Amicus Curiae Brief — Michael Pung, Personal Representative of the Estate of Timothy Scott Pung, Petitioner v. Isabella County, Michigan

No. 25-95

IN THE

Supreme Court of the United States

MICHAEL PUNG, PERSONAL REPRESENTATIVE OF THE

ESTATE OF TIMOTHY SCOTT PUNG,

Petitioner,

v.

ISABELLA COUNTY, MICHIGAN,

Respondent.

On Writ of Certiorari To The

United States Court Of Appeals

For The Sixth Circuit

BRIEF FOR AMICI CURIAE

NATIONAL ASSOCIATION OF REALTORS®,

MICHIGAN REALTORS®, WISCONSIN

REALTORS® ASSOCIATION, AND

AMERICAN PROPERTY OWNERS

ALLIANCE IN SUPPORT OF PETITIONER

SAMUEL V. LIOI

JONES DAY

901 Lakeside Avenue

Cleveland, OH 44114

BRINTON LUCAS

Counsel of Record

JONES DAY

51 Louisiana Ave., NW

Washington, DC 20001

(202) 879-3939

blucas@jonesday.com

Counsel for Amici Curiae

i

TABLE OF CONTENTS

Page

INTEREST OF AMICI CURIAE ............................... 1

SUMMARY OF ARGUMENT .................................... 3

ARGUMENT .............................................................. 4

I.

II.

SEIZING HOME EQUITY WITHOUT JUST

COMPENSATION VIOLATES THE TAKINGS

CLAUSE. ............................................................ 4

A.

Traditionally, “just compensation” is the property’s fair market

value at the time of the taking. ............ 5

B.

This rule applies to tax foreclosures. ..................................................... 6

THE TAKINGS CLAUSE DOES NOT ALLOW

AN EXCEPTION FOR TAX FORECLOSURES. ......... 9

A.

Surplus proceeds are not the

property interest taken in a tax

foreclosure. .......................................... 10

B.

Foreclosure-sale prices are not

dispositive evidence of the value

of home equity. .................................... 13

C.

This Court should not manufacture a tax-foreclosure exception

for policy reasons. ............................... 16

CONCLUSION ......................................................... 20

ii

TABLE OF AUTHORITIES

Page(s)

CASES

BFP v. Resolution Trust Corp.,

511 U.S. 531 (1994) ........................................ 14, 15

Blossom v. Milwaukee & C.R.R. Co.,

70 U.S. 196 (1865) ................................................ 18

Bronson v. Kinzie,

42 U.S. 311 (1843) .................................................. 8

Casborne v. Scarfe,

26 Eng. Rep. 377 (1737) ......................................... 7

Cont’l Res. v. Fair,

10 N.W.3d 510 (Neb. 2024) .................................... 8

Dutchess of Hamilton v. Countess of

Dirlton & Lord Cranborne,

21 Eng. Rep. 539 (1654) ......................................... 7

Emanuel College v. Evans,

21 Eng. Rep. 494 (1625) ......................................... 7

Freed v. Thomas,

81 F.4th 655 (6th Cir. 2023) .......................... 13, 14

Gelfert v. Nat’l City Bank of N.Y.,

313 U.S. 221 (1941) .............................................. 14

Grady v. Wood County,

786 F. Supp. 3d 984

(S.D. W. Va. 2025) .................................................. 8

iii

Hall v. Meisner,

51 F.4th 185 (6th Cir. 2022) ........6-8, 10-13, 16, 20

Horne v. Dep’t of Agric.,

576 U.S. 350 (2015) .......................... 5, 6, 12, 15, 16

Knick v. Twp. of Scott,

588 U.S. 180 (2019) .............................................. 11

Mississippi & Rum River Boom Co. v.

