U.S. Supreme Court to Hear Michigan Tax Foreclosure Compensation Case

The U.S. Supreme Court has agreed to hear the case of Pung v. Isabella County, which centers on whether a homeowner's estate is entitled to the fair market value of a foreclosed home, rather than just the surplus from a tax auction sale. This dispute follows the precedent set in Tyler v. Hennepin County (2023), where the Court ruled that governments cannot retain home equity beyond the debt owed without violating the Takings Clause of the Fifth Amendment. The Pung case raises questions about proper compensation after a tax foreclosure, with the estate arguing that the county should pay the full assessed property value rather than the lower auction price, potentially addressing issues of fair market value and just compensation under the Fifth Amendment. Additionally, the case involves claims related to the Eighth Amendment's protection against excessive fines and whether the government owes interest on surplus proceeds from such sales. The case highlights ongoing tensions about property rights and government authority in tax foreclosures, with the Supreme Court's decision expected to clarify compensation standards and constitutional protections for property owners. The dispute has been long-running, involving a disputed tax bill and the estate's contention that the government improperly seized more value than owed.