609/1
U.S.2026Background
- The Pung family owed $2,241.93 in property taxes, and Isabella County foreclosed on their home and sold it at auction for $76,008 though it was assessed at $194,400. 1
- Michael Pung sued in federal court under the Fifth and Eighth Amendments, and the District Court awarded him only the tax-sale surplus, not fair market value. 2
- The Sixth Circuit affirmed, holding Pung was entitled only to the amount above the tax debt and rejecting his Eighth Amendment claim. 3
- The County followed Michigan foreclosure procedures, including notice, redemption, public sale, and a foreclosure judgment. 4
- The Supreme Court granted certiorari to decide whether just compensation after a tax sale is based on auction price or fair market value, and whether the sale was an excessive fine. 5
- The Court vacated and remanded, with the majority holding that tax-sale auction price is the proper Takings Clause baseline and that the Eighth Amendment does not require fair-market-value compensation. 6
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Takings Clause baseline for tax-sale compensation 7 | Pung argued just compensation equals fair market value, not auction price. | County argued the auction price controls, with only surplus proceeds owed. | Auction price is the baseline, if the sale was fairly conducted. 8 |
| Whether history requires fair-market-value compensation 9 | Pung relied on fair-market-value theories and analogies to eminent domain. | County said history and precedent support surplus-proceeds-only recovery. | History and precedent reject a fair-market-value rule here. 10 |
| Eighth Amendment excessive-fines claim 11 | Pung claimed taking a home for a small tax debt was an excessive fine. | County argued tax foreclosure is nonpunitive and historically accepted. | No Eighth Amendment violation; surplus proceeds are enough. 12 |
| Unpreserved procedural unfairness arguments 13 | Pung argued the foreclosure procedure was unfair in several respects. | County argued those issues were outside the questions presented. | Court declined to resolve them and left preservation to remand. 14 |
Key Cases Cited
- Tyler v. Hennepin County, 598 U.S. 631 (U.S. 2023) (tax-foreclosure surplus must be returned to the former owner 15)
- United States v. Taylor, 104 U.S. 216 (U.S. 1881) (early federal tax-sale law required refund of surplus proceeds 16)
- United States v. Lawton, 110 U.S. 146 (U.S. 1884) (withholding tax-sale surplus would violate the Fifth Amendment 17)
- Nelson v. City of New York, 352 U.S. 103 (U.S. 1956) (recognized a right to surplus tax-sale proceeds subject to statutory limits 18)
- BFP v. Resolution Trust Corp., 511 U.S. 531 (U.S. 1994) (foreclosure sale price can govern where state foreclosure law is complied with 19)
- Austin v. United States, 509 U.S. 602 (U.S. 1993) (forfeiture can be a fine if it serves at least partly to punish 20)
- United States v. 564.54 Acres of Monroe and Pike County Land, 441 U.S. 506 (U.S. 1979) (market value is not always the sole measure of just compensation 21)
- United States v. Miller, 317 U.S. 369 (U.S. 1943) (just compensation places the owner in as good a pecuniary position as if no taking occurred 22)
- Horne v. Department of Agriculture, 576 U.S. 351 (U.S. 2015) (government cannot disavow its own valuation when calculating compensation 23)
- Kelo v. City of New London, 545 U.S. 469 (U.S. 2005) (cited in Thomas concurrence on property-rights principles 24)