Amicus Curiae Brief — Kevin L. Fair, Petitioner v. Continental Resources, et al.

No. 22-160

In the Supreme Court of the United States

_______________________

KEVIN L. FAIR,

v.

Petitioner,

CONTINENTAL RESOURCES, et. al.,

Respondents.

_______________________

On Petition for Writ of Certiorari to the

Nebraska Supreme Court

_______________________

MOTION FOR LEAVE TO FILE BRIEF OF AMICI

CURIAE AND BRIEF OF AMICI CURIAE AARP

AND AARP FOUNDATION SUPPORTING

PETITION FOR WRIT OF CERTIORARI

________________________

September 21, 2022

William Alvarado Rivera*

Dean Graybill

*Counsel of Record

AARP FOUNDATION

601 E Street, NW

Washington, DC 20049

(202) 434-6291

warivera@aarp.org

Counsel for Amici Curiae

i

MOTION FOR LEAVE TO FILE BRIEF OF

AMICI CURIAE AARP AND AARP

FOUNDATION SUPPORTING PETITION FOR

WRIT OF CERTIORARI

Pursuant to Supreme Court Rule 37(b), AARP

and AARP Foundation move for leave to file the

attached brief as amici curiae urging the Court to

grant Kevin L. Fair’s Petition for Writ of Certiorari

(No. 22-160). As required by Rule 37.2(a), amici

provided all counsel of record with timely notice of

their intent to file this brief ten days or more before its

due date. Respondent Continental Resources has

refused to consent, necessitating this motion.

AARP and AARP Foundation seek leave

because of their deep concern over the devastating

impact that the Nebraska Supreme Court’s ruling in

Continental Res. v. Fair, 133 Neb. 184 (2022), and

similar rulings, will have on the financial security of

older homeowners of modest means. Here, Nebraska

tax authorities, to collect a $5,300 property tax debt,

conveyed a tax lien and the title to all of Mr. Fair’s

home equity to a private firm, Continental Resources.

The firm foreclosed, paying the debt and keeping over

$54,000 in Mr. Fair’s “surplus equity” for itself. The

court ruled that this astonishing result was

permissible under the Fifth Amendment Takings

Clause. U.S. Const. amend. V.

This is a threat to the financial security of

homeowners that extends well beyond Nebraska. At

least eleven states have statutes permitting this

unjust result. Fair Petition at 29-32. In these states,

ii

older homeowners of modest means, especially, risk

losing what is often their single largest asset.

AARP, with nearly 38 million members age fifty

and older, and its charitable AARP Foundation, are

intimately familiar with this issue. 1 Our proposed

brief first urges the Court to consider the larger policy

implications of the Nebraska court’s key ruling – that

homeowners have no property right in the surplus

equity of their own home, unless state legislatures or

courts affirmatively say so in this precise propertytax-collection context. Continental Res., 311 Neb. at

200. The imposition of this excessive standard of proof

leaves older homeowners defenseless against

property-tax collection laws that, indeed, declare this

self-evident property right to be nonexistent.

Second, AARP and the Foundation wish to

share their deep knowledge regarding the special

threat that such laws pose to older homeowners of

modest means. Decades of study by AARP and others

show that it is this group that, for a wide variety of

reasons, is most at risk of property tax foreclosure in

the first place. Reasons include their low fixed

incomes; rising utility and medical costs; physical and

cognitive ailments; the way they often pay property

taxes (e.g., no escrow); the loss of spouses as financial

advisors; and numerous other factors. Research also

shows why members of this group are likely to suffer

AARP and AARP Foundation have filed amicus briefs on this

“surplus equity” issue in support of the homeowner in numerous

cases, see attached Brief of Amici Curiae AARP and AARP

Foundation Supporting Petition for Writ of Certiorari, n. 5.

1

iii

the most catastrophic consequences if tax collectors

are permitted to seize all their home equity over

modest tax debts. The equity in their home often is

their only sizeable financial asset, and they are not in

a position to make up the loss.

AARP and AARP Foundation respectfully

request leave to file the attached amicus brief in

support of Mr. Fair’s Petition for Writ of Certiorari.

September 21, 2022

Respectfully submitted,

/s/ William Alvarado Rivera

William Alvarado Rivera*

Dean Graybill

AARP Foundation

601 E Street, NW

Washington, DC 20049

Tel: 202 434-3392

Fax: 202-434-6424

warivera@aarp.org

*Counsel of Record

Counsel for AARP and

AARP Foundation

iv

TABLE OF CONTENTS

MOTION FOR LEAVE TO FILE BRIEF OF

AMICI CURIAE AARP AND AARP

FOUNDATION SUPPORTING PETITION

FOR WRIT OF CERTIORARI .................................... i

TABLE OF AUTHORITIES ...................................... vi

STATEMENT OF INTEREST ................................... 1

SUMMARY OF ARGUMENT .................................... 4

ARGUMENT ............................................................... 5

I.

