Tyler v. Hennepin County

Geraldine Tyler, a 94-year-old Minnesota woman, owed about $15,000 in property taxes on her condominium. Hennepin County seized the property and sold it at auction for $40,000 but kept the entire proceeds, including the $25,000 surplus beyond her tax debt. Tyler sued, arguing that retaining the surplus equity constituted an unconstitutional taking under the Fifth Amendment. The lower courts dismissed her claim. The Supreme Court granted certiorari and on May 25, 2023, ruled unanimously in her favor. Chief Justice John Roberts delivered the opinion, holding that the county's retention of the surplus equity violated the Takings Clause because Tyler's property interest in the equity was protected and required just compensation. The case was remanded.

The U.S. Supreme Court ruled unanimously (9-0) in favor of Geraldine Tyler, holding that Hennepin County’s retention of the surplus equity violated the Takings Clause. The lower court decisions were reversed, and the case was remanded for further proceedings.

Whether a government’s retention of surplus equity from a tax-foreclosure sale that exceeds the delinquent tax debt constitutes a taking under the Fifth Amendment’s Takings Clause, thus requiring just compensation.

The ruling prohibited the practice of "home equity theft" by invalidating laws in multiple states that allowed local governments to keep all proceeds from tax-foreclosure sales. It affirmed that home equity is constitutionally protected property, prompting legislative reforms nationwide to ensure surplus funds are returned to former owners. Property rights advocates celebrated the decision as a landmark victory against uncompensated government taking.