Patterson,

98 U.S. 403 (1878) .................................................. 5

Monongahela Navigation Co. v. United

States,

148 U.S. 312 (1893) ...................................... 5, 9, 15

Pawlett v. Attorney General,

145 Eng. Rep. 550 (1678) ....................................... 7

Rafaeli, LLC v. Oakland County,

952 N.W.2d 434 (Mich. 2020) ......... 8, 10-12, 16, 19

Tyler v. Hennepin County,

598 U.S. 631 (2023) .................. 3, 5, 6, 9, 13, 16, 19

United States ex rel. TVA v. Powelson,

319 U.S. 266 (1943) .............................................. 18

United States v. 564.54 Acres of Land,

441 U.S. 506 (1979) .............................................. 14

United States v. Gen. Motors Corp.,

323 U.S. 373 (1945) ................................................ 8

iv

United States v. New River

Collieries Co.,

262 U.S. 341 (1923) .............................................. 17

United States v. Toronto, Hamilton &

Buffalo Navigation Co.,

338 U.S. 396 (1949) ........................................ 16, 18

CONSTITUTIONAL AND STATUTORY AUTHORITIES

U.S. Const., amend. V ............................................. 3, 5

Fla. Stat. § 197.502 ................................................... 18

Mich. Comp. Laws § 211.78m ................................... 18

Ohio Rev. Code § 5721.19.......................................... 18

1779 S.C. Acts § 4 ........................................................ 6

1777 Va. Acts ch. XII ................................................... 6

Wis. Stat. § 75.35....................................................... 18

OTHER AUTHORITIES

Bartell, Tax Foreclosures As Fraudulent

Transfers—Are Auctions Really

Necessary?, 93 Am. Bankr. L.J. 681

(2019) .................................................................... 17

Ely, “That Due Satisfaction May Be

Made”: The Fifth Amendment and

the Origins of the Compensation

Principle, 36 Am. J. Legal Hist. 1

(1992) ...................................................................... 6

v

Fed. R. Civ. P. 56 ....................................................... 18

Fed. R. Evid. 301 ....................................................... 18

Holdsworth, A History of English Law

(1924) ...................................................................... 7

Lloyd, Mortgages-the Genesis of the Lien

Theory, 32 Yale L.J. 233 (1923) ............................. 8

Massachusetts Body of Liberties, in

Perry, Sources of Our Liberties

(1978) ...................................................................... 6

Sugarman & Warrington, Land Law,

Citizenship, and the Invention of

“Englishness”, in Early Modern Conceptions of Property (1995) .................................... 7

INTEREST OF AMICI CURIAE *

Amicus curiae the National Association of REALTORS® is a national trade association representing

over 1.4 million members, including its institutes, societies, and councils involved in all aspects of the residential and commercial real estate industries. Members are residential and commercial brokers, salespeople, property managers, appraisers, counselors, and

others engaged in the real estate industry. Members

belong to one or more of the approximately 1,200 local

and 54 state and territory associations of REALTORS® and support private property rights, including the right to own, use, and transfer real property.

Michigan REALTORS® is Michigan’s largest nonprofit trade association, comprised of 38 local boards

with membership of more than 34,000 brokers and

salespersons licensed under Michigan law. It is the

recognized public-policy and legal advocate for private

property rights and the real estate industry in Michigan, as well as the acknowledged leading resource for

professional development, knowledge exchange, and

wide-ranging business services.

Wisconsin REALTORS® Association (WRA) is a

non-profit, professional trade association of member

REALTORS® and affiliate members in the State of

Wisconsin. Its membership consists of approximately

18,500 real estate agents, brokers, developers, and

other real estate professionals throughout Wisconsin.

WRA represents its members before the Wisconsin

Legislature, state regulatory agencies, and federal,

* No counsel for any party authored any portion of this brief

or made any monetary contribution intended to fund its preparation or submission.

2

state, and local courts to promote the interests of the

real estate industry and property owners throughout

Wisconsin, including questions pertaining to the authority of governmental entities to follow fair and just

property-tax-foreclosure practices.

Amicus curiae the American Property Owners Alliance is a nonprofit advocacy organization dedicated to

representing the rights and interests of property owners throughout the country.

Amici are interested in this case not only because it

involves the fair market value of homes—a subject

with which amici and their members are quite familiar—but also because it represents one of many troubling examples of government encroachment on property rights today. Tax-foreclosure regimes such as the

one Michigan uses can result in governments seizing

private property without just compensation. The equity that homeowners build in their properties is

among the most cherished and important property

rights protected by law. Permitting the government to

take these vested property rights without providing

just compensation undermines a core premise of property ownership. These takings significantly impact

the real estate industry because they divest property

owners of millions of dollars in equity each year. Amici

therefore have an interest in seeing that property

owners are not stripped of their equity interests without the just compensation required by the Fifth

Amendment.

3

SUMMARY OF ARGUMENT

I. The Takings Clause guarantees that “private

property” shall not “be taken for public use, without

just compensation.” U.S. Const., amend. V. Just three

Terms ago, this Court unanimously held that the taking of property through a tax foreclosure is still a taking. Tyler v. Hennepin County, 598 U.S. 631 (2023).

This case addresses the follow-on question of remedy:

When a State takes a property via tax foreclosure,

what is “just compensation”—the value of the equitable interest in the home at the time of the taking or

some lesser amount from a forced sale thereafter?

