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Pacific Legal Foundation filed the brief saying Cook County
confiscated homes over relatively small tax debts, auctioned
them off and then kept the entire amount, not just taxes and
penalties.
PLF asked the appeals court to affirm the district court’s
finding in Michelle Kidd et al v. Pappas that the uncompensated
confiscation of surplus equity violates the U.S. Constitution's
Fifth and Eighth Amendments.
According to the brief, the county took Kidd’s $166,000 home
over a $2,300 tax debt.
PLF attorney Tanmay Shukla said Pappas is claiming sovereign
immunity by saying state law binds her hands.
“That is the sort of loophole that, if I'm quite blunt about it,
we expect predatory lenders to exploit, but the strange thing
about this tax sale and tax foreclosure is that we have local
governments doing it instead,” Shukla told The Center Square.
In 2023, the U.S. Supreme Court ruled that the difference
between the amount owed and the government gets at auction must
be paid back to the property owner.
Shukla said, before Tyler v. Hennepin County in 2023, the
government would use “the toehold” of small tax debts to acquire
property, auction it off and keep the whole amount.
According to Shukla, Cook County has not responded.
“It continues to stick to its old practices because of which
people are losing their surplus equity, which often represents
their life savings,” Shukla said.
Pappas is claiming sovereign immunity under state law, even
though the U.S. Constitution does not entitle counties to
sovereign immunity.
“So their basic argument is that under state law, they are not
allowed to follow the Constitution, and I know that this sounds
ridiculous because it is,” Shukla said.
The Cook County Treasurer’s Office did not immediately respond
to The Center Square’s request for comment.
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