Facts of the Case

Provided by Oyez

After a Michigan township assessor revoked a principal residence exemption on property held by the estate of Timothy Scott Pung, Isabella County foreclosed over a resulting tax delinquency of $2,241.93 and sold the property at public auction for $76,008, keeping the entire proceeds rather than returning the surplus to the estate. Michael Pung, the estate's representative, sued, arguing the county's retention of value far beyond the tax debt violated the Fifth Amendment's Takings Clause and the Eighth Amendment's Excessive Fines Clause. The district court awarded Pung only the surplus proceeds above the tax debt, and the Sixth Circuit affirmed.

Questions

  1. When the government takes property for tax debt, does the Fifth Amendment require compensation based on the property's true fair market value, or only on the lower amount it sold for at a tax foreclosure auction?

  2. Does the Eighth Amendment's Excessive Fines Clause prohibit the government from seizing and keeping a property worth far more than the small tax debt owed on it?

Conclusions

  1. On June 23, 2026, the U.S. Supreme Court unanimously held in Pung v. Isabella County that when the government sells property at a fairly conducted tax foreclosure auction, the Fifth Amendment entitles the former owner only to the surplus proceeds above the tax debt, not the property's hypothetical fair market value, and the Excessive Fines Clause imposes no greater obligation.