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SUPREME COURT OF THE UNITED STATES
_________________
No. 22–166
_________________
GERALDINE TYLER, PETITIONER
v. HENNEPIN
COUNTY, MINNESOTA, et al.
on writ of certiorari to the united states
court of appeals for the eighth circuit
[May 25, 2023]
Chief Justice Roberts delivered the opinion of
the Court.
Hennepin County, Minnesota, sold Geraldine
Tyler’s home for $40,000 to satisfy a $15,000 tax bill. Instead of
returning the remaining $25,000, the County kept it for itself. The
question presented is whether this constituted a taking of property
without just compensation, in violation of the Fifth Amendment.
I
Hennepin County imposes an annual tax on real
property. Minn. Stat. §273.01 (2022). The taxpayer has one year to
pay before the taxes become delinquent. §279.02. If she does not
timely pay, the tax accrues interest and penalties, and the County
obtains a judgment against the property, transferring limited title
to the State. See §§279.03, 279.18, 280.01. The delinquent taxpayer
then has three years to redeem the property and regain title by
paying all the taxes and late fees. §§281.17(a), 281.18. During
this time, the taxpayer remains the beneficial owner of the
property and can continue to live in her home. See §281.70. But if
at the end of three years the bill has not been paid, absolute
title vests in the State, and the tax debt is extinguished.
§§281.18, 282.07. The State may keep the property for public use or
sell it to a private party. §282.01 subds. 1a, 3. If the property
is sold, any proceeds in excess of the tax debt and the costs of
the sale remain with the County, to be split between it, the town,
and the school district. §282.08. The former owner has no
opportunity to recover this surplus.
Geraldine Tyler is 94 years old. In 1999, she
bought a one-bedroom condominium in Minneapolis and lived alone
there for more than a decade. But as Tyler aged, she and her family
decided that she would be safer in a senior community, so they
moved her to one in 2010. Nobody paid the property taxes on the
condo in Tyler’s absence and, by 2015, it had accumulated about
$2300 in unpaid taxes and $13,000 in interest and penalties. Acting
under Minnesota’s forfeiture procedures, Hennepin County seized the
condo and sold it for $40,000, extinguishing the $15,000 debt. App.
5. The County kept the remaining $25,000 for its own use.
Tyler filed a putative class action against
Hennepin County and its officials, asserting that the County had
unconstitutionally retained the excess value of her home above her
tax debt. As relevant, she brought claims under the Takings Clause
of the Fifth Amendment and the Excessive Fines Clause of the Eighth
Amendment.
The District Court dismissed the suit for
failure to state a claim. 505 F. Supp. 3d 879, 883 (Minn.
2020). The Eighth Circuit affirmed. 26 F. 4th 789, 790 (2022).
It held that “[w]here state law recognizes no property interest in
surplus proceeds from a tax-foreclosure sale conducted after
adequate notice to the owner, there is no unconstitutional taking.”
Id., at 793. The court also rejected Tyler’s claim under the
Excessive Fines Clause, adopting the District Court’s reasoning
that the forfeiture was not a fine because it was intended to
remedy the State’s tax losses, not to punish delinquent property
owners.
Id., at 794 (citing 505 F. Supp. 3d, at
895–899).
We granted certiorari. 598 U. S. ___
(2023).
II
The County asserts that Tyler does not have
standing to bring her takings claim. To bring suit, a plaintiff
must plead an injury in fact attributable to the defendant’s
conduct and redressable by the court.
Lujan v.
Defenders
of Wildlife,
504 U.S.
555, 560–561 (1992). This case comes to us on a motion to
dismiss for failure to state a claim. At this initial stage, we
take the facts in the complaint as true.
Warth v.
Seldin,
422 U.S.
490, 501 (1975). Tyler claims that the County has illegally
appropriated the $25,000 surplus beyond her $15,000 tax debt. App.
5. This is a classic pocketbook injury sufficient to give her
standing.
TransUnion LLC v.
Ramirez, 594 U. S.
___, ___ (2021) (slip op., at 9).
The County objects that Tyler does not have
standing because she did not affirmatively “disclaim the existence
of other debts or encumbrances” on her home worth more than the
$25,000 surplus. Brief for Respondents 12–13, and n. 5. According
to the County, public records suggest that the condo may be subject
to a $49,000 mortgage and a $12,000 lien for unpaid homeowners’
association fees. See
ibid. The County argues that these
potential encumbrances exceed the value of any interest Tyler has
in the home above her $15,000 tax debt, and that she therefore
ultimately suffered no financial harm from the sale of her home.