The Nebraska Supreme Court Has

Imposed a Harsh Test of Property

Rights in Surplus Equity at Odds with

Supreme Court Jurisprudence, State

Law, and Common Sense ................................ 5

II.

Older

Homeowners

Face

a

Disproportionate Risk of Experiencing

Severe Harm Due to Tax Foreclosures ........... 9

A.

Older

homeowners

face

extraordinary

economic

pressures that make them

disproportionately vulnerable to

tax foreclosures ................................... 10

v

B.

Many older people are at risk of

tax foreclosures because they no

longer pay their taxes into an

escrow account..................................... 13

C.

Older homeowners are at

increased risk of losing their

home to a tax foreclosure

because

they

have

a

significantly higher incidence of

disability

and

associated

incapacity ............................................ 16

CONCLUSION ......................................................... 17

vi

TABLE OF AUTHORITIES

Cases

Armstrong v. United States, 364 U.S. 40 (1960)......... 7

Brown v. Legal Found. of Wash.,

538 U. S. 216 (2003) ................................................. 8

Coleman v. District of Columbia, 70 F. Supp.3d 58

(D.D.C. 2009) ........................................................ 3, 9

Continental Res. v. Fair, 311 Neb. 184 (2022)... 2, 4, 6

Dorce v. City of New York, No. 19-cv-2216, _

F.Supp.3d _, 2022 WL 2286381 (S.D.N.Y.

June 24, 2022) .......................................................... 9

First Eng. Evangelical Lutheran Church of Glendale

v. Los Angeles Cnty., Cal., 482 U.S. 304 (1987) ...... 7

Knick v. Township of Scott, 139 S.Ct. 2162 (2019)..... 3

Koontz v. St. Johns River Water Mgmt. Dist., 133 S.

Ct. 2586 (2013) ......................................................... 8

Loretto v. Teleprompter Manhattan CATV Corp.,

458 U.S. 419 (1982) .................................................. 8

Lucas v. S.C. Coastal Council,

505 U.S. 1003 (1992) ............................................... 7

Nelson v. City of New York,

352 U.S. 103 (1956) ................................................ 6

vii

Phillips v. Washington Legal Found.,

524 U.S. 156 (1998) .................................................. 5

Rafaeli, LLC v. Oakland Cty.,

952 N.W.2d 434 (Mich. 2020)............................... 3, 8

Tahoe-Sierra Pres. Council v. Tahoe Reg’l

Planning Agency, 535 U.S. 302 (2002) .................... 7

Tyler v. Hennepin Cnty., 26 F.4th 789

(8th Cir. 2022) .......................................................... 3

United States v. Lawton, 110 U.S. 146 (1884) ............ 6

United States v. Taylor, 104 U.S. 216 (1881) ............. 6

Webb’s Fabulous Pharmacies, Inc. v. Beckwith,

449 U.S. 155 (1980) ............................................ 7, 16

Wayside Church v. Van Buren Cnty., 847 F.3d 812

(6th Cir.), cert. denied, 138 S. Ct. 380 (2017) ...... 3, 8

Statutes, Constitutions, Rules and Regulations

Uniform Property Act

Neb. Rev. Stat.§ 40-101 (Reissue 2016) ................... 6

Neb. Rev. Stat. § 76-101 (Reissue 2018) ................. 6

U.S. Const. amend. V .................................................. 5

viii

Miscellaneous Authorities

Aging in Place: Facilitating Choice and

Independence, U.S. Dep’t of Hous. and Urb.