Text, history, and precedent confirm that the Takings Clause requires the former. That provision ensures that a property owner receives full compensation for the taken property—traditionally, its fair

market value at the time of the taking. For a tax foreclosure, then, the seized property is the owner’s home

equity—the difference between the property’s value

and debts owed. Yet after seizing Mr. Pung’s home equity of around $192,000, the County gave him only the

roughly $74,000 (or 38%) left over from the tax-foreclosure sale, thereby denying him over 60% of what he

was owed. That is not just compensation.

II. The County’s excuses for this constitutional violation do not hold water.

First, the County has mischaracterized the property interest here as “surplus proceeds” rather than

equity in the property. But the surplus proceeds from

a later sale is not itself a freestanding property interest under traditional property law. Rather, it is at best

a proxy for the actual property interest seized when

title is extinguished—the equity in the home.

4

Second, there is no reason to conclude that the posttaking foreclosure-sale price represents the fair market value of the taken property (home equity). While

a sale price can sometimes provide evidence of fair

market value, it is not always dispositive. To the contrary, the price secured at a forced sale such as the

one here is the opposite of fair market value.

Finally, policy concerns do not warrant the creation

of a tax-foreclosure exception to the rule that fair market value represents “just compensation.” This Court

has declined to adopt such a consequentialist approach before, and it should not embrace one now. Adhering to the traditional meaning of “just compensation” here would not render tax-foreclosure schemes

unworkable. And regardless, purported administrative convenience does not absolve the States of their

constitutional obligation to refrain from taking property without just compensation.

ARGUMENT

I.

SEIZING HOME EQUITY WITHOUT JUST COMPENSATION VIOLATES THE TAKINGS CLAUSE.

In applying the Takings Clause, this Court has

long adhered to a straightforward rule for determining just compensation—the owner is due the fair market value of the seized property at the time it was

taken. In the context of tax foreclosures, that is the

fair market value of the debtor’s equity in the taken

home—the value of the dwelling beyond its encumbrances. The County ignored this framework in taking

Mr. Pung’s home, selling it at a bargain-basement

price, and depriving him of over 60% of the value of

his equity.

5

A. Traditionally, “just compensation” is the

property’s fair market value at the time

of the taking.

The Takings Clause commands that “private property” shall not “be taken for public use, without just

compensation.” U.S. Const., amend. V. In doing so, it

forbids governments “‘from forcing some people alone

to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.’” Tyler,

598 U.S. at 647.

Key to this framework is the requirement of “just

compensation.” If the government could seize private

property for pennies on the dollar, it would have little

reason to refrain from taking what it wanted. This

Court has therefore long read the Takings Clause to

forbid governments from requisitioning private property for public use “unless a full and exact equivalent

for it be returned to the owner.” Monongahela Navigation Co. v. United States, 148 U.S. 312, 326 (1893).

This not only deters state actors from taking property

on the cheap, it also flows naturally from the Clause’s

text. As this Court has observed, the combination of

“[t]he noun ‘compensation’” and “the adjective ‘just’”

leave “no doubt” that the price “must be a full and perfect equivalent for the property taken.” Id. And to find

that equivalent, this Court has long adhered to “a

clear and administrable rule”—“just compensation

normally is to be measured by the market value of the

property at the time of the taking.” Horne v. Dep’t of

Agric., 576 U.S. 350, 368-69 (2015) (cleaned up); see,

e.g., Mississippi & Rum River Boom Co. v. Patterson,

98 U.S. 403, 408 (1878) (“The inquiry … must be what

is the property worth in the market”).

6

Indeed, this approach stretches back to before the

Takings Clause. For example, Massachusetts’s Body

of Liberties from 1641 forbade the seizure of private

property “without such reasonable prices and hire as

the ordinarie rates of the Countrie do afford.” Horne,

576 U.S. at 358 (quoting Massachusetts Body of Liberties ¶ 8, in Perry, Sources of Our Liberties 149

(1978)). South Carolina likewise required that any seizure of “necessaries” “be paid for agreeable to the

prices such and the like articles sold for on the ninth

day of October last.” Id. at 359 (quoting 1779 S.C. Acts

§ 4). And Virginia allowed the taking of surplus food

for the military only upon “tendering to the owner the

price so estimated by the appraisers.” Id. at 358-59

(quoting 1777 Va. Acts ch. XII). In doing so, it followed

the mill acts of many colonies, which required payment of “the appraised value when land was taken for

a mill site.” Ely, “That Due Satisfaction May Be Made”:

The Fifth Amendment and the Origins of the Compensation Principle, 36 Am. J. Legal Hist. 1, 12 (1992).

