On April 26, the U.S. Supreme Court will hear argument in an important property-rights case – Tyler v. Hennepin County, Minnesota – involving home equity theft. Steve’s article provides information on the background of the case, the homeowner who brought the case, the relevant law, and an analysis of the parties’ arguments. The homeowner is represented by Pacific Legal Foundation, which has two other cases pending at the Supreme Court this term.
Geraldine Tyler – who is now 94 years old – owned a condominium but owed delinquent property taxes totaling $15,000 in taxes, penalties, costs, and interest. Hennepin County, Minnesota, foreclosed on the property and sold it for $40,000. But instead of returning the excess $25,000 to Tyler, the county kept the entire $40,000. Tyler sued the county, claiming the state’s confiscation of the entire value of her property (including her equity in her condo in excess of her tax debt) was an unconstitutional taking without the payment of “just compensation” under the Fifth Amendment and an excessive fine that violated the Eighth Amendment, but the district court dismissed her complaint, and the Eighth Circuit affirmed.
As Steve points out, the lower courts’ reasoning denying Tyler’s claim to “just compensation” under the Fifth Amendment – which essentially stated that Tyler is not entitled to relief because she has no property interest in her condo’s equity in that her equity was forfeited by operation of state law – is a sorites paradox that the Supreme Court should remedy.