding,” Neal Katyal with Hogan Lovells said during arguments.
Tyler claimed the county should be able to settle its debts without violating the Constitution.
“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,” Tyler's attorney Christina Martin with the Pacific Legal Foundation said during oral arguments.
Roberts agreed Thursday with Tyler, saying she had plausibly alleged a takings claim under the Fifth Amendment.
“The Takings Clause ‘was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole,’” Roberts wrote.
Hennepin County claimed Tyler did not suffer harm because there were potential encumbrances that exceeded the value of any interest she had in the home about the $15,000 tax debt. The court rejected this argument because the county never entered these records or submitted them to the court.
“Even if there were encumbrances on the home worth more than the surplus, Tyler still plausibly alleges a financial harm: The County has kept $25,000 that belongs to her,” Roberts wrote.
Sourcing the foundation of the law, Roberts went all the way back to 1215.
“The principle that a government may not take more from a taxpayer than she owes can trace its origins at least as far back as Runnymeade in 1215, where King John swore in the Magna Carta that when his sheriff or bailiff came to collect any debts owed him from a dead man, they could remove property ‘until the debt which is evident shall be fully paid to us; and the residue shall be left to the executors to fulfil (sic) the will of the deceased,’” Roberts wrote.
The court ruled in favor of Tyler, but it declined to decide if the fine she incurred violated the Eighth Amendment by qualifying as excessive. Since the court found Tyler had a claim under the Takings Clause, Roberts there was no need for the justices to go further.
“Because we find that Tyler has plausibly alleged a taking under the Fifth Amendment, and she agrees that relief under ‘the Takings Clause would fully remedy [her] harm,’ we need not decide whether she has also alleged an excessive fine under the Eighth Amendment,” Roberts wrote.
Justice Neil Gorsuch wrote a concurring opinion to which Justice Ketanji Brown Jackson joined. The Trump appointee wrote to offer lower courts guidance on similar claims under the Eighth Amendment even though the court’s opinion stopped short of doing so.
“Economic penalties imposed to deter willful noncompliance with the law are fines by any other name,” Gorsuch wrote. “And the Constitution has something to say about them: They cannot be excessive.”
Representatives for Hennepin County emphasized that their position represented the interests of Minnesota and other states with similar laws and that the court's ruling will require revisions to longstanding regulations.
"Counties in Minnesota have faithfully administered the state’s property forfeiture laws for well over a century," Dan Rogan, assistant county administrator and Hennepin County auditor, said in a statement. "Based on today's decision which found Minnesota's law unconstitutional, Minnesota’s property tax forfeiture laws must be revised. Hennepin County will work closely with the Minnesota Legislature to create a process that is consistent with the Supreme Court’s decision."
Martin did not immediately respond to a request for comments on the ruling.
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