B. This rule applies to tax foreclosures.

That basic framework does not vanish when tax

foreclosures are involved. A tax foreclosure occurs

when a government takes “‘absolute title’” to “homes

as payment for tax delinquencies.” Hall v. Meisner, 51

F.4th 185, 189 (6th Cir. 2022). When those debts

dwarf a home’s worth, the Takings Clause demands

no compensation. See Tyler, 598 U.S. at 637-38. But

as Judge Kethledge has explained, when tax delinquencies amount “to a mere fraction” of the “homes’

values,” the government has taken “a vested property

right in what is ordinarily called the equity in one’s

home—meaning the property’s value beyond any liens

or other encumbrances upon it.” Hall, 51 F.4th at 189.

7

That “equitable interest” has been recognized by

“English and American courts for centuries” under the

term “‘equitable title.’” Id. at 187. Specifically, the Anglo-American “rules governing equitable interests in

real property arose primarily in the context of what

we now call mortgages.” Id. at 190. The original practice was severe: a mortgagor who failed to make full

payment by the “law day” had no recourse; the land

was, in Lord Coke’s words, “taken from him forever,

and so dead to him.” Id. at 191 (quoting 1 Coke, Institutes of the Laws of England, 205a (1628)). Hence the

term “‘mort gage’”—literally, “a ‘dead pledge.’” Id. at

190.

Before long, however, this practice was deemed “intolerably harsh.” Id. at 191. And so courts of equity

recognized that “[t]he mortgagor ‘had an equitable estate in the land’”—an “Equity of Redemption.” Id.

(quoting 6 Holdsworth, A History of English Law 663

(1924), and Dutchess of Hamilton v. Countess of Dirlton and Lord Cranborne, 21 Eng. Rep. 539 (1654)). As

those courts explained, a mortgage was “in substance

‘but a Security,’” which was considered personal property. Id. (quoting Emanuel College v. Evans, 21 Eng.

Rep. 494, 494-95 (1625)). The “mortgagee’s right” was

therefore reconceived “as a right to money rather than

land.” Id. (quoting Sugarman & Warrington, Land

Law, Citizenship, and the Invention of “Englishness”,

in Early Modern Conceptions of Property 111, 120

(1995)). The mortgagor’s interest, by contrast, was, as

Lord Hale put it, “a title in equity.” Id. (quoting

Pawlett v. Attorney General, 145 Eng. Rep. 550, 551

(1678)). “And this equitable estate” possessed by the

mortgagor “could be devised or conveyed like any

other interest.” Id. at 192 (citing Casborne v. Scarfe,

8

26 Eng. Rep. 377, 379 (1737)); see Lloyd, Mortgagesthe Genesis of the Lien Theory, 32 Yale L.J. 233, 236

(1923) (noting that chancery “treats the equity of redemption not as a mere right but as an estate which

the mortgagor may deal with in any way consistent

with the rights of the mortgagee in his security.”).

Thus, as early as 1843, this Court could say that under “the long-settled rules of law and equity in all of

the states” that drew upon “the common law,” a defaulting mortgagor still held “equitable title” to the

property, even if the creditor had “legal title” to it.

Bronson v. Kinzie, 42 U.S. 311, 318 (1843).

The upshot of this history is that one’s equitable estate—i.e., “equitable title” or what is now just called

“equity”—has long been considered a protected property interest in its own right. Hall, 51 F.4th at 187; see

Rafaeli, LLC v. Oakland County, 952 N.W.2d 434, 478

& n.50 (Mich. 2020) (Viviano, J., concurring) (collecting sources). Thus, when the government takes that

property interest, the homeowner can invoke the Taking Clause’s protection. See United States v. Gen. Motors Corp., 323 U.S. 373, 378 (1945) (Takings Clause

covers “every sort of interest”). Courts have therefore

recognized that the taking of a homeowner’s equity in

a tax foreclosure is a taking requiring just compensation. See, e.g., Hall, 51 F.4th at 194 (“By taking absolute title to the plaintiffs’ property, the County took

their equitable titles;” and did so “without paying for

them” in violation of “‘the Takings Clause’”); Grady v.

Wood County, 786 F. Supp. 3d 984, 992 (S.D. W. Va.

2025) (“[T]raditional property principles establish a

protected interest in Plaintiffs’ equity in excess of

their tax debt.”); Cont’l Res. v. Fair, 10 N.W.3d 510,

520 (Neb. 2024) (similar).

