To hear an audio by the author, please click here.
This article was first published in the Federalist Society Blog.
A Supreme Court ruling, like many other things, may not be quite what it seems.
At point here is the Court’s unanimous May 25 decision in Tyler v. Hennepin County: Initially, it looks like a clear victory for property rights and constitutional values. It has been celebrated as such. But further investigation reveals reasons for disquiet.
Facts and Holding
Geraldine Tyler, who is currently 94 years old, owned a condominium unit in Hennepin County, Minnesota. She didn’t pay her real property taxes for at least six years. When she had piled up arrears of $15,000 in late taxes and penalties, the county foreclosed and held a tax sale.
The unit sold for $40,000. In accordance with Minnesota state law, the county kept the proceeds. It did not rebate to Ms. Tyler the $25,000 difference between the sum she owed and the sum the county received.
Speaking through Chief Justice John Roberts, the Court ruled that keeping the extra $25,000 violated the Takings Clause of the Fifth Amendment—a provision allegedly “incorporated” against the states through the Due Process Clause of the Fourteenth Amendment.
My first instinct was to cheer.
Dig further into the case, however, and you find some qualifying information. Ms. Tyler apparently knew about real estate taxes, since she had paid them earlier, and as shown by the sums involved, those levies were very moderate. Over the period—at least six years—when the taxes remained unpaid, she no doubt received notices of non-payment.
Despite her age, the court reported nothing to suggest she was mentally impaired. Of course, old people are not necessarily impaired to the extent they cannot pay their bills. My mother diligently wrote checks for all taxes until shortly before her death at age 101.
Moreover, Ms. Tyler did not have to manage her affairs alone. According to the Court’s recitation of the facts, family members took an active role in assisting her, but apparently they did not pay the taxes either.
Was This a Taking?
In his opinion for the Court, Chief Justice Roberts recited traditional English and American prohibitions against uncompensated seizures. But he blended indiscriminately eminent domain with fines and forfeitures. They are not the same thing.
Eminent domain is, of course, government seizure of property from an innocent person for public benefit. A fine or forfeiture traditionally is a civil or criminal penalty for specified conduct or neglect.
As I detailed in a 2018 article for the Federalist Society Review, eminent domain (usually with compensation) was a feature of Anglo-American law when the Constitution was adopted. The Takings Clause was directed against government exercise of this power. A separate provision of the Bill of Rights—the Eighth Amendment—addressed “excessive fines.”
In a concurring opinion, Justices Neil Gorsuch and Ketanji Brown Jackson argued that Ms. Tyler’s forfeiture could be characterized as either an uncompensated taking or as an excessive fine. But in light of the historical differences between the two, it is difficult to understand how it can be characterized for constitutional purposes as anything other than a fine.
Forfeitures in Real Estate Law and Practice
During the public debates over ratification of the Constitution, the document’s advocates repeatedly emphasized that real property law would remain an exclusive province of the states. And during the Founding Era—and for centuries before and since—forfeiture has been an accepted part of property law.
Thus, a fee simple determinable (or other determinable estate) is lost irretrievably by the failure of the specified condition supporting it. An estate subject to a condition subsequent is forfeited upon re-entry due to occurrence of the condition. Strict foreclosure of a mortgage—or default under an installment land contract (contract for deed)—also may result in costly forfeiture.
Of course, “the law abhors a forfeiture.” But this means only that ambiguous terms are construed against it. It also is true that most states have adopted laws to mitigate its harshness. But I am unaware of any previous constitutional holding that required states to adopt such laws.
One might object that the forfeitures just mentioned usually accrue to the benefit of private parties while the forfeiture in Tyler benefitted the government—and the Fifth and Eighth Amendments apply only to government.
That is accurate but, in this scenario, unimportant.
The Minnesota forfeiture statute wasn’t new. The county didn’t spring it on Ms. Tyler. It was not a vague license to torment property owners in the fashion of the Environmental Protection Agency’s vague and overreaching wetlands regulations that the Court narrowed this term in EPA v. Sackett.
Rather, Minnesota’s forfeiture procedure had been in continuous effect since 1935. Since the property was a condominium unit and there were almost no condominiums in the United States until the 1960s, the forfeiture rule almost certainly had been on the books long before Ms. Tyler purchased her unit. In other words, she took subject to the tax forfeiture rule in the same way a person purchasing a defeasible fee takes subject to its conditions.
Forfeiture terms, like other rules governing real estate, are reflected in market prices. To the extent that the potential for tax forfeiture reduced market value, Ms. Tyler benefited by paying a lower purchase price than she otherwise would have paid. The forfeiture rule applied to other owners as well, a situation that likely reduced Ms. Tyler’s own tax bills. This is because the rule provided the county with revenue—by forfeiture collections and by discouraging defaults.
So while she owned her unit, Ms. Tyler benefitted from the rule, and if she had paid her taxes, she could have continued to do so. But when she and her family chose to default the Court let them off the hook.
The Incorporation Doctrine
The Supreme Court’s version of the “incorporation doctrine” is that the Due Process Clause of the Fourteenth Amendment applied most or all of the Bill of Rights against the states. Liberal 20th century Supreme Court majorities implemented this version through what Justice Clarence Thomas might call a “judicial ipse dixit.” A somewhat more persuasive variation of the doctrine sees “incorporation” as arising from the Privileges or Immunities Clause of the same amendment.
Although volumes have been written to justify the incorporation doctrine, they have not cured its textual and historical difficulties or its reliance on debatable inferences. For this reason, the incorporation doctrine has been controversial among originalists.
I do not have space in this post to address comprehensively the weaknesses in the doctrine. It is enough to note that in the Tyler case, as in others, the current Justices adopted it uncritically. This is representative of the current Court’s pattern of adopting 20th century liberal precedents wholesale and without serious re-examination (Thomas, J., sometimes dissenting). The overturning of Roe v. Wade was a very rare exception to this pattern.
More Interference with State Law?
One objection to the incorporation doctrine is that it impairs federalism because it gives the Court enormous power over state law—power that, in my view, can be and has been abused.
In this respect also, the implications of Tyler are not good. Traditionally when defining property rights, the Court has relied on applicable state law. Thus, in the opinion for the Court in Lucas v. South Carolina Coastal Council (1992), Justice Antonin Scalia observed that the Court respects restrictions on ownership imposed by “background principles of the State’s law of property and nuisance.”
One might have thought that a property tax rule in effect and applied since 1935 would be a “background principle.” But for the Tyler Court, state law was only “one important source” to be used in defining property rights. The Justices will now consult as well “traditional property law principles” and “historical practice and this Court’s precedents.”
One can see the potential for judicial mischief.
If I were a Minnesota lawmaker in 1935, I would not have voted for the forfeiture law. But the fact that a law is bad doesn’t make it unconstitutional.
Tyler underscores why it’s profoundly misleading to label this bench or its six non-liberal Justices as “conservative.” Protecting property from unfair taking looks conservative. But other aspects of the case certainly do not.