Without such harm she would have no standing.
But the County never entered these records
below, nor has it submitted them to this 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. In Minnesota, a tax sale extinguishes all
other liens on a property. See Minn. Stat. §281.18;
County of
Blue Earth v.
Turtle, 593 N.W.2d 258, 261 (Minn. App.
1999). That sale does not extinguish the taxpayer’s debts. Instead,
the borrower remains personally liable. See
St. Paul v.
St. Anthony Flats Ltd. Partnership, 517 N.W.2d 58, 62 (Minn.
App. 1994). Had Tyler received the surplus from the tax sale, she
could have at the very least used it to reduce any such
liability.
At this initial stage of the case, Tyler need
not definitively prove her injury or disprove the County’s
defenses. She has plausibly pleaded on the face of her complaint
that she suffered financial harm from the County’s action, and that
is enough for now. See
Lujan, 504 U. S., at 561.
III
A
The Takings Clause, applicable to the States
through the Fourteenth Amendment, provides that “private property
[shall not] be taken for public use, without just compensation.”
U. S. Const., Amdt. 5. States have long imposed taxes on
property. Such taxes are not themselves a taking, but are a
mandated “contribution from individuals . . . for the
support of the government . . . for which they receive
compensation in the protection which government affords.”
County
of Mobile v.
Kimball,
102
U.S. 691, 703 (1881). In collecting these taxes, the State may
impose interest and late fees. It may also seize and sell property,
including land, to recover the amount owed. See
Jones v.
Flowers,
547 U.S.
220, 234 (2006). Here there was money remaining after Tyler’s
home was seized and sold by the County to satisfy her past due
taxes, along with the costs of collecting them. The question is
whether that remaining value is property under the Takings Clause,
protected from uncompensated appropriation by the State.
The Takings Clause does not itself define
property.
Phillips v.
Washington Legal Foundation,
524 U.S.
156, 164 (1998). For that, the Court draws on “existing rules
or understandings” about property rights.
Ibid. (internal
quotation marks omitted). State law is one important source.
Ibid.; see also
Stop the Beach Renourishment, Inc. v.
Florida Dept. of Environmental Protection,
560 U.S.
702, 707 (2010). But state law cannot be the only source.
Otherwise, a State could “sidestep the Takings Clause by disavowing
traditional property interests” in assets it wishes to appropriate.
Phillips, 524 U. S., at 167; see also
Webb’s
Fabulous Pharmacies, Inc. v.
Beckwith,
449 U.S.
155, 164 (1980);
Hall v.
Meisner, 51 F. 4th
185, 190 (CA6 2022) (Kethledge, J., for the Court) (“[T]he Takings
Clause would be a dead letter if a state could simply exclude from
its definition of property any interest that the state wished to
take.”). So we also look to “traditional property law principles,”
plus historical practice and this Court’s precedents.
Phillips, 524 U. S., at 165–168; see,
e.g.,
United States v.
Causby,
328
U.S. 256, 260–267 (1946);
Ruckelshaus v.
Monsanto
Co.,
467 U.S.
986, 1001–1004 (1984).
Minnesota recognizes a homeowner’s right to real
property, like a house, and to financial interests in that
property, like home equity. Cf.
Armstrong v.
United
States,
364 U.S.
40, 44 (1960) (lien on boats);
Louisville Joint Stock Land
Bank v.
Radford,
295 U.S.
555, 590 (1935) (mortgage on farm). Historically, Minnesota
also recognized that a homeowner whose property has been sold to
satisfy delinquent property taxes had an interest in the excess
value of her home above the debt owed. See
Farnham v.
Jones, 32 Minn. 7, 11, 19 N.W. 83, 85 (1884). But in 1935,
the State purported to extinguish that property interest by
enacting a law providing that an owner forfeits her interest in her
home when she falls behind on her property taxes. See 1935 Minn.
Laws pp. 713–714, §8. This means, the County reasons, that
Tyler has no property interest protected by the Takings Clause.
History and precedent say otherwise. The County
had the power to sell Tyler’s home to recover the unpaid property
taxes. But it could not use the toehold of the tax debt to
confiscate more property than was due. By doing so, it effected a
“classic taking in which the government directly appropriates
private property for its own use.”
Tahoe-Sierra Preservation
Council, Inc. v.
Tahoe Regional Planning Agency,
535 U.S.
302, 324 (2002) (internal quotation marks and alteration
omitted). Tyler has stated a claim under the Takings Clause and is
entitled to just compensation.
B
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 the will of the
deceased.” W. McKechnie, Magna Carta, A Commentary on the Great of
King John, ch. 26, p. 322 (rev. 2d ed. 1914) (footnote
omitted).
