The Supreme Court heard its last case of the year on Wednesday, concerning an elderly woman whose home was taken by the government, and then sold for a profit.
The case addressing "home equity theft" was brought by the Pacific Legal Foundation, on behalf of 94-year-old Minnesotan Geraldine Tyler, whose condo was seized over $15,000 in unpaid taxes and fees. The county sold the property and kept all of the $40,000 in proceeds.
It would seem to be a slam dunk case, and indeed, the justices seemed to think so.
Lawyers for Tyler alleged injuries under the Fifth Amendment, which forbids the government from seizing private property "without just compensation," and the Eighth Amendment's ban on excess fines.
Justices on both sides of the bench were broadly sympathetic to Tyler's claims that her property rights were trampled on.
Hennepin County contends that Tyler was asking the state to act as her personal real estate agent, and that she had plenty of opportunities to protect her property before it was taken. But the justices weren't buying it.
“At bottom, she’s saying the county took her property and made a profit on her surplus equity. It belongs to her,” Justice Clarence Thomas said.
The county was represented by Neal Katyal, an anti-Trump MSNBC legal pundit. The justices seemed amused by his arcane argument, part of which involved an obscure 800-year-old English law called the Statute of Gloucester.
"A funny thing happened after that. It was called the Magna Carta," justice Neil Gorsuch quipped, eliciting laughter in the chamber.
At one point, Katyal said the government could pocket the difference after seizing a $5 million house over a $5,000 tax debt.
"If that’s all true,” Chief Justice John Roberts asked, “what’s the point of the takings clause?”
Katyal also left justices dumbfounded when he argued the Founding Fathers would have agreed with his claim that delinquent property owners have no right to recover the surplus value of their homes.
When grilled by Clarence Thomas, Katyal admitted he couldn't name a specific case when a Founding-era Virginia law was applied that way. Thomas noted that Thomas Jefferson, a Virginia native, "didn't exactly think fondly of big government."
According to the Pacific Legal Foundation, homeowners are exposed to "home equity theft" in 12 states and the District of Columbia.
The 8th U.S. Circuit Court of Appeals previously rejected Tyler's claim, siding with Hennepin County. A decision from the Supreme Court is expected in the summer.
