2023 has been a good year for property rights. In May, the Supreme Court held that a Minnesota statute that allowed a local government, Hennepin County, to retain the surplus proceeds from a tax sale violated the Just Compensation Clause. The petitioner, 94-year-old Geraldine Tyler, owed back taxes on a condominium, which the county ultimately sold and retained all the proceeds, which resulted in the county keeping more money than needed to pay the back taxes and costs of the proceedings. In holding the county had violated the Fifth Amendment, the Supreme Court stated that the county can sell Tyler’s condo to recover the $15,000 that she owes it, but it cannot “use the toehold of the tax debt to confiscate more property than was due.” By keeping the $25,000, the county “effected a ‘classic taking in which the government directly appropriates private property for its own use.’” Tyler v. Hennepin County, Minn.
The positive impact of Tyler is already being seen in other cases. On June 28, 2023, the U.S. Court of Appeals for the Federal Circuit reversed a federal district court’s summary judgment decision denying a taking claim in a Little Tucker Act case. The case involved two automobiles owned by Brodrick Jamar Jenkins, which the U.S. Drug Enforcement Administration had seized during an investigation of a drug conspiracy. Later Mr. Jenkins pled guilty to the drug conspiracy charge and was incarcerated for 252 months. During his incarceration, the impound lot that held the vehicles made several failed attempts to notify Mr. Buchanan and his mother, Ms. Buchanan, that the vehicles could be picked up. Ultimately the impound lot sold the vehicles and retained the proceeds, in part, to satisfy towing and storage charges.
Upon his release, Mr. Jenkins sued to recover the proceeds of the sale over the amounts owed for towing and storage. The district court held that there was no takings liability because the government’s action was a lawful exercise of the police power.
But the Federal Circuit rejected that argument holding that
“[w]hile the United States’ police power may insulate it from liability for an initial seizure, there is no policy power exception that insulates the United States from takings liability for the period after seized property is no longer needed for criminal proceedings.”
Therefore, citing the Tyler decision, the Federal Circuit acknowledged the Fifth Amendment’s prohibition against “the retention of proceeds of the sale over and above any legal charges. . . .” The Federal Circuit vacated the district court’s ruling and remanded the case for further proceedings.
Read full decision here.