Dev. (Fall 2013), https://bit.ly/3rloGDH .............. 10

Whitney Airgood-Obrycki et al., Housing

America’s Older Adults 2019, Joint Ctr. for

Hous. Stud. of Harv. Univ. 7 (Marcia Fernald

ed., 2019), https:// bit.ly/31mEETO ..................... 11

Sudipto Banerjee, Income Composition, Income

Trends, and Income Shortfalls of Older

Households, Emp. Benefit Research Inst. Issue

Br., No. 383 (Feb. 2013), http://bit.ly/1tYkntI ..... 11

Peter Boersma, Lindsey I. Black, & Brian W. Ward,

Prevalence of Multiple Chronic Conditions Among

US Adults, 2018, 17 Preventing Chronic Disease

1-4 (2020) ............................................................. 16

Foos, Jenna Christine, State Theft in Real Property

Tax Foreclosure Procedures, 54 Real. Prop. Tr. &

Est. L.J. 93, 133 n.32 & 56 (2019) ........................... 2

Housing America’s Older Adults 2019, Joint

Ctr. for Hous. Stud. of Harv. Univ. 7 (Marcia

Fernald ed., 2019), https:// bit.ly/31mEETO ... 11, 12

Housing Wealth and Retirement Savings: Enhancing

Financial Security for Older Americans ................ 11

ix

Sarah B. Mancini & Odette Williamson, Reversing

Course: Stemming the Tide of Reverse Mortgage

Foreclosures Through Effective Servicing and Loss

Mitigation, 26 Elder L.J. 85 (2018) ....................... 15

Jennifer Molinsky, Ten Insights About Older

Households from the 2020 State of the Nation’s

Housing Report, Joint Ctr. for Hous. Studs. of

Harvard Univ. (Dec. 17, 2020), https://

bit.ly/3w2iMew ....................................................... 12

Policy Brief: Protecting Senior Homeowners from

Reverse Mortgage Foreclosure, Center for NYC

Neighborhoods 2 (Aug. 2017) ................................. 15

John Rao, The Other Foreclosure Crisis:

Property Tax Lien Sales, Nat’l Consumer

Law Ctr. (Jul. 2012) ................................... 10, 15, 16

William M. Rohe & Mark Lindblad, Rexamining the

Social Benefits of Homeownership after the Housing

Crisis, Harv. Univ. Joint Ctr. for Hous. Studs.

(Aug. 2013), https://bit.ly/3sscWAD. ...................... 10

Kenneth Terrell, AARP, Unemployment's Toll on

Older Workers Is Worst in Half a Century

(Oct. 21, 2020), https://bit.ly/ 3c3hDLK ................. 12

A. Trawinski, Nightmare on Main Street: Older

Americans and the Mortgage Market Crisis,

AARP Pub. Pol’y Inst. 3 (July 2016),

https://bit.ly/3lU9mwJ ............................................ 9

x

U.S. Dep’t of Hous. and Urban Devel., Home Equity

Conversion Mortgage (HECM) Financial

Assessment and Property Charge Requirements,

Mortgagee Letter 2014-22 (Nov. 10, 2014),

http://1.usa.gov/1MYKrnm............................... 14, 15

Jack VanderHei, Impact of the COVID-19 Pandemic

on Retirement Income Adequacy: Evidence From

EBRI’s Retirement Security Projection Model®,

Emp. Benefits Rsch. Inst. (Apr. 23, 2020),

https://bit.ly/ 3cpihTN. ........................................... 12

Jack VanDerhei, Retirement Savings Shortfalls:

Evidence from EBRI’s 2019 Retirement Security

Projection Model®, Emp. Benefit Rsch. Inst. (Mar.

7, 2019), https://bit.ly/2NUlnps ............................. 12

Odette Williamson & Jillian McLaughlin,

Tax Lien Sales Put Low-Income, Seniors, and

the Disabled at Risk of Foreclosure, 34 Bifocal

1 (Oct. 2012), https://bit.ly/2VgQhtJ ............... 10, 14

Stacey Wood & Peter A. Lichtenberg, Financial

Capacity and Financial Exploitation of Older

Adults: Research Findings, Policy

Recommendations and Clinical Implications, 40

Clinical Gerontologist 3-13 (2017) ......................... 15

James P. Ziliak & Craig Gundersen, The

State of Senior Hunger in America in 2018,

Feeding America 4 (May 21, 2020),

https://bit.ly/3d5SZte .............................................. 13

1

STATEMENT OF INTEREST 1

It is undisputed that Nebraska tax authorities,

to collect a $5,300 property tax debt, seized from Kevin

Fair his entire $60,000 in home equity and conveyed

it via tax deed to a private buyer of the government’s

tax lien.

The buyer, Continental Resources,

ultimately foreclosed on Mr. Fair, keeping over

$54,000 for itself. This shocking result was not some

aberration, but rather a routine feature of present

Nebraska property tax collection law. And Nebraska

is not alone in permitting state seizure of home

“surplus equity” in such proceedings. As many as a

dozen states permit the seizure of all the homeowner’s

equity to pay modest property tax debts. 2 Some states,

like Nebraska, accomplish this by conveying tax liens

and deeds to private investors; others, like

Minnesota, 3 directly confiscate the funds for their own

1 Pursuant to the Court’s Rule 37.6, amici state that this brief

was not authored in whole or part by any party or its counsel and

that no person other than amici, their members, or their counsel

contributed any money that was intended to fund the preparation

and submission of this brief. Pursuant to this Court’s Rule

37.2(a), amici provided all counsel of record with timely notice of

the intent to file this brief ten days or more before its due date.

