The Sixth Circuit today dismissed Wayside Church v. Van Buren County, a case challenging Michigan’s unconstitutional tax foreclosure scheme. Judge Kethledge who dissented from the panel’s decision, summed up the case this way:
In this case the defendant Van Buren County took property worth $206,000 to satisfy a $16,750 debt, and then refused to refund any of the difference. In some legal precincts that sort of behavior is called theft. But under the Michigan General Property Tax Act, apparently, that behavior is called tax collection.
You read that right. When Wayside Church fell behind on its taxes on a piece of land it used for youth camp, Van Buren County took the property and sold it for $206,000 to satisfy $16,750 in tax debt, interest, penalties, and fees. The County kept all of the profit—$189,250.
When the church couldn’t get its equity back from the government, it filed a Fifth Amendment Takings Claim, along with two other individuals who similarly lost their property over relatively small tax debts. The Fifth Amendment prohibits government from taking private property without paying just compensation. As PLF explained in an amicus brief filed last year in support of the church and other property owners, government can take property for taxes, costs, and penalties due, but it violates the Constitution when it takes and keeps more than that. Indeed, most states recognize that dispossessed property owners should be compensated the surplus proceeds from the sale of tax-foreclosed property.
Unfortunately, today the Sixth Circuit did not even decide whether the Fifth Amendment’s Takings Clause protects property owners. Instead, it dismissed the case, holding that it was not ripe under Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City. The court held that Michigan courts offer “reasonable, certain, and adequate” remedy for Wayside Church’s constitutional claim. The court is wrong. As the dissenting opinion explains, Michigan law is unclear about whether state courts allow a takings challenge to the state tax law. And so far, Michigan courts have dismissed cases just like this one, claiming that the Constitution does not protect people from this kind of confiscation.
As the Liberty Blog has noted many times before, Williamson County hurts Americans’ ability to enforce their federally protected Constitutional rights. Usually when the local government violates constitutionally protected rights, citizens can seek protection from federal courts. But Williamson County creates a unique obstacle for Fifth Amendment takings claims. Justice Thomas recently urged the Supreme Court to fix the “quagmire” created by Williamson County. For the sake of churches and landowners in Michigan, let’s hope the rest of the Justices take that advice soon.