Property Rights

Michigan Supreme Court Rebukes County That Seized Home Over $8.41 Tax Debt

Uri Rafaeli was one of hundreds of Michigan homeowners to be victimized by the state's overly aggressive property tax forfeiture law.

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When a Michigan retiree accidentally underpaid his county property tax bill by $8.41, he lost his house and all of the equity in it. Oakland County seized the property and sold it, ultimately pocketing about $25,000 beyond the tax debt owed.

Uri Rafaeli, the homeowner, is just one of many people to be victimized by Michigan's overly aggressive tax asset forfeiture laws in recent years. But the absurdity of his case earned national media attention, and on Friday the Michigan Supreme Court issued a near-unanimous rebuke to Oakland County and the legal regime that allows governments in Michigan to profit off unpaid tax bills in this way.

While Oakland County was allowed to seize Rafaeli's property to satisfy the tax debt and "any interest, penalties, and fees" associate with it, Justice Brian Zahra wrote in the opinion that accompanied the 6–1 decision, the county is not entitled to the full value of the home. "Defendants were required to return the surplus proceeds to plaintiffs, and defendants' failure to do so constituted a government taking under the Michigan Constitution entitling plaintiffs to just compensation," Zahra wrote.

Exactly how much compensation Rafaeli is due will be hashed out in a lower court. Still, Friday's decision is a "momentous" victory for homeowners in Michigan, according to the Pacific Legal Foundation, the nonprofit law firm that represented Rafaeli.

"This decision will protect people across Michigan by prohibiting county governments from stealing from struggling property owners," said Christina Martin, the attorney with PLF who argued the case. "Today's decision sends a message across the country that this kind of abuse should not be tolerated in the United States any longer."

As Reason reported last year, Rafaeli was just one victim of a 1999 state law that gave county treasurers the power to seize properties with unpaid taxes, settle the debt, and keep the remainder for their own budgets. Some of them have used this law quite effectively. Wayne County, for example, has funneled more than $382 million in delinquent tax surpluses into its general fund since 2012. Oakland County, where Rafaeli's house was located, has hundreds of millions of dollars in its Delinquent Tax Revolving Fund.

Tax asset forfeiture has been particularly pernicious in Detroit. Rather than helping to more quickly get vacant homes back on the market, it has contributed to an increase in the number of abandoned and blighted properties, according to a report by the Quicken Loans Community Fund. "Most Detroit homes that have been tax foreclosed do not return to productive use," the group concluded.

The process has created a perverse incentive for local governments to seize homes rather than allow homeowners to pay off tax debts. When Cass County was going through the process of seizing a multi-million-dollar home over a small, unpaid tax bill, the county treasurer and other officials exchanged emails joking about using the lakefront property for cookouts.

When Oakland County had to defend its forfeiture of Rafaeli's property to the state Supreme Court last year, county attorneys argued that keeping the proceeds from tax forfeitures was a punitive measure necessary to compel property tax payments from residents. During oral arguments, one county attorney compared the process to telling his kids, "If you don't pick up your stuff, it's mine."

Lower courts accepted this grotesquely paternalist argument, but the state Supreme Court soundly rejected it. Because the homes seized for unpaid property tax bills have not been connected to criminal activity, there is no grounds for the county to claim that the action is a forfeiture, Zahra wrote. Simply failing to pay your taxes, Zahra notes, is not a criminal act allowing forfeiture.

"The remedy for a government taking is just compensation for the value of the property taken," wrote Zahra. "Therefore, plaintiffs are entitled to the value of those surplus proceeds as just compensation."

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  1. Lower courts accepted this grotesquely paternalist argument, but the state Supreme Court soundly rejected it.

    Do lower court judges feel a sting from something like this? Is there any professional incentive to not fuck up so completely?

    1. County level employees feel no remorse. They are at best incompetent and at worst vile dick wolves.

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    2. Federal judges are appointed for life, and have to die or resign or be impeached. I suppose a murder conviction might speed some procedures.

      A lot of state judges have to stand for re-election. But like all other elections, there are way too many things to pack into one vote every few years, so probably only continued egregious behavior, or anything weird just before the election, would matter.

      This is the kind of crap that ought to be punished by tar and feathers. I sometimes fantasize about an amendment which expressly makes the old-fashioned variety immune from punishment (the tar was liquid at room temperature; not road tar which has to be heated).

      1. We should just go an eye for an eye in these circumstances.

        All the State officials involved in stealing this man’s home get to have their house seized by him. He’s free to do the seizing whenever he’d like, and with as many armed goons as he can convince to help him.

        1. My libertopia does have something like that. Private courts, private police, and all parties can issue any warrants they want, with two provisos:
          1. A warrant must be clear, concise, relevant. If you are searching for a stolen TV, you don’t get to search dresser drawers.
          2. If you violate your own warrant, say by searching those dresser drawers, or if you lose the case itself, then your warrants rebound on you — your targets get to repeat them back on you, with as little warning as you gave them, any time in the next year. You are of course free to buy them off or negotiate any deal, but they are in the driver’s seat.