9

The measure of just compensation here remains the

same as it is elsewhere—the fair market value of the

equity in the home at the time of the taking. Yet in

this case, the County foreclosed on—and later sold—

Mr. Pung’s property due to a $2,241.93 unpaid tax bill,

representing 1.15% of the home’s fair market value.

Pet. App. 7a. That action extinguished his equitable

interest in the home, thereby constituting a taking.

Tyler, 598 U.S. at 639. In seeking just compensation,

Mr. Pung presented undisputed evidence that the

home was worth at least $194,400. Pet. App. 29a. But

rather than compensating him with his now-extinguished equity interest (about $192,000), the County

only provided Mr. Pung with about $74,000 (the surplus proceeds from the $76,008 tax-foreclosure sale).

Id. at 7a, 10a. In other words, the County gave Mr.

Pung around only 38.5% of his home equity’s fair market value. In no world can that be described as the

“full and perfect equivalent for the property taken.”

Monongahela Navigation Co., 148 U.S. at 326.

II. THE TAKINGS CLAUSE DOES NOT ALLOW AN EXCEPTION FOR TAX FORECLOSURES.

In an attempt to defend that constitutional violation, the County has (1) recharacterized the relevant

property interest as “surplus proceeds,” (2) treated the

foreclosure-sale price as dispositive of the property’s

value, and (3) urged the adoption of a tax-foreclosure

exception to the ordinary measure of “just compensation” for supposed policy reasons. All these maneuvers

fail.

10

A. Surplus proceeds are not the property

interest taken in a tax foreclosure.

Invoking the Michigan Supreme Court’s decision in

Rafaeli, the County has claimed that “the property”

taken in a “tax-foreclosure” case is “‘the surplus proceeds, not plaintiff’s real properties.’” BIO 7 (quoting

952 N.W.2d at 465). That theory suffers from three independent flaws.

1. To start, it replaces a traditional property interest recognized for centuries (equity) with a new one

spun from whole cloth (surplus proceeds). While “numerous courts, parties, and commentators” have understood the relevant property right as “the homeowner’s equity,” “none”—apart from the Michigan Supreme Court in Rafaeli—have directly identified “surplus proceeds” as “a freestanding property interest independent of the underlying equity interest.” Rafaeli,

952 N.W.2d at 482 (Viviano, J., concurring).

For good reason—no such freestanding interest exists. A homeowner’s “right to the surplus … does not

arise in manner akin to quantum mechanics, materializing suddenly without any apparent connection to

anything that existed before.” Hall, 51 F.4th at 195.

Rather, the surplus proceeds are just a possible “embodiment of the value of the equitable title” seized “before the sale.” Id. In other words, the surplus proceeds

can sometimes capture the amount of the homeowner’s equity (when the property sells for fair market value), and therefore can serve as a proxy for the

property interest taken in a tax foreclosure. But that

happenstance does not transform the underlying

property interest into something else.

11

2. Traditional property principles aside, treating

the surplus proceeds as the taken property interest

makes no sense for purposes of the constitutional inquiry. That is because “‘the act of taking’ is the ‘event

which gives rise to the claim for compensation.’” Knick

v. Twp. of Scott, 588 U.S. 180, 190 (2019). Accordingly,

a property owner’s “right to full compensation” under

the Takings Clause “arises at the time of the taking,

regardless of post-taking remedies that may be available.” Id.

Here, the critical “event was the County’s taking of

‘absolute title’” to Mr. Pung’s home. Hall, 51 F.4th at

196. “Before that event,” he “held equitable title; after

it, [he] held no title at all.” Id. The County’s subsequent sale of the home and return of the surplus proceeds to Mr. Pung goes only to remedy; it does not define the property interest he lost.

The County’s approach, by contrast, replaces “the

act of taking” (divestiture of Mr. Pung’s equitable title)

with post-taking activity (the distribution of sale proceeds) as “the event” that “gives rise to the claim for

compensation.” Knick, 588 U.S. at 190. But that misstates the constitutional inquiry. Id. And this “sales

proceeds” interest never existed independent of the

taking—rather, it is contingent on the foreclosure sale

and thus cannot manifest until after the taking. Otherwise, a State could divest an owner of property, hold

onto that property for years before selling it, and then

assert that the relevant interest arose from the yearslater sale rather than the earlier taking. In fact, if “no

constitutional issues occur until the surplus proceeds

are retained,” it is unclear what would stop the government from simply keeping the premises itself. Rafaeli, 952 N.W.2d at 486 (Viviano, J., concurring).

