*This summary was written by Claude. It may contain errors. Read the opinion itself for anything you intend to rely on.*

The Supreme Court ruled **9-0** that the Fifth Amendment does not entitle a former owner to their property's full "fair market value" after a tax-foreclosure sale; the proper baseline for "just compensation" is the auction sale price — "at least when the sale is fairly conducted in light of our country's history of tax sales." Justice Alito wrote the opinion of the Court. Justice Thomas joined all but one part and filed an opinion concurring in part and in the judgment (joined by Justice Gorsuch except as to a footnote); Justice Sotomayor filed a concurrence joined by Justices Gorsuch and Jackson. The Court also rejected the parallel claim that the Eighth Amendment's Excessive Fines Clause requires paying more than the surplus proceeds. The judgment was vacated and remanded.

The case is a sequel to \*Tyler v. Hennepin County\* (2023), which held that the government must return the surplus from a tax sale (the amount above the debt). Pung asked the Court to go further and require fair market value. The facts are stark: the Pung family was twice held by Michigan tribunals to owe \*no\* additional tax, yet the County foreclosed on their longtime home over a disputed $2,242 assessment, sold the $194,400 home at auction for $76,008, and the buyer resold it for $195,000 within 18 months. The Court declined to adopt a categorical fair-market-value rule, reasoning that owners can generally avoid tax sales and that such a rule could make tax collection impractical by forcing governments to pay windfalls to delinquent taxpayers.

The crucial wrinkle is what the Court left open. It expressly did \*not\* decide whether the procedure here was "fairly conducted," directing the Sixth Circuit to address on remand any preserved arguments that the sale was unfair. Both concurrences seized on that opening. Justice Sotomayor wrote to emphasize that the Court was not endorsing any particular definition of a "fair auction." Justice Thomas went much further, marshaling founding-era and 19th-century authorities to argue that historical tax-sale practice required the government to exhaust personal property first, to sell only as much land as needed to cover a small debt, to give rigorous notice, and to ensure the auction price approximated fair value — none of which, in his "initial view," the County did. He concluded that "what Isabella County did to the Pungs was wrong, and... likely unconstitutional."

The practical upshot is narrower than a flat win for either side. As a doctrinal matter, the Court refused to constitutionalize fair market value as the measure of just compensation after a tax sale, which limits \*Tyler\*'s reach. But it preserved the Pungs' case — and, by tying the auction-price rule to a "fairly conducted" sale, it signaled that egregious tax-foreclosure practices (selling an entire home for a fraction of its value to satisfy a tiny debt) remain vulnerable to challenge. The contours of a "fair" tax sale are now the live question for the lower courts, and likely for future litigation.

Supreme Court, 9-0: Court won't require governments to pay full market value after tax foreclosures, but signals taking a $194K home over a $2,242 bill may be unconstitutional