JUDGE TEARS INTO COUNTY FOR
POCKETING CHURCH'S $190,000 'In some legal
precincts that sort of behavior is called theft', by Bob Unruh, 3/3/17, WND
A federal appeals court judge has
criticized a
Michigan county for taking about $190,000 that
belonged to a small church congregation.
“In some legal precincts that sort
of behavior is called theft,” wrote Judge Raymond Kethledge in his dissent of a
2-1 decision Feb. 10 in favor of Van Buren County by a three-court panel
of the U.S. Court of Appeals for the Sixth Circuit.
Kethledge, the
ABA Journal recently reported, is
believed to be on President Trump’s list of potential candidates for future
openings on the U.S. Supreme Court. The report said Trump and Kethledge
have one thing in common – “blunt opinions.”
The case that prompted Kethledge’s
criticism centers on Van Buren County’s confiscation of real estate in
response to Wayside Church’s failure to pay 2011 property taxes of
about $16,000.
In the 2-1 decision, Sixth
Circuit Judge Eric L. Clay, joined by Judge Bernice B. Donald, determined the
district court lacked jurisdiction, and the plaintiffs must pursue their claims
in Michigan state court.
Kethledge contended federal
jurisdiction was proper because the claims pertained to the U.S. Constitution
and Michigan courts haven’t yet determined whether a local government can be
sued for taking excess tax auction proceeds.
The county, under state law,
confiscated the church’s property and sold it for $206,000. The county kept the
$16,000 owed in property taxes. Then it kept the rest of the sale proceeds,
about $190,000, as profit.
The Michigan property was used as a
camp for inner-city children by the church, a historically black congregation
on the South Side of Chicago.
The church is one of a number
of plaintiffs that brought a complaint to federal court over the
issue, but the case was thrown out at the trial court level on procedural
grounds. The plaintiffs now are
requesting a hearing of the full 6th U.S. Circuit Court of Appeals, with
the help of the Pacific
Legal Foundation.
Kethledge wrote in his dissent: “In
this case the defendant Van Buren County took property worth $206,000 to
satisfy a $16,750 debt, and then refused to refund the difference. In some
legal precincts that sort of behavior is called theft.
“But under the Michigan General
Property Tax Act, apparently, that behavior is called tax collection. The
question here is – or at least in my view should be – whether the county’s
action is a taking under the federal Constitution.”
County officials denied to WND there
was any profit, saying instead it was only money in excess of the amount
of taxes owed.
Kethledge said the solution offered
by the two other judges, that the church procedurally must seek a solution in
state court first, isn’t correct.
“The Michigan courts have not yet
determined, as a matter of state law, whether a local government’s
appropriation of property pursuant to the taxing power generally, or to the
General Property Tax Act in particular, is a taking to the extent the
government takes property worth more than the amount of taxes owed,” he said.
He said legal precedent “sends these
plaintiffs to state court, while state law directs them back to federal.”
“At this point one senses we have
lost our constitutional bearings,” he charged. “The plaintiffs have asked us to
adjudicate a claim arising under the federal Constitution, which is the most
important type of claim that we can adjudicate. The claim itself is
substantial: that, when a state takes fee simple to property in satisfaction of
a tax obligation, the state effects a taking to the extent the property is
worth more than the taxes and penalties owed.
“Congress has granted us
jurisdiction over that claim. We have strict duty to exercise that
jurisdiction.”
PLF attorney Christina
Martin said the plaintiffs “have already been victimized enough by county
bureaucrats.”
“They should not be victims of the
judicial process as well by having the doors of the federal courts shut in
their faces,” she said. “We are asking the full Sixth Circuit to hear this
important property rights case, recognize that federal courts should be open
and welcoming to people seeking to claim their federal constitutional rights,
and issue a clear ruling that foreclosure can’t be abused to fatten public
coffers by impoverishing struggling property owners.”
The full-court hearing is being
requested because a split decision by a panel of the appeals court affirmed the
lower court’s ruling to dismiss the complaint on procedural grounds.
Pacific Legal explained there
are two other plaintiffs in the case. Myron Stahl owned a residential lot
that the county confiscated and sold for $68,750, when the tax owed was
$25,000. The county kept the profits. And Henderson Hodges owned 20 acres of
land with a house that the county confiscated and sold for $47,750 to pay
$5,900 in taxes. The county kept the profits. “All told, it took in $274,850 in
after-debt profits from the sales,” Pacific Legal said.
Van Buren Treasurer Karen
Makay told WND, “We are not
confiscating property.” She explained the county confiscates property to take
ownership, then sells a number of properties at one time. Some may sell for
more than the tax owed, some less, she explained. “We have followed the law to
the letter,” she said. She admitted sometimes “there was more from the sales
than were taxes owing.” But she said: “We are not their real estate agent. We
own the property. We can sell it for the taxes.”
She said if the property owners
wanted their equity they should have sold the property before the county intervened. “OK, if you have a property, and you
know you can’t pay the taxes, you have the ability to sell that property before
it’s foreclosed,” she said.
Pacific Legal said the
petitioners represented “reflect a cross section of people owning property in
Van Buren County, Michigan during the last recession.”
“Wayside Church (based in Chicago)
owned and operated a parcel in Van Buren County as a youth camp. Myron Stahl
owned a residential lot where he was building his retirement home. Henderson
Hodgens owned a 20-acre farm with a home.
“Wayside Church’s youth camp parcel
was sold for $206,000, more than 12 times the tax debt of $16,750. Stahl’s
property was sold for $68,750 to cover a $25,000 debt. Hodgens’s property sold
for $47,750, compared to a $5,900 debt. All told, the county garnered $274,850
in after-debt profits from the three sales.”
The legal team said the county
“pocketed the sale profits.” It described it as a case of
“egregious self-enrichment as an unconstitutional taking of the owners’ private
property, and specifically contends that the Michigan General Property Tax Act
violates the Fifth Amendment by permitting such confiscation.”
The petition for a full appeals
court panel hearing said: “Not surprisingly, the property owners in this
case objected to the county’s retention of sale proceeds that exceed tax debts
and flow from the underlying value of their homes.
Considering the appropriation of
such funds to be an unconstitutional taking of their property, petitioners
began to investigate judicial remedies. Because of the absence of a prompt,
certain and adequate state court remedy for takings arising under the act,
petitions filed a lawsuit in federal court. In so doing, they alleged in part
that the county effected an unconstitutional taking when it kept the surplus
proceeds from the sale of foreclosed private properties.”
http://www.wnd.com/2017/03/judge-tears-into-county-for-pocketing-churchs-190000/
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