          In other words, warrants become bets. If you think a search will prove someone stole your TV, go for it — and if you screw up the search, or if you never do prove the guy stole your TV, then right back at ya.

          1. I like it.

            Plus there’s all kinds of opportunities for volunteer armed goonery, which sounds fun.

            1. I used to worry there would be unchecked armed goonery, but I think that less and less. When you know you will be held accountable even for good searches on behalf of a losing case, you will go out of your way to be polite. Of course, if the warrant target is a known thug with a long record, you will bring back up, and you’d be smart to record everything in all cases. But if the warrant target is just another human you’ve never met, you will be polite as heck. Suppose someone sideswiped your car and you got a partial plate which leads to two candidates, both of whose cars are in locked garages, and you don’t want to give the hit and run driver a chance to clean it up. You’re still going to be polite, you’re not going to barge in like SWAT, you’re not going to handcuff everyone while you break down doors and shoot dogs — because you know one of these two did not do it, you know they will want some payback if you are a jerk, and they may want something even if you are polite, just because neighbors saw them come over, and they did take your time.

              I’ve tried to imagine how I would feel. Suppose these rules were in place now, even with all the anti-drug laws and stuff, and cops come around because they thought their helicopter saw pot plants in your back yard. You know they are tomato plants. The whole thing could be over in 5 minutes tops. But it’s still going to rankle, you’re still going to want some payment just to teach them how to distinguish tomato and pot plants. $100 would probably do it, even $20 might do it, because the alternative is you go to their house a few weeks later, spend a couple of minutes in their backyard, and most people would probably rather have a little surprise spending money.

              But if they came barging in, breaking doors, shooting your dog, handcuffing you and your friends and family, tearing up your backyard and making a mess of your house looking everywhere you could have hidden the pot plants … man, that’s a lot of anger built up, a lot of resentment, and while a million or even hundred thousand dollars would probably bribe most people, some will want to return the favor. You wouldn’t get to shoot their dog, but maybe you just take it instead. Mistreating the cops’ families and friends is probably out of bounds, but you can certainly break up a bbq or birthday party or Christmas party, send them all out to find a motel while you spend several hours digging up their back yard, dumping dresser drawers on the floor, poking through their undies and porn stash. And that just might be worth a lot more than paying for repairs and cleanup, with a few thousand on top.

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            2. But yes, it would be fun to be your own police when you know you are right — you’ve got video of the crime and can see your stolen property in his back yard. Hire a real cop, sure, but go along, hand over the warrant yourself, point out your property. I think criminals would also act differently when their victim is part of the search and arrest party. Makes the crime more real, not just some paid smurf who doesn’t give a shit. Hell, criminals might even try to negotiate a deal on the spot, property back, even give back other stolen property. Maybe. I’d negotiate — all property returned to all his victims, plus spend a few days in stocks. I’d much rather that than an expensive trial and expensive jail.

              1. There has been a private enforcement like that.

                They may still exist. You do not want to mess with them.

        2. I live in Oakland County. I’m down.

      2. I favor eliminating the democrats who did this (and yes, it’s a Michigan, so it’s democrat).

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    4. No. Judges get absolute immunity in their decisions. I do understand what a mess it would be if people could sue every judge who ruled against them, but it seems like in some cases maybe the higher court should fine lower judges for wasting everyone’s time or something.

      Problem is, they are all lawyers, and lawyers view the law and common sense as both results of court precedent. That’s where bs line qualified immunity congress from. So even if they had that power, they’d almost never exercise it.

    5. Do lower court judges feel a sting from something like this? I

      Not at all, and that’s why I advocate tarring and feathering a dozen or so of them a year.

      -jcr

  2. “The remedy for a government taking is just compensation for the value of the property taken,” wrote Zahra.

    Speaking of stings, please let those counties feel it good and hard when they have to cough up money to the plaintiffs. It’s a shame the individual state agents don’t face any punishment.

    1. I just hope they don’t get to deduct legal fees from what they owe him.

      Return everything you got minus the $8.41. You don’t get to claim legal fees if the guy had to go to court because you fucking robbed him at gunpoint.

      1. I hope they give him the fair value of the property, not what they sold it for, because I’m quite certain it was worth a lot more than $25K. I wouldn’t be surprised if officials were pocketing cash from underbidding resale as well.

        1. Don’t be so sure. A lot of Michigan is a blighted democrat shithole.

    2. Unfortunately, 99% of the time, it is not the county officials who feel the sting of payment. It’s the taxpayers.

  3. The decision was not really 6-1. The last justice concurred with, but did not join the main opinion. There were no dissents.

