Rafaeli LLC v. Oakland County, 330696

Plaintiffs Rafaeli, LLC and Andre Ohanessian challenged Michigan statute MCL 211.78g, which causes a property owner to forfeit the owner’s entire interest in real property to the county treasurer for tax delinquency if not cured within the statutory time.
Rafaeli owed $8.41 (with interest/fees growing to a few hundred dollars) and the county sold the property for tens of thousands of dollars; Ohanessian likewise faced a large disparity between tax owed and sale price.
Plaintiffs asserted the statute violates the Fifth Amendment Takings Clause by permitting the county to keep surplus sale proceeds rather than returning them to the owner.
On appeal to the Michigan Court of Appeals, the panel (with a concurring opinion by Judge Shapiro) affirmed dismissal: concluding constitutional notice was provided and plaintiffs lacked standing to attack hearing methodology, and rejecting the Takings challenge.
Judge Shapiro concurred in the result but analyzed the Takings claim differently, relying on U.S. Supreme Court precedent that foreclosures keeping surplus do not violate the Federal Constitution where adequate notice and foreclosure procedures occurred.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether MCL 211.78g violates the Fifth Amendment Takings Clause by allowing a county to keep surplus value after tax foreclosure	The statute effects an uncompensated taking when a property owner loses all equity while owing a trivial tax amount	The statute is constitutionally permissible where adequate notice and foreclosure procedures were followed; statute is for tax collection, not an unconstitutional taking	Dismissal affirmed; court rejects Takings challenge (Judge Shapiro grounds decision on controlling Supreme Court precedent)
Whether plaintiffs have standing/constitutional notice to attack the foreclosure hearing methodology	Plaintiffs contended hearing procedure/notice was inadequate and thus their rights were infringed	Defendants showed adequate steps to notify owners and proceed with foreclosure; plaintiffs lacked standing to attack methodology	Court held constitutional notice was provided and plaintiffs lacked standing to challenge the hearing methodology

United States v. Lawton, 110 U.S. 146 (1884) (early Supreme Court decision suggesting surplus must be returned after tax sale)
Nelson v. City of New York, 352 U.S. 103 (1956) (Supreme Court rejected constitutional challenge where adequate notice and foreclosure procedures occurred)
Bennis v. Michigan, 516 U.S. 442 (1996) (forfeiture case involving property tied to criminal activity; discussed by majority but distinguished by concurrence)