Supreme Court rules governments need not pay fair market value in tax foreclosures

In a decision authored by Justice Samuel Alito, the Supreme Court ruled Tuesday in Pung v. Isabella County, Michigan, that the Fifth Amendment’s Takings Clause does not require the government to compensate property owners based on a property’s hypothetical fair market value after a tax foreclosure. 

Instead, the government satisfies its constitutional obligation by returning any surplus proceeds remaining from a properly conducted tax sale auction. The Court also rejected the petitioner’s claim under the Eighth Amendment’s Excessive Fines Clause.

Justice Alito delivered the opinion of the Court, joined by Chief Justice Roberts and Justices Sotomayor, Kagan, Gorsuch, Kavanaugh, Barrett, and Jackson. Justice Thomas joined the opinion in part. Justice Sotomayor filed a concurring opinion, joined by Justices Gorsuch and Jackson. Justice Thomas filed an opinion concurring in part and concurring in the judgment, joined by Justice Gorsuch in part.