  4. Christ what assholes

  5. What an awful way to treat Bar Rafaeli!

    Wait, it was just some normal dude? Never mind! /sarc /sarc /sarc

  6. OK, I understand the mania for gun control now.

    1. The closer a government is to a state where citizens having both reasons and the means to resist government overreach could be a threat, the more gun control legislation you’ll see.

  7. Uri Rafaeli, the homeowner, is just one of many people to be victimized by Michigan’s overly aggressive tax asset forfeiture laws in recent years.

    Perhaps it’s time we start calling to defund something.

  8. Michigan is lucky that some county officials didn’t get shot dead over this.

    1. When you target law-abiding gun owners with this kind of state oppression, there’s a disappointing amount of peaceful restraint shown by said gun owners.

      1. Which is why the left’s portrait of gun owners as wannabe commandos is so off base.

        There have been a lot of cases recently where deadly force would’ve been justified, if gun owners were half as bloodthirsty as we’re portrayed there’d be a lot more bodies than there are.

        1. If they were like the cheap charlatan trash as how they are depicted in Netflix shows, compete with southern accents and USA caps. Don’t trust anyone under 35. They are all sluts!

    2. So lucky it makes one wonder if them do not profile their prey beforehand.

  9. and sold it, ultimately pocketing about $25,000 beyond the tax debt owed.

    the county is not entitled to the full value of the home. “Defendants were required to return the surplus proceeds to plaintiffs, and defendants’ failure to do so constituted a government taking under the Michigan Constitution entitling plaintiffs to just compensation,” Zahra wrote.

    That’s not even ‘just compensation’. They auctioned the home off for massively under market value. Giving the guy the extra $25k would be pissing on him after you just anally raped him.

  10. “The remedy for a government taking is just compensation for the value of the property taken,” wrote Zahra. “Therefore, plaintiffs are entitled to the value of those surplus proceeds as just compensation.”

    The real remedy would be a lien on the home by the government, preventing sale without also including payment of the outstanding tax debt (similar to what California does for private car sales – you can register that car you bought until all the arrears have been paid so you need to do a check for that before buying) at least until the tax debt equals the market value of the home – at *that* point it might be appropriate to seize it for auction.

    But a ‘hey, you owe us ten dollars so we’re taking your 150k home and here, here’s the 25k extra we got at the auction’ is not a ‘remedy’. Its a major miscarriage of justice.

  11. Oakland County, Michigan. Democrats. Feh.

  12. The Detroit area is not the ghost town that most people imagine but Wayne and Oakland counties have a lot of dirt poor residents. Having driven out the wealthy taxpayers they have no choice except to prey on these people. Gotta fund their pensions somehow. 24k won’t pay a city hall janitor’s pension for six months. Good on the court this time but overall the theft will continue unabated.

    1. So you’re fucking blaming the employees and their retirement? GTFOOH

    2. It’s called trickle down whoring.

  13. Talk of Grand Larceny, Larceny On a Grand Scale, Theft Under Color of Law, take your pick, as it seems that any or all of the above descriptions would fit all to well.

    1. Deprivation of rights. You have a right to not be deprived of property without due process, and the court just ruled that there was no due process because it was never a forfeiture.

  14. What kind of idiots let this progress to this stage over $8.41?

    1. Officials that wanted to continue stealing homes over a few dollars.

      1. And the property owner was too stupid to pay the additional $8.41 he owed? Surely he received a notice of the lien?

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  16. Land of the free my ass! You think you own shit? Don’t pay your EIGHT DOLLAR tax bill and see what you own!

  17. 6-1?!? Who was the one buttfucker that voted to uphold this bullshit?!?

    1. He didn’t. He concurred, but for better reasons. It’s the six who took the sleazy way out.

  18. Unjust enrichment.

  19. I presume all the public officials involved, county, state and judicial, enjoy absolute immunity.

    1. Naturally. It’s nobody’s fault, you see, because each step of the process just did what they were told with maybe a little mistake. Sigh.

  20. 6–1 decision

    Oh, who’s the MOTHERFUCKING SHYSTER ASSHOLE who voted with the looters on this?

    -jcr

    1. No one disagreed, one justice just disagreed with which aspect of it takings clause applied.

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  22. What?
    Common sense in Michigan?
    What next?
    Not re-electing Comrade Whitmer?
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    The horror!

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  28. Who’s the ass who voted nay? My guess is it’s a female nanny slut whore.

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  31. Until Mr. Rafaelli gets the chance to beat the living shit out of the apparatchiki who stole his house with the bludgeon of his choice, justice has not been served in this case.

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  33. “Because the homes seized for unpaid property tax bills have not been connected to criminal activity, there is no grounds for the county to claim that the action is a forfeiture, Zahra wrote. Simply failing to pay your taxes, Zahra notes, is not a criminal act allowing forfeiture.” Threading the needle to render this decision without affecting the government criminality of asset forfeiture….had to find a fly in the soup, but I found it.

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