A letter by petitioner consenting to the filing of the amicus brief

is on file with the Court. Respondent Scotts Bluff County has

also consented, but Respondent Continental Resources has not

consented.

2 Fair Petition for Writ of Certiorari (No. 22-160) (hereinafter

“Fair Pet.”) at 29-32.

3 Amici also will be filing a motion for leave to file an amicus brief

supporting Geraldine Tyler’s Petition for Writ of Certiorari in

2

coffers. Foos, Jenna Christine, State Theft in Real

Property Tax Foreclosure Procedures, 54 Real. Prop.

Tr. & Est. L.J. 93, 133 n.32 & 56 (2019). Either way,

homeowners lose thousands of dollars of home equity

that they, not the government or private investors,

earned through years of financial sacrifice.

Nevertheless, the Nebraska Supreme Court upheld

the constitutionality of this statute. Continental Res.

v. Fair, 311 Neb. 184 (2022).

Amici strongly support Fair’s petition asking

that the Court accept review of the case and condemn

the Nebraska statute as violating the Constitution’s

Fifth Amendment Takings Clause (“Nor shall private

property be taken for public use, without just

compensation.” 4) Such laws are of extreme concern to

amici AARP and AARP Foundation, given their

devastating and disproportionate impact on the

financial security of older adults. AARP is the nation’s

largest nonprofit, nonpartisan organization dedicated

to empowering Americans 50 and older to choose how

they live as they age. With nearly 38 million members

and offices in every state, the District of Columbia,

Puerto Rico, and the U.S. Virgin Islands, AARP works

to strengthen communities and advocate for what

matters most to families, with a focus on financial

stability, health security, and personal fulfillment.

AARP’s charitable affiliate, AARP Foundation, works

to end senior poverty by helping vulnerable older

Tyler v. Hennepin Cnty, No. 22-166, addressing

constitutionality of that Minnesota direct-confiscation law.

4

U.S. Const. amend. V.

the

3

adults build economic

connectedness.

opportunity

and

social

Amici’s efforts have included filing amicus

briefs in state and federal court on this precise issue. 5

Amici agree with Petitioner Fair that review by the

Supreme Court is needed to settle the deep and

growing split among the lower courts about whether

the Fifth Amendment’s Takings Clause prevents

government from seizing property tax debtors’ home

equity in excess of the taxes, penalties, interest, and

costs that are owed. Fair Pet. at 17-21 (conflicts with

Supreme Court precedent); 21-24 (conflicts on this

issue in the federal and state courts). 6

Cases in which AARP and AARP Foundation filed amicus

briefs in support of the homeowner include Knick v. Township of

Scott, 139 S.Ct. 2162 (2019); Tyler v. Hennepin Cnty., 26 F.4th

789 (8th Cir. 2022); Wayside Church v. Van Buren Cnty., 847 F.3d

812 (6th Cir. 2017), cert. denied, 138 S. Ct. 380 (2017); Coleman

v. District of Columbia, 70 F. Supp.3d 58 (D.D.C. 2009); Rafaeli,

LLC v. Oakland Cnty., 952 NW.2d 434 (2020).

5

Amici address herein only the Takings Clause claims raised by

Plaintiffs-Appellants.

6

4

SUMMARY OF ARGUMENT

First, we urge the Court to consider the larger

policy implications of the Nebraska court’s

remarkable finding that Mr. Fair never owned a

property interest in the equity in his own home. To

establish this obvious property right, Mr. Fair had

pointed to English and American common law,

Supreme Court decisions, and Nebraska statutes –

and common sense – but this was not enough for the

court. Instead, the court opined, no such right existed

unless Nebraska statutes or court decisions expressly

confirmed it in this precise property-tax-collection

context, i.e., “after a tax certificate has been sold, the

redemption period has expired, and a tax deed is

requested and issued.” Continental Res., 311 Neb. at

200.. This harsh, counterintuitive standard makes a

mockery of the Fifth Amendment’s protection against

government seizure of property without “just

compensation.” U.S. Const. amend. V.

Second, amici further seek to assist the Court

by illuminating in detail the human cost of such laws

for the nation’s older citizens in particular. In those

states with these confiscatory laws, the most-injured

victims, in disproportionate numbers, will be older

homeowners of modest means. First, they are the

group most at risk of property tax foreclosure in the

first place, often for reasons beyond their control.

Many live on low fixed incomes and face dramatically

rising utility and medical costs, physical ailments, and

the need to navigate complex financial waters without

the help of a spouse or financial advisor. Second, it is

often older homeowners who suffer the most

5

catastrophic consequences when tax collectors

unjustly seize all their home equity over modest tax

debts. For these people, the equity in their home often

is their only sizeable financial asset. Out of the

workforce and living on modest income, these

individuals can never recoup the loss.