That doctrine became rooted in English law.
Parliament gave the Crown the power to seize and sell a taxpayer’s
property to recover a tax debt, but dictated that any “Overplus”
from the sale “be immediately restored to the Owner.”
4 W. & M., ch. 1, §12, in 3 Eng. Stat. at Large
488–489 (1692). As Blackstone explained, the common law demanded
the same: If a tax collector seized a taxpayer’s property, he was
“bound by an implied contract in law to restore [the property] on
payment of the debt, duty, and expenses, before the time of sale;
or, when sold, to render back the overplus.” 2 Commentaries on the
Laws of England 453 (1771).
This principle made its way across the Atlantic.
In collecting taxes, the new Government of the United States could
seize and sell only “so much of [a] tract of land . . .
as may be necessary to satisfy the taxes due thereon.” Act of July
14, 1798, §13, 1Stat. 601. Ten States adopted similar statutes
shortly after the founding.[
1]
For example, Maryland required that only so much land be sold “as
may be sufficient to discharge the taxes thereon due,” and provided
that if the sale produced more than needed for the taxes, “such
overplus of money” shall be paid to the owner. 1797 Md. Laws ch.
90, §§4–5. This Court enforced one such state statute against a
Georgia tax collector, reasoning that “if a whole tract of land was
sold when a small part of it would have been sufficient for the
taxes, which at present appears to be the case, the collector
unquestionably exceeded his authority.”
Stead’s Executors v.
Course, 4 Cranch 403, 414 (1808) (Marshall, C. J., for the
Court).
Like its sister States, Virginia originally
provided that the Commonwealth could seize and sell “so much” of
the delinquent tracts “as shall be sufficient to discharge the said
taxes.” 1781 Va. Acts p. 153, §4. But about a decade later,
Virginia enacted a new scheme, which provided for the forfeiture of
any delinquent land to the Commonwealth. Virginia passed this harsh
forfeiture regime in response to the “loose, cheap and unguarded
system of disposing of her public lands” that the Commonwealth had
adopted immediately following statehood.
McClure v.
Maitland, 24 W. Va. 561, 564 (1884). To encourage
settlement, Virginia permitted “any person [to] acquire title to so
much . . . unappropriated lands as he or she shall desire
to purchase” at the price of 40 pounds per 100 acres. 1779 Va. Acts
p. 95, §2. Within two decades, nearly all of Virginia’s land had
been claimed, much of it by nonresidents who did not live on or
farm the land but instead hoped to sell it for a profit.
McClure, 24 W. Va., at 564. Many of these nonresidents
“wholly neglected to pay the taxes” on the land,
id., at
565, so Virginia provided that title to any taxpayer’s land was
completely “lost, forfeited and vested in the Commonwealth” if the
taxpayer failed to pay taxes within a set period, 1790 Va. Acts p.
5, §5. This solution was short lived, however; the Commonwealth
repealed the forfeiture scheme in 1814 and once again sold “so much
only of each tract of land . . . as will be sufficient to
discharge the” debt. 1813 Va. Acts p. 21, §27. Virginia’s
“exceptional” and temporary forfeiture scheme carries little weight
against the overwhelming consensus of its sister States. See
Martin v.
Snowden, 59 Va. 100, 138 (1868).
The consensus that a government could not take
more property than it was owed held true through the passage of the
Fourteenth Amendment. States, including Minnesota, continued to
require that no more than the minimum amount of land be sold to
satisfy the outstanding tax debt.[
2] The County identifies just three States that deemed
delinquent property entirely forfeited for failure to pay taxes.
See 1836 Me. Laws p. 325, §4; 1869 La. Acts p. 159, §63; 1850 Miss.
Laws p. 52, §4.[
3] Two of these
laws did not last. Maine amended its law a decade later to permit
the former owner to recover the surplus. 1848 Me. Laws p. 56, §4.
And Mississippi’s highest court promptly struck down its law for
violating the Due Process and Takings Clauses of the Mississippi
Constitution. See
Griffin v.
Mixon, 38 Miss. 424,
439, 451–452 (Ct. Err. & App. 1860). Louisiana’s statute
remained on the books, but the County cites no case showing that
the statute was actually enforced against a taxpayer to take his
entire property.
The minority rule then remains the minority rule
today: Thirty-six States and the Federal Government require that
the excess value be returned to the taxpayer.
C
Our precedents have also recognized the
principle that a taxpayer is entitled to the surplus in excess of
the debt owed. In
United States v.
