Pung v. Isabella County, Michigan
Issues
When the government takes and sells a delinquent taxpayer’s property that is worth more than what the taxpayer owes, does the delinquent taxpayer get reimbursed according to the fair market value of the property, or according to what the government actually sold it for?
This case asks how delinquent taxpayers should be compensated when their forcefully forfeited property is worth more than their underlying tax debt, and that forfeited property is auctioned off in a foreclosure proceeding. Petitioner Pung argues that he is entitled to compensation according to the true market value of the property because not doing so would be a taking without just compensation. Respondent Isabella County argues that the actual sale price is the correct benchmark, and any loss sustained by the delinquent taxpayer is within the bounds of the Fifth Amendment. Pung further argues that the government returning the difference between the unpaid tax and the actual sale price, rather than the fair market value of the property, to delinquent taxpayers is an excessive fine in violation of the Eighth Amendment. Isabella County counters that this case does not involve a fine, so Eighth Amendment protections against excessive fines do not apply. This case touches on important questions regarding economic consequences of tax delinquency and the impact of foreclosures on communities.
Questions as Framed for the Court by the Parties
1. Whether, after foreclosing on and selling a property to collect delinquent taxes, the government provides just compensation under the Fifth Amendment’s Takings Clause when it pays the former property owner the difference between the property’s auction sale price and the tax debt, even though it is significantly less than the fair market value of the property.
2. Whether a government violates the Eighth Amendment’s Excessive Fines Clause when it forecloses on real property worth more than needed to satisfy a tax debt and pays the former property owner only the difference between the property’s auction sale price and the tax debt.
Michigan’s General Property Tax Act (“GPTA”) empowers local governments to levy property taxes, as well as allow exemptions to those taxes. MICH. COMP.
Additional Resources
- Elyse Apel, U.S. Supreme Court takes up Michigan foreclosure case, The Center Square (Dec. 5, 2025).
- Katherine Dailey, U.S. Supreme Court to decide if Michigan family is owed by county for house seized over tax bill, Michigan Advance (Jan. 7, 2026).
- Lauren Gibbons, After government sold their home, Michiganders take fight to Supreme Court, Bridge Michigan (Dec. 15, 2025).