ARGUMENT

I.

The Nebraska Supreme Court Has

Imposed a Harsh Test of Property Rights

in Surplus Equity at Odds with Supreme

Court Jurisprudence, State Law, and

Common Sense.

Mr. Fair’s plight amply illustrates AARP’s and

AARP Foundation’s extreme concern. Mr. Fair, in his

late fifties, was forced to quit his job in 2014 when his

wife developed multiple sclerosis and required a

caretaker. Facing rising medical costs and living only

on Social Security, Mr. Fair could not pay the $588

owed in property tax in 2014. To collect the debt, the

government sold its tax lien to Continental. Four

years later, the debt had ballooned to an unpayable

$5,300 via interest and costs. Scotts Bluff County

thereupon issued a tax deed to Continental

extinguishing Mr. Fair’s ownership of all his home’s

equity, valued at $59,759. Continental foreclosed,

paying the $5,300 debt and seizing over $54,000

surplus equity for itself, leaving Fair with nothing.

Fair challenged the County’s issuance of the tax

deed on several grounds, including the Takings Clause

of the Fifth Amendment (“Nor shall private property

6

be taken for public use, without just compensation.”)

U.S. Const. amend. V. Fair, to prove the obvious –

that he owned the equity in his own home7 – pointed

to numerous authorities, including, among others,

Supreme Court decisions embracing the property

right in surplus equity; 8 an abundance of English and

American common law; definitions of property in

Nebraska’s Uniform Property Act, revenue and

taxation statutes, and homestead exemption

and

Nebraska

court

decisions

provisions; 9

interpreting those statutes.

Given the intuitive existence of this property

right, that should have been more than enough.

Instead, the Nebraska Supreme Court imposed a

hyper technical, harsh standard assuming no such

property right existed unless the legislature happened

to articulate one in this precise circumstance:

These

[other]

general

provisions,

however, do not recognize a property

interest in the surplus equity value of

See Phillips v. Washington Legal Found., 524 U.S. 156, 164

(1998) (“Because the [Takings Clause] protects rather than

creates property interests, the existence of a property interest is

determined by reference to existing rules or understandings that

stem from an independent source such as state law.”).

7

These included United States v. Taylor, 104 U.S. 216 (1881);

United States v. Lawton, 110 U.S. 146 (1884), and Nelson v. City

of New York, 352 U.S. 103 (1956).

8

Neb. Rev. Stat. § 76-101 (Reissue 2018) (Uniform Property Act);

id. § 77-102 (Reissue 2018) (revenue and taxation statutes); id.

§ 40-101 (Reissue 2016) (homestead exemption).

9

7

property after a tax certificate has been

sold, the redemption period has expired,

and a tax deed is requested and issued.

Continental Res., 311 Neb. at 200.

This approach places on Mr. Fair’s shoulders a

burden of persuasion that offends common sense and

Takings Clause jurisprudence.

If this were a

traditional mortgage foreclosure, no American

homeowner would believe the lender is entitled to

seize home equity worth ten times the size of a debt.

Yet that is what occurred here by government fiat.

The Nebraska Supreme Court’s harsh standard for

proving ownership of surplus equity eviscerates the

Constitution’s promise that “the government’s power

to redefine [property rights is] necessarily constrained

by constitutional limits.” Lucas v. S.C. Coastal

Council, 505 U.S. 1003, 1014 (1992); see also First Eng.

Evangelical Lutheran Church of Glendale v. Los

Angeles Cnty., Cal., 482 U.S. 304, 314 (1987) (The

Takings Clause “places a condition on the

[government’s] exercise of” the power to take private

property in the first instance).

The government has no more leeway than a

private mortgage lender to wave a legal wand and

extinguish a homeowner’s equity exceeding the debt.

See, e.g., Webb’s Fabulous Pharmacies, Inc. v.

Beckwith, 449 U.S. 155, 164 (1980) (the State of

Florida cannot “transform private property into public

property

without

compensation”

by

simply

recharacterizing interest in funds held by the court as

“public money”); Armstrong v. United States, 364 U.S.

8

40, 44-45 (1960) (ship contractor property rights do not

“vanish into thin air” just because Government seeks

to collect its own debt). When the government

“physically takes possession of an interest in property

for some public purpose, it has a categorical duty to

compensate the former owner. . . .” Tahoe-Sierra Pres.