Taylor,
104 U.S.
216 (1881), an Arkansas taxpayer whose property had been sold
to satisfy a tax debt sought to recover the surplus from the sale.
A nationwide tax had been imposed by Congress in 1861 to raise
funds for the Civil War. Under that statute, if a taxpayer did not
pay, his property would be sold and “the surplus of the proceeds of
the sale [would] be paid to the owner.” Act of Aug. 5, 1861, §36,
12Stat. 304. The next year, Congress added a 50 percent penalty in
the rebelling States, but made no mention of the owner’s right to
surplus after a tax sale. See Act of June 7, 1862, §1, 12Stat. 422.
Taylor’s property had been sold for failure to pay taxes under the
1862 Act, but he sought to recover the surplus under the 1861 Act.
Though the 1862 Act “ma[de] no mention of the right of the owner of
the lands to receive the surplus proceeds of their sale,” we held
that the taxpayer was entitled to the surplus because nothing in
the 1862 Act took “from the owner the right accorded him by the act
of 1861, of applying for and receiving from the treasury the
surplus proceeds of the sale of his lands.”
Taylor, 104
U. S., at 218–219.
We extended a taxpayer’s right to surplus even
further in
United States v.
Lawton, 110 U.S.
146 (1884). The property owner had an unpaid tax bill under the
1862 Act for $170.50.
Id., at 148. The Federal Government
seized the taxpayer’s property and, instead of selling it to a
private buyer, kept the property for itself at a value of $1100.
Ibid. The property owner sought to recover the excess value
from the Government, but the Government refused.
Ibid. The
1861 Act explicitly provided that any surplus from tax sales to
private parties had to be returned to the owner, but it did not
mention paying the property owner the excess value where the
Government
kept the property for its own use instead of
selling it. See 12Stat. 304. We held that the taxpayer was still
entitled to the surplus under the statute, just as if the
Government had sold the property.
Lawton, 110 U. S., at
149–150. Though the 1861 statute did not explicitly provide the
right to the surplus under such circumstances, “[t]o withhold the
surplus from the owner would be to violate the Fifth Amendment to
the Constitution and to deprive him of his property without due
process of law, or to take his property for public use without just
compensation.”
Id., at 150.
The County argues that
Taylor and
Lawton were superseded by
Nelson v.
City of New
York,
352 U.S.
103 (1956), but that case is readily distinguished. There New
York City foreclosed on properties for unpaid water bills. Under
the governing ordinance, a property owner had almost two months
after the city filed for foreclosure to pay off the tax debt, and
an additional 20 days to ask for the surplus from any tax sale.
Id., at 104–105, n. 1. No property owner requested his
surplus within the required time. The owners later sued the city,
claiming that it had denied them due process and equal protection
of the laws.
Id., at 109. In their reply brief before this
Court, the owners also argued for the first time that they had been
denied just compensation under the Takings Clause.
Ibid.
We rejected this belated argument.
Lawton
had suggested that withholding the surplus from a property owner
always violated the Fifth Amendment, but there was no specific
procedure there for recovering the surplus.
Nelson, 352
U. S., at 110. New York City’s ordinance, in comparison,
permitted the owner to recover the surplus but required that the
owner have “filed a timely answer in [the] foreclosure proceeding,
asserting his property had a value substantially exceeding the tax
due.”
Ibid. (citing
New York v.
Chapman Docks
Co., 1 App. Div. 2d 895, 149 N.Y.S.2d 679 (1956)).
Had the owners challenging the ordinance done so, “a separate sale”
could have taken place “so that [they] might receive the surplus.”
352 U. S., at 110. The owners did not take advantage of this
procedure, so they forfeited their right to the surplus. Because
the New York City ordinance did not “absolutely preclud[e] an owner
from obtaining the surplus proceeds of a judicial sale,” but
instead simply defined the process through which the owner could
claim the surplus, we found no Takings Clause violation.
Ibid.
Unlike in
Nelson, Minnesota’s scheme
provides no opportunity for the taxpayer to recover the excess
value; once absolute title has transferred to the State, any excess
value always remains with the State. The County argues that the
delinquent taxpayer could sell her house to pay her tax debt before
the County itself seizes and sells the house. But requiring a
taxpayer to sell her house to avoid a taking is not the same as
providing her an opportunity to recover the excess value of her
house once the State has sold it.
