U.S. Supreme Court Strikes a Blow for the Little Guy

Back in January, we told the story of Geraldine Tyler’s challenge of Hennepin County, Minnesota’s taking of her property to collect back property taxes, and her loss of any equity interest remaining.  

While no one denies that the government can seize property to collect back taxes and fines, the question is really about how much beyond that they can keep.  

The Supreme Court announced yesterday’s unanimous decision that, as Chief Justice Roberts said, “The taxpayer must render unto Caesar what is Caesar’s, but no more.” In other words, using Fifth Amendment “Takings Clause” jurisprudence, when a property is taken to collect tax debt, proceeds from sales above the actual amount owed must be returned to the original owner of the property.  

The Platte Institute joined several other policy institutes nationwide in an amicus brief for the case.  

Sen. John Cavanaugh introduced an interim study in 2022 and then introduced LB577 this year to address this issue.  

While the bill did not exit the Revenue Committee in total, key elements of the bill have been included in an amendment to LB727. It was crucial that—assuming the practice was declared unconstitutional—Nebraska had direction in statute for county treasurers.  

An interesting side note in the Tyler v. Hennepin County case is the concurring opinion by Justice Gorsuch, joined by Justice Jackson. The Court decided the case on “Takings Clause” grounds. Still, Gorsuch acknowledges that Tyler’s case also raised Eighth Amendment “Excessive Fines” questions and indicates that the case could have been decided on those grounds, as well.  

The Supreme Court’s ruling becomes precedent and will require that states around the country—including Nebraska—change their existing statutes and practices to conform to the findings of the case.