Bloomberg, Cook County’s Tax Foreclosure Scheme Violates US Constitution:

Cook County’s tax foreclosure scheme violates the Fifth and Eighth Amendments of the US Constitution, but the liability of the county still needs to be determined with further fact-finding, an Illinois federal court said.

A class action showed Cook County’s tax foreclosure scheme deprived homeowners of their property without just compensation by taking their properties that were worth more than the tax debt they owed and keeping the excess funds, the US District Court for the Northern District of Illinois said Monday. Cook County failed to convince the court that a county fund was enough to compensate the homeowners because it was underfunded and backlogged.

Judge Matthew F. Kennelly also held the county’s tax scheme violated the Excessive Fines clause because the deprivation of property worth far more than the tax debt was a punitive and disproportional penalty.

However, the court stopped short of issuing remedies because the extent of Cook County’s liability needs to be determined with further fact-finding.

The fact-finding would reveal whether Cook County—which is home to Chicago—can be held responsible under the Monell liability principle, a doctrine that opens up local governments to liability when their policies cause the violation of constitutional rights.

The suit successfully overcame the Tax Injunction Act, which prohibits federal courts from barring state tax administration when a speedy and efficient remedy is available in state court. The class action challenged the lack of compensation after the tax collection process concluded, so a ruling by the Northern District of Illinois wouldn’t interfere with state tax administration, Kennelly held.