Amicus Brief: Pung v Isabella County

Under the Fifth Amendment’s Takings Clause, the government can't take your property except for public use and with just compensation. But if the government takes your home because you owe taxes on it, gives you $74,000 from a fire-sale foreclosure auction, and then the home immediately sells again for $195,000, is your compensation "just"?

That's the question here, in a case the Supreme Court will hear in the new year. The saga of the Pung family is long, sad, and convoluted, but the short story is that the Pungs' home was assessed a property tax that they challenged and won. Despite the judge's ruling in the Pungs' favor, the county tax assessor insisted on levying the tax again (plus penalties and interest). The Pungs tried to pay the tax they were still disputing (about $2,200) but the county wouldn't take the check. Instead it took their home and sold it at auction for about $76,000, even though the county itself valued the property at $194,400. The property speculator who bought the property then immediately resold it for $195,000. 

In Tyler v. Hennepin County (2023), the Supreme Court held that governments have to return the excess value of a foreclosure sale that goes beyond the taxes owed. That's why the Pungs recovered the difference between the meager tax they owed and the fire-sale auction price. But the value of the home was clearly higher, and constitutional "just compensation" usually means something like the fair market price. If you sell a Picasso at a swap meet, it's not a fair market price. The Pungs are now asking the Supreme Court to hold that the Takings Clause requires truly just compensation. 

The Manhattan Institute has joined the Citizens Action Defense Fund, Reason Foundation, and Oregon Property Owners Association on a brief supporting the Pungs' case. We argue that the Takings Clause is not the "Receivings Clause" and that the question of just compensation should focus on the actual value of what was taken, not on the funds received. This interpretation not only agrees with original public meaning, but supports one of the central purposes of the Takings Clause: if the government takes someone's property, it has to make the owner whole. Moreover, the Eighth Amendment protects against "excessive fines"—which has not been limited to purely criminal fines. Under either clause, the Pungs should recover the full value of their property (with interest). The Court should bring justice to a family that’s been fighting their county for too long. 

Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.

Trevor Burrus is a legal policy fellow at the Manhattan Institute.

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