12

This Court’s decision in Horne provides a helpful

analogy. There, farmers challenged a raisin-requisition scheme in which the federal government would

commandeer some of a farmer’s crop, sell the raisins,

and then give the farmer any net proceeds from the

sale (after deductions for administrative expenses).

576 U.S. at 355-56. This Court recognized that scheme

for the constitutional violation that it was, rejecting

the argument that because the farmers “are entitled

to these net proceeds, they retain the most important

property interest in the reserve raisins, so there is no

taking in the first place.” Id. at 363. As the Court explained, the fact that the farmers had a “contingent

interest” in the proceeds did “not mean there ha[d]

been no physical taking” of the raisins to begin with.

Id. Rather, “once there is a taking, … any payment

from the Government in connection with that action

goes, at most, to the question of just compensation.”

Id. at 364. And on that subject, the “just compensation”

owed to the farmers was “the fair market value of the

raisins” themselves. Id. at 370. While this case involves home equity rather than raisins, the constitutional analysis remains the same.

3. The County’s emphasis on (BIO 6-7) the Michigan Supreme Court’s view of the relevant property interest also misses the point. To be sure, that court’s

“opinion in Rafaeli … arguably said” that a homeowner “has a property right only to any surplus proceeds … after a foreclosure sale”—“albeit in dictum.”

Hall, 51 F.4th at 189 (citing Rafaeli, 952 N.W.2d at

454). But the federal constitutional question here cannot be “answered solely by reference to Michigan law.”

Id.

13

Rather, while state property law is “one important

source” for determining the property rights protected

by the Takings Clause, courts must “also look to ‘traditional property law principles,’ plus historical practice and this Court’s precedent.” Tyler, 598 U.S. at 638.

Otherwise, “the Takings Clause would be a dead letter,” Hall, 51 F.4th at 190, as a State could “‘sidestep’”

that constitutional guarantee simply “‘by disavowing

traditional property interests’ in assets it wishes to

appropriate,” Tyler, 598 U.S. at 638. And here, homeowners’ “entitlement to the equity in their homes”

ranks among the “traditional property interests” that

neither Michigan nor any other state can discard. Hall,

51 F.4th at 190; see supra Pt. I.B. The Michigan Supreme Court’s refusal to recognize the relevant property interest taken—equity—therefore does not make

it so.

B. Foreclosure-sale prices are not dispositive evidence of the value of home equity.

The County has also contended that even if surplus

proceeds are not the relevant property interest, they

are still the best measure of “‘the value of the landowner’s equitable interest.’” BIO 6. In this, the County

echoes the Sixth Circuit’s flawed reasoning below,

which deemed a home’s “foreclosure sale price” as “the

best evidence” of the property’s “value.” Pet. App. 11a

(quoting Freed v. Thomas, 81 F.4th 655, 659 (6th Cir.

2023)); see BIO 6 (describing “the price obtained at

public sale of the foreclosed property” as “‘the truest

test of the value’”). While this is a more sophisticated

form of the surplus-proceeds-as-property theory, it is

equally flawed.

14

As any real estate professional could attest, a

home’s sale price is not always the “best evidence” of

its fair market value. If it were, many an appraiser

would be out of work. Granted, a home’s sale price—

at least in the typical voluntary transaction—may often reflect its fair market value. Indeed, this Court has

defined “fair market value” as “‘what a willing buyer

would pay in cash to a willing seller’ at the time of the

taking,” and that is no less true when homes are involved. United States v. 564.54 Acres of Land, 441 U.S.

506, 511 (1979). But that description does not apply to

foreclosure sales, which by definition do not involve “a

willing seller.” The sale here illustrates the point: After a speculator snapped up Mr. Pung’s home for a little north of $76,000, it then resold the property for

$195,000. Pet. Br. 8. That latter transaction between

a willing buyer and willing seller reflected the home’s

fair market value of around $195,000. The former one

did not.

The Sixth Circuit’s only support for its puzzling assumption that a forced-sale price was the touchstone

of fair market value was this Court’s decision in BFP

v. Resolution Trust Corp., 511 U.S. 531 (1994). Pet.

App. 11a; accord Freed, 81 F.4th at 659. But BFP said

the opposite. As Justice Scalia put it for the Court,

“fair market value … is the very antithesis of forcedsale value.” 511 U.S. at 537. That is because “‘fair

market value’ presumes market conditions that, by

definition, simply do not obtain in the context of a

forced sale”—namely, a “‘willing’” seller. Id. at 538; see

also Gelfert v. Nat’l City Bank of N.Y., 313 U.S. 221,

233 (1941) (“[T]he price which property commands at

a forced sale may be hardly even a rough measure of

its value.”).

