Tyler v. Hennepin County

Under the Takings Clause of the Fifth Amendment, government cannot bootstrap a delinquent tax to take more than what is owed.

Petitioner owed Respondent $15,000 in unpaid taxes. To pay the tax delinquency, Respondent seized and sold Petitioner’s condo for $40,000. After recovering the unpaid taxes from the sale of the condo, Respondent did not return the surplus of $25,000 from the sale. Petitioner claims the withholding of the remaining funds constitutes a taking without just compensation, a violation of the Fifth Amendment. Respondent argues that Petitioner constructively abandoned the property by not paying taxes. The Court held that Respondent violated the Takings Clause, as Respondent held onto an amount greater than the tax owed by Petitioner. After examining the Takings Clause and historical precedents, the Court rejected Respondent’s claim that it could hold onto the surplus funds because Petitioner, by not paying taxes constructively abandoned the condo and as such lost all rights in the property. Constructive abandonment required the relinquishment of all rights to the property, not merely an outstanding tax. As such, Respondent “could not use the toehold of the tax debt to confiscate more property than was due.” The judgment of the Court of Appeals for the Eighth Circuit is reversed. REVERSED.