Council v. Tahoe Reg’l Plan. Agency, 535 U.S. 302, 322

(2002) (citation omitted). 10

Referring to Michigan’s similar property tax

foreclosure law, one federal judge bluntly observed,

“[i]n some legal precincts that sort of behavior is called

theft.” 11 The Michigan Supreme Court subsequently

struck down that law as violating the Takings Clause

of the state constitution, Rafaeli, LLC v. Oakland

Cnty., 952 N.W.2d 434 (Mich. 2020). Call it what you

will, Nebraska’s law, too, fails to honor the

fundamental principles of the Takings Clause.

Petitioner observes that the high courts of Michigan,

Minnesota, Mississippi, New Hampshire, Vermont,

Here, unlike some cases, there is no genuine disagreement

that there was an act of “taking.” “When the government

commands the relinquishment of funds linked to a specific,

identifiable property interest such as a . . . parcel of real property,

a ‘per se [takings] approach’ is the proper mode of analysis . . .”

Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595, 614

(2013) (quoting Brown v. Legal Found. of Wash., 538 U. S. 216,

235 (2003); see also Loretto v. Teleprompter Manhattan CATV

Corp., 458 U.S. 419, 430, 436 (1982) (holding that the

government’s taking physical control over a property interest for

public use is a taking per se).

10

11 Wayside Church v. Van Buren Cnty., 847 F.3d 812, 823 (6th Cir.

2017) (Kethledge, J., dissenting), reopened under Rule 60, No. 14CV-01274, ECF No. 64.

9

and Virginia – plus federal district courts in Michigan,

Ohio, and West Virginia – have recognized that the

government acts unconstitutionally when it forecloses

on property to collect delinquent taxes or related debts

and keeps more than it is owed. Fair Pet. at 21-22.12

Amici respectfully recommend that the Court accept

this case for review and resolve the split in the lower

courts.

II.

Older

Homeowners

Face

a

Disproportionate Risk of Experiencing

Severe Harm Due to Tax Foreclosures.

Homeownership is the lynchpin of well-being

for older Americans. As of the fourth quarter of 2020,

approximately 28 million (80.2 percent) of 34.93

million householders over age 65 owned their homes.

Indeed, “[o]lder Americans often use[ ] their home

equity in retirement to finance health care, home

maintenance, and other large expenses and as a safety

net that could be used to meet unexpected needs.” Lori

A. Trawinski, Nightmare on Main Street: Older

Americans and the Mortgage Market Crisis, AARP

Pub. Pol’y Inst. 3 (July 2016), https://bit.ly/3lU9mwJ.

“For most older people, the home is . . . their most

valuable asset.” Id.

12 In two further New York and District of Columbia federal court

cases, plaintiffs’ allegations that government’s seizure of surplus

equity was unconstitutional survived motions to dismiss. Dorce

v. City of New York, No. 19-cv-2216, _ F.Supp.3d _, 2022 WL

2286381, at *12 (S.D.N.Y. June 24, 2022); Coleman through Bunn

v. D.C., No. 13-1456, 2016 WL 10721865 *2-3 (D.D.C. June 11,

2016).

10

Yet, for many reasons, older people face

disproportionate risk of losing their homes to tax

foreclosures. These include fixed incomes, rising

costs, higher incidence of disability, and having no

escrow account to cover property taxes (because

owners have no mortgage payment or have a subprime

or reverse mortgage).

John Rao, The Other

Foreclosure Crisis: Property Tax Lien Sales, Nat’l

Consumer Law Ctr. at 5, 8-10 (Jul. 2012),

http://bit.ly/1MLTZMc

(hereafter

“The

Other

Foreclosure Crisis”); Odette Williamson & Jillian

McLaughlin, Tax Lien Sales Put Low-Income, Seniors,

and the Disabled at Risk of Foreclosure, 34 Bifocal 1

(Oct.

2012),

https://bit.ly/2VgQhtJ

(hereafter

“Williamson & McLaughlin, Tax Lien Sales”).

Thus, it is Nebraska’s older, most vulnerable

citizens who are most likely to be victimized by

Nebraska’s tax foreclosure law and feel the effects

most strongly. Home equity is a fundamental source

of family stability and financial security for this

population. William M. Rohe & Mark Lindblad,

Reexamining the Social Benefits of Homeownership

after the Housing Crisis, Harv. Univ. Joint Ctr. for

Hous. Studs. (Aug. 2013), https://bit.ly/3sscWAD.

A.

Older

homeowners

face

extraordinary economic pressures

that make them disproportionately

vulnerable to tax foreclosures.

Rising costs, coupled with low income, play a

significant role in making many older people

extremely vulnerable to losing their homes through

11

tax foreclosures. Aging in Place: Facilitating Choice

and Independence, U.S. Dep’t of Hous. and Urb. Dev.

(Fall 2013), https://bit.ly/3rloGDH. One problem is

that a growing share of older households are carrying

housing and other debt into their retirement years.

