SCOTUS to Decide Landmark Case Regarding the Measure of “Just Compensation”
It’s rare for the Supreme Court of the United States to hear a case that could clarify the “just compensation” requirement under the Fifth Amendment. More than a century ago, the Court held that when “private property is taken for public use, and 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). Ten years later, the Court reiterated that when the government takes private property, “the amount recoverable” under the Fifth Amendment is “just compensation, not inadequate compensation.” Jacobs v. United States, 290 U.S. 13, 16 (1933). Fundamentally, “[i]t is the owner’s loss, not the taker’s gain, which is the measure of the value of the property taken.” United States v. Causby, 328 U.S. 256, 261 (1946).
Fast forward to 2026, no takings case has addressed the issue presented in Pung v. Isabella County: Can a local government seize and sell a home for a small tax debt and then keep the surplus equity from the sale without violating the Constitution?
Background
The Pung case concerns a suburban home in Isabella County, Michigan, purchased in 1991 by Scott Pung for $125,000. After Scott’s death, his family continued living in the home and lawfully claimed Michigan’s Principal Residence Exemption (PRE), which reduces property taxes on primary residences. However, a local assessor retroactively revoked the exemption for several years, creating a disputed tax bill of about $2,200.
Isabella County proceeded with tax foreclosure proceedings. In 2018, the County took absolute title to the property, which had an undisputed fair market value of $194,400. The home was later auctioned for just $76,008 under restrictive conditions that allegedly depressed the sale price. The County kept all proceeds, leaving the Pung family uncompensated for more than $192,000 in equity.
The Constitutional Questions
The Supreme Court will address two critical issues:
- Takings Clause (Fifth Amendment): Does “just compensation” require payment based on the property’s “fair market value,” rather than the residue of a distressed auction? Pung cites to long-standing precedent and argues that compensation should reflect the owner’s loss—not the government’s gain—placing the owner “in as good a position pecuniarily as if his property had not been taken.”
- Excessive Fines Clause (Eighth Amendment): Does forfeiting a $194,400 home to collect a disputed $2,242 tax debt constitute an excessive fine? Pung contends that the forfeiture was punitive and grossly disproportionate.
Why This Case Matters
Michigan’s former tax foreclosure system allowed counties to keep all proceeds from tax sales, creating strong financial incentives to seize property even for minor debts. In Tyler v. Hennepin County (2023), the Supreme Court held that the government may “seize and sell property, including land, to recover the amount owed,” but the Constitution ultimately prevents the government from taking more than it is owed. In Pung, Isabella County clearly took more than it was owed, leaving the former owner with no recourse under Michigan law.
Looking Ahead
Oral arguments for this case are expected later this term. Kudos to the owner’s counsel and our colleagues at Pacific Legal Foundation for their efforts and arguments up to this point! Check out SCOTUSblog for filed briefs and updates as the case progresses. The amici on this matter include Owners Counsel of America, in which MROD’s Anthony DellaPelle serves as New Jersey’s representative, and which joined the amicus brief of the Buckeye Institute.
For over 55 years, McKirdy, Riskin, Olson & DellaPelle, P.C. has concentrated its practice in this special area of the law and has earned a reputation for persistently defending its clients’ constitutionally-recognized property rights. If you are confronted with the threat of eminent domain, please feel free to contact us for a free consultation.
