Supreme Court Rules Against Michigan Family in Tax Foreclosure Dispute
WHO:
Fox News - The Pung family, Isabella County, Pacific Legal Foundation, Justice Samuel Alito, Justice Clarence Thomas, Justice Neil Gorsuch, Michael Pung, Larry Salzman.
WHAT:
The Detroit News - The Supreme Court ruled that the Pung family is only owed the surplus proceeds of the tax sale, which is the difference between the tax debt and the sale price, not the property's fair market value.
The Detroit News - The court concluded that the Pung family's argument for fair market value compensation was unsupported by "neither history nor precedent."
The Detroit News - Justice Samuel Alito stated that the Pung family's theory would impose "unprecedented burdens" on jurisdictions and could make tax sales impractical.
The Detroit News - The justices rejected the Pung family's claim that the forfeiture of their home equity constituted an excessive fine under the Eighth Amendment.
Fox News - The Supreme Court's ruling emphasized that under the Fifth Amendment, "the proper baseline under the Takings Clause is the price obtained in a tax sale, at least when the sale is fairly conducted."
Fox News - Justice Samuel Alito stated, "neither the Fifth nor the Eighth Amendment requires the government to compensate former owners based on the hypothetical fair market value of their property."
Fox News - The court noted that creating a fair-market-value baseline would impose "unprecedented burdens" on local governments seeking to collect unpaid taxes.
Fox News - The court vacated and remanded the case, sending it back to the U.S. Court of Appeals for the Sixth Circuit to reconsider procedural claims made by the Pung family.
Fox News - The U.S. Supreme Court unanimously ruled 9-0 against the Pung family's claim regarding tax foreclosure.
Fox News - The Pung family argued that Isabella County wrongfully foreclosed on their home over a disputed tax bill of $2,241.93.
Fox News - The court stated that the proper baseline for compensation under the Takings Clause is the price obtained in a tax sale.
Fox News - The Pung family claimed they lost over $118,000 in equity when their home, valued at $194,400, was sold for $76,008 at auction.
ABC News - The Supreme Court rejected efforts to allow original owners to retain more money from tax foreclosure sales.
WHERE:
Fox News - Isabella County, Michigan.
WHEN:
Fox News - The case was argued at the U.S. Supreme Court on February 25.
WHY:
The Detroit News - Justice Clarence Thomas expressed that the actions of Isabella County were "likely unconstitutional" and that citizens have a higher right to their homes than the state's tax-collection interests.
Fox News - Justice Clarence Thomas, joined by Justice Neil Gorsuch, expressed that "What Isabella County did to the Pungs was wrong, and, on my initial view, likely unconstitutional."
Fox News - The Pung family claimed "home equity theft" and sought just compensation based on the home's actual worth.
Fox News - Isabella County argued that the Pung family failed to maintain the home’s tax exemption and did not appeal the tax assessment.
HOW:
The Detroit News - The court vacated the decision of the U.S. Court of Appeals for the Sixth Circuit and remanded the case for further proceedings regarding the fairness of the seizure and sale process.
Fox News - The Supreme Court's ruling emphasized that creating a fair-market-value baseline would impose unprecedented burdens on local governments.
Fox News - The county contended that the Fifth Amendment’s "just compensation" requirement was satisfied by returning surplus auction proceeds.
(UPDATED June 24, 2026 06:23 UTC)
The Supreme Court has ruled that the Pung family is entitled only to the surplus proceeds from their tax sale, which is the difference between their tax debt and the sale price, rather than the property's fair market value. Justice Samuel Alito noted that the family's argument for fair market value compensation lacked support in history or precedent, while Justice Clarence Thomas highlighted concerns about the constitutionality of Isabella County's actions, asserting that citizens have a greater right to their homes than the state's tax interests. The court has vacated the decision of the U.S. Court of Appeals for the Sixth Circuit and remanded the case for further proceedings to assess the fairness of the seizure and sale process.
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(UPDATED June 23, 2026 21:32 UTC)
The Supreme Court has ruled that under the Fifth Amendment, the price obtained in a tax sale should be the baseline for compensation, as long as the sale is conducted fairly. Justice Samuel Alito clarified that neither the Fifth nor the Eighth Amendment requires the government to compensate former property owners based on hypothetical fair market values, noting that establishing such a baseline could create significant burdens for local governments collecting unpaid taxes. The court has vacated and remanded the case back to the U.S. Court of Appeals for the Sixth Circuit, where procedural claims made by the Pung family will be reconsidered, with Justice Clarence Thomas stating that the actions taken against them were likely unconstitutional.
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(UPDATED June 23, 2026 17:41 UTC)
The U.S. Supreme Court has unanimously ruled 9-0 against the Pung family's claim regarding a tax foreclosure on their home in Isabella County, Michigan. The family argued that they lost over $118,000 in equity when their home was sold for $76,008 at auction due to a disputed tax bill of $2,241.93, but the court stated that the proper baseline for compensation under the Takings Clause is the price obtained in a tax sale, rejecting efforts to allow original owners to retain more money from such sales. The ruling emphasized that establishing a fair-market-value baseline would create unprecedented burdens on local governments, with the county asserting that the Fifth Amendment’s "just compensation" requirement was met by returning surplus auction proceeds.