There’s a big property rights victory from the Supreme Court that is being little talked about and somewhat shunned as being as significant as it is by much of media.

The Supreme Court has ruled that home equity theft qualifies as a taking, and that state law is not the sole source for the definition of property rights. The ruling sets an important and valuable precedent.

In a unanimous Supreme Court decision local governments seizing the entire value of a property in order to pay off a smaller delinquent property tax debt has been declared as a takings or “home equity theft.” The case, Tyler v. Hennepin County, addressed the case of Geraldine Tyler. The plaintiff in the case was a 94-year-old widow whose home, valued at $40,000, was seized by Hennepin County  after she was unable to pay off $15,000 in property taxes, penalties, interest, and fees. The County then kept the entire $40,000 for itself, as Minnesota law allows.

The Supreme Court unanimously ruled that such practices qualify as takings requiring the payment of “just compensation” under the Takings Clause of the Fifth Amendment. Importantly, it also concluded that state law is not the sole source of the definition of property rights under the Takings Clause, and therefore state governments cannot seize private property without compensation simply by redefining it as the state’s property.

Besides the clear merits of the case, property rights advocates noted that the case set a significant precedent in declaring that states cannot just redefine property rights at will, which has important implications for other property rights issues.

In the decision, Chief Justice John Roberts pointed out that the Fourteenth Amendment, provides that “private property [shall not] be taken for public use, without just compensation…. 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.’”

The Takings Clause does not itself define property. For that, the Court draws on “existing rules or understandings” about property rights. Phillips v. Washington Legal Foundation, 524 U. S. 156, 164 (1998). State law is one important source…. 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… 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….


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