15

To be sure, BFP went on to say that “the foreclosure-sale price”—as opposed to “fair market value”—

was “the only legitimate evidence of the property’s

value” under a provision in the Bankruptcy Code. 511

U.S. at 549. But that law—which went “out of its way

to avoid th[e] standard term” “‘fair market value’” and

instead used the “novel phrase ‘reasonably equivalent

value’”—did not guarantee just compensation for

seized property. Id. at 537. Put differently, what may

be a “reasonably equivalent value” for purposes of

bankruptcy is not “full and perfect equivalent for the

property taken.” Monongahela Navigation Co., 148

U.S. at 326. In fact, BFP cautioned that its analysis,

which addressed “only mortgage foreclosures of real

estate,” may not bear on “other foreclosures and forced

sales (to satisfy tax liens, for example).” 511 U.S. at

537 n.3. The portion of BFP treating the mortgageforeclosure sale price as dispositive therefore has

nothing to say on the question presented here.

That is especially so given that the “inquiry” in BFP

concerned the property’s value “at the time of sale.”

Id. at 539. The Takings Clause, by contrast, is concerned about its worth “‘at the time of the taking’”—

which, here, occurred well before Mr. Pung’s home

was put on the auction block. Horne, 576 U.S. at 36869. BFP’s discussion of any “price-affecting characteristics” of a “forced sale” therefore has no bearing on

the analysis. 511 U.S. at 539.

None of this is to deny that the surplus proceeds

from a foreclosure sale can be used as evidence of the

fair market value of home equity taken by the government. In fact, in many cases, it may be the only evidence of fair market available, which helps explain

the tradition of awarding homeowners the surplus

16

proceeds from a foreclosure sale. See Tyler, 598 U.S.

at 639-42; Hall, 51 F.4th at 193-94; see, e.g., Rafaeli,

952 N.W.2d at 487 (Viviano, J., concurring)

(“[A]lthough plaintiffs nominally distinguish equity

and surplus, they have offered no argument suggesting that the tax foreclosures here failed to obtain a fair

price for their properties.”). But where, as here, it is

uncontested that a home’s fair market value dwarfs

the surplus proceeds by almost three times, the latter

sum cannot be dispositive under the Takings Clause.

Pet. App. 29a.

C. This Court should not manufacture a taxforeclosure exception for policy reasons.

Ultimately, the County’s position reduces to a request for an exception to the usual measurement of

just compensation for “the specific context of tax foreclosure,” lest that tool “become nonviable as a means

of tax collection.” BIO 5-8. This Court should decline

the invitation.

1. To start, this Court is not in the business of crafting the sort of “generally applicable exception to the

usual compensation rule” the County angles for here.

Horne, 576 U.S. at 369 (rejecting invitation to reduce

compensation by value of “regulatory benefits”). Instead, to the extent this Court has recognized any exceptions in this area, it has typically been when “peculiar circumstances may make it impossible to determine a ‘market value.’” United States v. Toronto,

Hamilton & Buffalo Navigation Co., 338 U.S. 396, 402

(1949) (particular vessel). But that plainly cannot be

said about the value of a home, given the longstanding

existence of the appraisal industry. See Uniform

Standards of Professional Appraisal Practice (2024).

17

Indeed, anyone with an internet connection can easily obtain an estimate of a home’s value from a quick

perusal of various websites such as Realtor.com, Redfin, or Zillow. The usual rule therefore obtains:

“Where … there is a market price prevailing at the

time and place of the taking, that price is just compensation.” United States v. New River Collieries Co., 262

U.S. 341, 344 (1923).

2. With no ascertainability problems as a hook, the

County has grounded its proffered exception in policy

concerns. Specifically, it warns that any possibility of

a homeowner obtaining compensation above the “surplus proceeds” would render tax foreclosures a “nonviable” “money-losing proposition.” BIO 8. But the

County has offered no authority for this freewheeling

approach to the meaning of “just compensation,” and

in any event, its fears of adverse consequences from

adhering to the usual rule are overblown.

For starters, the County’s fears are unlikely to arise

in the majority of tax foreclosures. “[T]he empirical

studies on mortgage foreclosure have shown that public sales of property at auction usually generate sale

prices that do not exceed the amount of debt secured

by the mortgage,” and there is “no reason to believe

that a tax foreclosure process that employs a public

sale of the property would have a different result.”

Bartell, Tax Foreclosures As Fraudulent Transfers—

Are Auctions Really Necessary?, 93 Am. Bankr. L.J.

