Supreme Court says county can't keep more than owed from foreclosure sale

May 25 (UPI) -- The U.S. Supreme Court Thursday sided with a Minnesota woman, ruling a local municipality is not entitled to keep the profits beyond what was owed following a tax foreclosure sale.

The justices voted unanimously, agreeing Hennepin County, Minn., was not entitled to keep about $25,000 in profits after selling the home of Geraldine Tyler.

Tyler, 95, owed $15,000 in back taxes and fees, dating back to 2011. The county seized her Minneapolis condo in 2015, later selling it during a tax foreclosure sale for $40,000.

The municipality then pocketed the remaining approximately $25,000 as profit, rather than returning it to Tyler.

Ultimately the court decided the county violated Fifth Amendment's Takings clause, after the 8th U.S. Circuit Court of Appeals rejected Tyler's claims in February 2022.

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. 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," Chief Justice John Roberts wrote in the unanimous opinion, before referencing a bible verse.

"The taxpayer must render unto Caesar what is Caesar's, but no more."

States are divided on their policies, with some allowing jurisdictions to keep money generated beyond what is owed and others returning the remaining proceeds.

"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," Roberts wrote in the ruling.