Whitney Airgood-Obrycki et al., Housing America’s

Older Adults 2019, Joint Ctr. for Hous. Stud. of Harv.

Univ. 7 (Marcia Fernald ed., 2019), https://

bit.ly/31mEETO. In 2016, 46 percent of homeowners

aged 65-79, and 26 percent of homeowners over 80,

had mortgage debt. Id.

Older adults who own their homes also have

other significant housing related costs, including

taxes, utilities, insurance, and repairs and

maintenance; yet, such costs are often difficult to

afford for older adults who no longer work and have

limited retirement income. Id. at 6-7. More than one

in four homeowners 65 and older is cost-burdened

(paying more than 30 percent of income for housing).

Id. at 8. That percentage is even greater among

homeowners still paying off mortgage debt, with 43

percent of homeowners 65 and older having cost

burdens. Id. Older adults with housing cost burdens

may cut back on other necessary budget items – in

2018 burdened households in the bottom quartile of

expenditures spent only $195 a month on food, while

those without burdens spent an average of $368. Id.

at 9. Similarly, they spend 50% less on average for

out-of-pocket healthcare than those without burdens.

Id.

Older persons also are more likely to take on

debt to aid or pay the debts of a family member,

12

thereby making them more vulnerable in adverse

economic conditions. Id. at 8. As basic expenses such

as housing, utilities, prescription drugs, and health

care continue to rise, many people now enter their

retirement years incurring costs for basic needs that

exceed their modest or limited incomes. 13

Increasingly, this includes their own, or family

members’, school debt. The share of households aged

50-64 with student loan debt doubled from 7 percent

of households in 2001 to 16 percent in 2016. Id. at 78.

Older Nebraska homeowners also may be

suffering lingering financial effects from losses during

the COVID-19 pandemic.

In 2020 aggregate

retirement deficits had been projected to increase by

11.2% or $412.77 billion. 14 Many older adults have

lost income because of the pandemic, with 21 percent

of homeowners over age 65 reporting loss of

employment income in 2020. Jennifer Molinsky, Ten

Insights About Older Households from the 2020 State

of the Nation’s Housing Report, Joint Ctr. for Hous.

Studs. of Harvard Univ. (Dec. 17, 2020), https://

bit.ly/3w2iMew. Five percent of older homeowners

reported having fallen behind on housing payments.

Id. Initial job losses from the pandemic hit older

13 Jack VanDerhei, Retirement Savings Shortfalls: Evidence from

EBRI’s 2019 Retirement Security Projection Model®, Emp.

Benefit Rsch. Inst. (Mar. 7, 2019), https://bit.ly/2NUlnps.

14 Jack VanderHei, Impact of the COVID-19 Pandemic on

Retirement Income Adequacy: Evidence from EBRI’s Retirement

Security Projection Model®, Emp. Benefits Rsch. Inst. (Apr. 23,

2020), https://bit.ly/ 3cpihTN.

13

adults harder than similarly situated younger

workers. Kenneth Terrell, AARP, Unemployment’s

Toll on Older Workers Is Worst in Half a Century (Oct.

21, 2020), https://bit.ly/ 3c3hDLK. During the first six

months of the COVID-19 pandemic, workers aged 55

and older were 17 percent more likely to lose their jobs

than employees a few years younger. Id.

Finally, economic security is particularly

tenuous for older people in the lowest income brackets,

who suffer hunger or food insecurity due to income

shortfalls. An estimated 5.3 million seniors, or 7.3%

of the U.S. senior population, were food insecure in

2018. James P. Ziliak & Craig Gundersen, The State

of Senior Hunger in America in 2018, Feeding America

4 (May 21, 2020), https://bit.ly/3d5SZte. “[F]or those

with incomes below the poverty line, 29.5% were food

insecure.” Id.

In sum, it is older Nebraska citizens of modest

means, struggling with chronic income shortfalls, who

are most likely to struggle paying their property taxes.

That means they also are the group most likely to lose

all the equity surplus in their homes as a result of

Nebraska’s confiscatory property tax foreclosure law.

B.

Many older people are at risk of tax

foreclosures because they no longer

pay their taxes into an escrow

account.

For many people with a mortgage, a portion of

their property taxes is collected with their monthly

payment and held in an escrow account until the taxes

14

are due. At that time, the mortgage servicer pays

taxes directly to the taxing authority. Ironically,

paying off one’s mortgage – a potential sign of greater

economic security – often plays a significant role in

greater vulnerability to tax delinquency and tax

foreclosure. Williamson & McLaughlin, Tax Lien

Sales, supra.

