Tyler v. Minnesota, No. 20-3730 (8th Cir. 2022)
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Tyler owned a Minneapolis condominium. She stopped paying her property taxes and accumulated a tax debt of $15,000. To satisfy the debt, Hennepin County foreclosed on Tyler’s property and sold it for $40,000. The county retained the net proceeds from the sale. Tyler sued the county, alleging that its retention of the surplus equity—the value of the condominium in excess of her $15,000 tax debt—constituted an unconstitutional taking, an unconstitutionally excessive fine, a violation of substantive due process, and unjust enrichment under state law.
The Eighth Circuit affirmed the dismissal of her complaint. Minnesota’s statutory tax-forfeiture plan allocates the entire surplus to various entities with no distribution of net proceeds to the former landowner; the statute abrogates any common-law rule that gave a former landowner a property right to surplus equity. Nothing in the Constitution prevents the government from retaining the surplus where the record shows adequate steps were taken to notify the owners of the charges due and the foreclosure proceedings.
Court Description: [Colloton, Author, with Shepherd and Kelly, Circuit Judges] Civil case. Claim that the State committed an unconstitutional taking when it took title to plaintiff's condominium after she failed to pay her property taxes rejected; under Minnesota law, plaintiff did not have a right to any surplus equity generated by the foreclosure sale of the property as the statutory scheme provided the procedures for disposing of any surplus and did not give the former owner a right to any portion of the surplus; the Takings Clause does not forbid the state from retaining the entire proceeds of a sale after proper notice to owners who fail to respond; claim that retention of the surplus is an unconstitutional excessive fine and a violation of substantive due process rejected.
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