Pung v. Isabella County, Michigan

Overview

Pung is a case about whether taking and selling a home to collect a small tax debt, and keeping everything above what's owed, violates the Constitution's protections against uncompensated takings and excessive fines.

Facts

Isabella County, Michigan sold Marc Pung's home at public auction for $76,008 to satisfy a $2,241.93 delinquent property tax debt, retaining the surplus above the debt as county funds. The property's claimed market value was approximately $194,400. Pung challenged the practice under the Takings Clause and Excessive Fines Clause, arguing that allowing the government to keep surplus value from a tax foreclosure sale is unconstitutional.

Issue

Whether a government's retention of surplus proceeds from a tax foreclosure sale, where the sale price far exceeds the tax debt owed, constitutes an uncompensated taking under the Fifth Amendment; and whether such retention constitutes an excessive fine under the Eighth Amendment.

Rule

No private property shall be taken for public use, without just compensation.

Rule

Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.

Rule

A state's retention of surplus proceeds from a tax forfeiture sale beyond the amount of a tax debt and associated costs is an unconstitutional taking under the Fifth Amendment.

Pung's Position

Pung argues Isabella County's retention of $73,766 in surplus proceeds from his home's tax sale, far exceeding the $2,241 tax debt, is an uncompensated taking under the Fifth Amendment. Tyler v. Hennepin County (2023) held that government retention of surplus equity in tax foreclosure sales violates the Takings Clause.

Isabella County's Position

Isabella County argues the sale and retention occurred under then-existing Michigan law before Tyler was decided. The county contends the remedy question is distinct from the violation. Even if Tyler applies, the scope of required compensation and retroactive application to pre-Tyler forfeitures remain unsettled.

At the Supreme Court

Argued February 25, 2026. Tyler v. Hennepin County (2023) established the constitutional violation; Pung asks what property owners are owed and whether pre-Tyler forfeitures can be challenged. The ruling will determine remedies for potentially thousands of homeowners who lost surplus equity in tax sales before Tyler changed the law.

“Our task in this case, however, is not to decide whether tax sales as historically conducted represent good public policy. Our authority is limited to deciding whether the Takings Clause *requires* the transformation Pung advocates, and the answer to that question is clear.”

No.

Conclusion

In a unanimous decision, the Court held that the proper measure of just compensation after a government tax foreclosure sale is the auction price actually obtained, not a higher independent valuation. The ruling sets a clear standard limiting homeowners' ability to claim additional compensation beyond what the sale generated.

Notes

Argued 2026-02-25. Added via SCOTUS OT2025 intake 2026-05-13.

Sotomayor’s Blunt Response

In a one paragraph response (joined by Jackson and Gorsuch) Sotomayor says she agrees that the 5th amendment doesn’t require the government to hit some hypothetical fair market value. But as to what counts as a fair auction or any of that nonsense, she leaves that for the lower courts. End of concurrence.