D
Finally, Minnesota law itself recognizes that
in other contexts a property owner is entitled to the surplus in
excess of her debt. Under state law, a private creditor may enforce
a judgment against a debtor by selling her real property, but “[n]o
more shall be sold than is sufficient to satisfy” the debt, and the
creditor may receive only “so much [of the proceeds] as will
satisfy” the debt. Minn. Stat. §§550.20, 550.08 (2022). Likewise,
if a bank forecloses on a home because the homeowner fails to pay
the mortgage, the homeowner is entitled to the surplus from the
sale. §580.10.
In collecting all other taxes, Minnesota
protects the taxpayer’s right to surplus. If a taxpayer falls
behind on her income tax and the State seizes and sells her
property, “[a]ny surplus proceeds . . . shall
. . . be credited or refunded” to the owner. §§270C.7101,
270C.7108, subd. 2. So too if a taxpayer does not pay taxes on her
personal property, like a car. §277.21, subd. 13. Until 1935,
Minnesota followed the same rule for the sale of real property. The
State could sell only the “least quantity” of land sufficient to
satisfy the debt, 1859 Minn. Laws p. 58, §23, and “any surplus
realized from the sale must revert to the owner,”
Farnham,
32 Minn., at 11, 19 N. W., at 85.
The State now makes an exception only for
itself, and only for taxes on real property. But “property rights
cannot be so easily manipulated.”
Cedar Point Nursery v.
Hassid, 594 U. S. ___, ___ (2021) (slip op., at 13)
(internal quotation marks omitted). Minnesota may not extinguish a
property interest that it recognizes everywhere else to avoid
paying just compensation when it is the one doing the taking.
Phillips, 524 U. S., at 167.
IV
The County argues that Tyler has no interest
in the surplus because she constructively abandoned her home by
failing to pay her taxes. States and localities have long imposed
“reasonable conditions” on property ownership.
Texaco, Inc.
v.
Short,
454 U.S.
516, 526 (1982). In Minnesota, one of those conditions is
paying property taxes. By neglecting this reasonable condition, the
County argues, the owner can be considered to have abandoned her
property and is therefore not entitled to any compensation for its
taking. See Minn. Stat. §282.08.
The County portrays this as just another example
in the long tradition of States taking title to abandoned property.
We upheld one such statutory scheme in
Texaco. There,
Indiana law dictated that a mineral interest automatically reverted
to the owner of the land if not used for 20 years. 454 U. S.,
at 518. Use included excavating minerals, renting out the right to
excavate, paying taxes, or simply filing a “statement of claim with
the local recorder of deeds.”
Id., at 519. Owners who lost
their mineral interests challenged the statute as unconstitutional.
We held that the statute did not violate the Takings Clause because
the State “has the power to condition the permanent retention of
[a] property right on the performance of reasonable conditions that
indicate a
present intention to retain the interest.”
Id., at 526 (emphasis added). Indiana reasonably “treat[ed]
a mineral interest that ha[d] not been used for 20 years and for
which no statement of claim ha[d] been filed as abandoned.”
Id., at 530. There was thus no taking, for “after
abandonment, the former owner retain[ed] no interest for which he
may claim compensation.”
Ibid.
The County suggests that here, too, Tyler
constructively abandoned her property by failing to comply with a
reasonable condition imposed by the State. But the County cites no
case suggesting that failing to pay property taxes is itself
sufficient for abandonment. Cf.
Krueger v.
Market,
124 Minn. 393, 397, 145 N.W. 30, 32 (1914) (owner did not abandon
property despite failing to pay taxes for 30 years). Abandonment
requires the “surrender or relinquishment or disclaimer of ”
all rights in the property.
Rowe v.
Minneapolis, 49
Minn. 148, 157, 51 N.W. 907, 908 (1892). “It is the owner’s failure
to make
any use of the property”—and for a lengthy period of
time—“that causes the lapse of the property right.”
Texaco,
454 U. S., at 530 (emphasis added). In
Texaco, the
owners lost their property because they made
no use of their
interest for 20 years and then failed to take the simple step of
filing paperwork indicating that they still claimed ownership over
the interest. In comparison, Minnesota’s forfeiture scheme is not
about abandonment at all. It gives no weight to the taxpayer’s use
of the property. Indeed, the delinquent taxpayer can continue to
live in her house for years after falling behind in taxes, up until
the government sells it. See §281.70. Minnesota cares only about
the taxpayer’s failure to contribute her share to the public fisc.
The County cannot frame that failure as abandonment to avoid the
demands of the Takings Clause.
* * *
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.”
Armstrong, 364 U. S., at 49. 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. The taxpayer must render unto Caesar what is Caesar’s,
but no more.
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. Tr. of Oral Arg. 27. The judgment of the Court of
Appeals for the Eighth Circuit is reversed.
It is so ordered.
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