681, 707 (2019); see id. at 704 n.134 (citing one study

“finding that in 92% of sales to the mortgagee, the sale

price was for less than the amount of the debt”). This

case is unusual because the County seized a home

worth over $194,000 to satisfy a $2,242 debt—a mere

1.15% of the property’s value.

18

And even in the smaller universe of cases like Mr.

Pung’s, the homeowner will still bear the “burden of

establishing the value” of the equity taken. United

States ex rel. TVA v. Powelson, 319 U.S. 266, 273

(1943). A homeowner would therefore have to provide

evidence that the fair market value of the equity at

the time of the taking exceeded the surplus proceeds,

which the government could rebut through evidence

of its own. See Fed. R. Civ. P. 56; Fed. R. Evid. 301;

see, e.g., Toronto, Hamilton & Buffalo Navigation Co.,

338 U.S. at 398-402. This case is unusual because the

County did “not challenge[]” Mr. Pung’s calculation of

the home’s fair market value. Pet. App. 29a.

Governments also have many tools to ensure that

tax foreclosures do not result in fire sales. For example, they could use private real estate brokers to get

the best sale price, as Wisconsin has permitted. Wis.

Stat. § 75.35(2)(d); see Bartell, supra, at 706 (“private

sales are far superior to public auctions as a way to

maximize the sale price”). Or they could follow Ohio’s

lead and set the minimum bid at the appraised market value of the property. Ohio Rev. Code § 5721.19.

Governments could also simply refrain from rushing to auction to recover tax debts. As this Court noted

long ago, an officer selling a debtor’s property can

“postpone the sale” if “the time selected, or other attending circumstances, will be likely to produce great

sacrifice” in value. Blossom v. Milwaukee & C.R.R.

Co., 70 U.S. 196, 209 (1865). At the same time, governments have other ways to recoup the costs of these

procedures, such as by imposing penalties and fees for

handling property before sale. See, e.g., Mich. Comp.

Laws § 211.78m(8)(b); Fla. Stat. § 197.502(6)(a).

19

Finally, the County’s concerns are nothing new. The

county in Tyler warned that applying the Takings

Clause to tax foreclosures would lead to homeowners

demanding “more than the government will be able to

recover from the property,” as the “forced” nature of

“tax sales” means they “typically do not garner fair

market value.” Resp. Br. at 42, Tyler, 598 U.S. 631

(No. 22-166). The only way around this, that county

warned, would be to create “a special rule” for “this

circumstance only,” which is why it urged the Court to

simply hold that “the Takings Clause does not fit” the

tax-foreclosure context. Id. at 43. This Court nevertheless ruled for the taxpayer, and it gave no indication that a unique measure of just compensation

would apply in this area going forward.

3. In any event, the County’s rule comes with risks

of its own—namely, “depriving taxpayers of ‘just compensation.’” Rafaeli, 952 N.W.2d at 486 (Viviano, J.,

concurring). In Michigan, for instance, government

actors “have numerous opportunities to purchase the

property for” only “the debt (and costs),” thereby ensuring that “no surplus” is available. Id. at 485. They

also have every “incentiv[e]” to do so, or “take other

steps to limit or eliminate surpluses,” such as running

“a sale that earns” nothing beyond “the delinquent tax

sum.” Id. at 486. To “rule out the possibility that ‘just

compensation’ might require something greater than

the surplus” only invites such abuse. Id. at 487.

That is no small matter. Home equity is often the

biggest investment in people’s lives. Nationwide, the

typical homeowner has gained about $143,000 in equity over the past five years and nearly $238,000 over

the past decade. In Michigan, the figures are around

$124,000 and $202,000, respectively.

20

That is the sort of long-term wealth accumulation

that supports retirement, education, small-business

formation, and basic financial security. Yet the

County’s rule would encourage governments to seize

such investments—even when they are “worth vastly

more than the debts … owed” (in this case, nearly 90

times as much)—and leave homeowners with a pittance in exchange. Hall, 51 F.4th at 196. Whether or

not “that sort of behavior” can be “‘called theft,’” it at

least confirms that the County’s invocation of “the equities” is severely misplaced. Id.

CONCLUSION

The Court should reverse the judgment below.

SAMUEL V. LIOI

JONES DAY

901 Lakeside Avenue

Cleveland, OH 44114

BRINTON LUCAS

Counsel of Record

JONES DAY

51 Louisiana Ave., NW

Washington, DC 20001

(202) 879-3939

blucas@jonesday.com

Counsel for Amici Curiae

December 8, 2025