The Supreme Court just decided Pung v. Isabella County. The case resolves a question left open by Tyler v. Hennepin County (2023): when the government forecloses on and sells property to satisfy a tax debt, is “just compensation” under the Takings Clause measured by the tax-sale auction price or by fair market value? 

Writing for a near-unanimous Court, Justice Alito held that the proper baseline is the tax-sale price—not a hypothetical fair market value—at least where the tax sale is “fairly conducted in light of our country’s history of tax sales.” The Court grounded its holding in a long tradition under which the government must refund only the surplus proceeds above the debt, and reasoned that a fair-market-value rule would often force tax sales to run (infeasibly) at a loss.