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Eaton County treasurer: U.S. Supreme Court rules tax‑sale proceeds measured by auction price, not fair‑market value
Summary
Eaton County Treasurer Daryus Rainet briefed commissioners on the U.S. Supreme Court's decision in Pong v. Isabella County, which held that the proper baseline for takings claims tied to tax sales is the auction price rather than fair‑market value; the case was remanded for procedural review of how individual sales were conducted.
Eaton County Treasurer Daryus Rainet told the board during limited public comment that a recent U.S. Supreme Court decision, Pong v. Isabella County, favors using the price obtained at a tax sale rather than fair‑market value when calculating takings‑clause claims tied to tax‑sale proceeds.
"We conclude the proper baseline under the takings clause is price obtained in a tax sale rather than using fair market value," Rainet said, summarizing the Court's holding. He cautioned that the Court remanded the case to the Sixth Circuit to address whether particular tax sales had been properly conducted, which could lead to follow‑on litigation over specific auctions.
Rainet said county legal counsel and the Michigan Association of Counties were examining the decision and preparing communications; he called the ruling "mostly good news" but noted the remand leaves open challenges for individual sales if plaintiffs assert defective procedures.
What this means: Eaton County's historic practice of distributing proceeds based on auction price less back taxes, fees and expenses aligns with the Supreme Court’s holding; counties should continue to ensure sales follow procedural requirements to reduce litigation risk.
