Two years ago in Tyler v. Hennepin County, the Supreme Court held that the Takings Clause of the Fifth Amendment requires the government to return any excess property value when a home is seized to pay off tax debts. But Michigan has attempted to circumvent its obligations under the Fifth Amendment by creating a return process so arcane and burdensome that it is nearly impossible to recover the full value of seized equity. Homeowners must submit a notarized form (not provided by the state) before their property is sold, wait six months, draft a “motion,” wait several more months for a hearing, and then petition a court to return up to 95% of their home equity. It is impossible to recover 100% of the proceeds, and interest payments on the seized property are retained by the state. Any mistake in drafting the pre-sale form, motion, or petition leads to immediate forfeiture of the entire homestead.

Unsurprisingly, most citizens fail to make it through this gauntlet and are left with nothing. Nonetheless, the Michigan state courts have upheld this process, finding that it gives property owners the minimum due process required under the Constitution.

Cato has joined a broad coalition to file an amicus brief urging the Supreme Court to grant review and ultimately strike down Michigan’s home equity takings scheme. Michigan’s current process for homeowners to recoup their equity is fundamentally inadequate to satisfy the strict requirements of the Takings Clause, which are triggered the moment that the government seizes property without compensation. If the Supreme Court does not intervene, other states across the nation will face a strong financial incentive to similarly pad their budgets with takings achieved via arcane procedures.

In our brief, we explain why it is wrong for Michigan to pin its hopes on Nelson v. New York (1956). The state contends that Nelson bars takings claims so long as any process for recovering seized equity exists, no matter how illusory. But Michigan overreads Nelson. Unlike owners under the 1956 New York statute, Michigan homeowners have no right to immediately obtain surplus equity from a sale simply by filing a written notice. Instead, Michigan requires homeowners to file uncertain claims before and after foreclosure and to wait more than a year for only partial payment. Additionally, because homeowners must initiate the foreclosure claims process themselves—unlike ordinary condemnation cases—they are on the hook for thousands of dollars in attorney’s fees spent litigating over their own homes.

Dozens of homeowners in Michigan have already lost their homes to tax debts worth a fraction of the homestead’s value. States across the political spectrum—from Alabama to Illinois—have introduced similar bills to protect home equity theft and neuter the Supreme Court’s decision in Tyler. The Supreme Court should act now by granting the petition for a writ of certiorari in Beeman and ending Michigan’s unconstitutional forfeitures.