Upon paying off a mortgage,

homeowners assume responsibility for setting aside

sufficient funds to pay taxes when they come due and

for making payment themselves. This adjustment can

create significant problems for older homeowners,

particularly for those who have difficulty with

financial decision making or have diminished capacity

or disabilities. They may not understand the process,

inadvertently miss payment dates, or be unable to set

aside sufficient funds to pay tax bills when required.

Id.

Similarly, homeowners who have reverse or

subprime mortgage loans face challenges paying their

taxes. Reverse mortgages, a product largely serving

older homeowners, generally do not feature escrow

accounts for taxes. Hence, as with older homeowners

who no longer make mortgage payments, those with

reverse mortgages must manage tax (and insurance)

payments on their own. 15 “[A] lack of understanding

15 Reverse mortgages insured through the Home Equity

Conversion Mortgage (HECM) Program permit borrowers 62

years or older to obtain a lump sum or line of credit based on the

value of their home. They are not required to make payments on

the reverse mortgage while they continue to live in the home, but

they must carry hazard insurance and make tax payments.

Reverse mortgage servicers are required to protect the security

for the mortgage by paying property tax on the borrower’s behalf

if taxes become delinquent. This shifts to the borrower the risk

15

that they were required to pay these charges” was “the

most significant factor” for the recent surge in (mostly

older) reverse mortgage borrowers “losing their homes

to foreclosure.”

Sarah B. Mancini & Odette

Williamson, Reversing Course: Stemming the Tide of

Reverse Mortgage Foreclosures Through Effective

Servicing and Loss Mitigation, 26 Elder L.J. 85, 102

(2018) (citing 2012 Report to Congress by the

In

Consumer Financial Protection Bureau). 16

addition, “the vast majority of subprime mortgage

loans made prior to 2008 did not include an escrow

account”; indeed, “[s]ome lenders used the lower

monthly loan payment to induce consumers into

believing the loans were affordable.” The Other

Foreclosure Crisis, supra at 5.

of foreclosure, as HUD requires the servicer to declare the

mortgage due and payable if the borrower does not repay

property taxes advanced. See U.S. Dep’t of Hous. and Urb. Dev.,

Home Equity Conversion Mortgage (HECM) Financial

Assessment and Property Charge Requirements, Mortgagee

Letter 2014-22 (Nov. 10, 2014), http://1.usa.gov/1MYKrnm.

In November 2016, HUD reported nearly 90,000 reverse

mortgages in default on property charges, mostly consisting of

tax or insurance shortfalls. Id.; see also Policy Brief: Protecting

Senior Homeowners from Reverse Mortgage Foreclosure, Ctr. for

NYC Neighborhoods (Aug. 2017), https://bit.ly/3w7wFIo

(reporting that “[n]ationwide, reverse mortgage defaults from

taxes and insurance doubled from 2015 to 2016”).

16

16

C.

Older homeowners are at increased

risk of losing their home to a tax

foreclosure because they have a

significantly higher incidence of

disability and associated incapacity.

“Homeowners most at risk [of losing their

homes to tax foreclosure] are those who have fallen

into default because they are incapable of handling

their financial affairs, such as individuals suffering

from Alzheimer’s, dementia, or other cognitive

disorders.” The Other Foreclosure Crisis, supra at 5.

The risk of having such disorders increases

exponentially with advancing age. Stacey Wood &

Peter A. Lichtenberg, Financial Capacity and

Financial Exploitation of Older Adults: Research

Findings, Policy Recommendations and Clinical

Implications, 40 Clinical Gerontologist 3-13 (2017);

Peter Boersma, Lindsey I. Black & Brian W. Ward,

Prevalence of Multiple Chronic Conditions Among US

Adults, 2018, 17 Preventing Chronic Disease 1-4

(2020).

The factors that make many older people

particularly vulnerable to becoming delinquent on

their taxes also make them least able to save their

homes and avoid the devastating loss of their equity.

Some will be forced into nursing homes prematurely,

and others may be forced to rely on government

benefits. The Fifth Amendment Takings Clause was

designed to prevent such effects of the “arbitrary use

of governmental power.” Webb’s Fabulous Pharms.,

449 U.S. at 164.

17

CONCLUSION

For the reasons set forth above, amici curiae

AARP and AARP Foundation urge the Court to grant

Kevin Fair’s Petition for Writ of Certiorari.

September 21, 2022

Respectfully submitted,

/s/ William Alvarado Rivera

William Alvarado Rivera*

Dean Graybill

AARP Foundation

601 E Street, NW

Washington, DC 20049

Tel: 202 434-3392

Fax: 202-434-6424

warivera@aarp.org

*Counsel of Record

Counsel for Amici Curiae

AARP and AARP

Foundation