Sunday, March 5, 2017

Michigan Government Abuse

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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