Supreme Court to Hear Michigan Property Rights Case

The U.S. Supreme Court has agreed to hear Michael Pung v. Isabella County, Michigan, a property rights dispute that could set a national precedent on how local governments handle tax foreclosures. At the heart of the case: whether a county can seize and sell a home for unpaid taxes, keep proceeds below fair market value, and avoid compensating the original owner for the difference.

The case raises constitutional questions under both the Fifth Amendment (unlawful taking of property) and the Eighth Amendment (protection against excessive fines).

Background of the Dispute

The property in question, a ranch-style home in Union Township, west of Mount Pleasant, became tangled in decades of tax disputes after the death of its owner, Timothy Pung, in 2004.

• 2004–2012: Exemptions on the property’s local taxes were revoked and reinstated multiple times.

• 2012: Failure to re-file a principal residence affidavit led to an unpaid tax bill of $2,241.93.

• 2013: Isabella County foreclosed and auctioned the home for $76,008, keeping all proceeds.

Michael Pung, representing the estate, argued the property was worth $194,400 — Isabella County’s own valuation at the time — and that the county’s reliance on the artificially low auction price violated constitutional protections.

Legal Arguments

For the Estate (Pung):

• The county owed the estate $192,158.07 (property value minus taxes), not just $73,766.07 (auction price surplus).

• Using auction value instead of fair market value constitutes either:

  • An unlawful taking of property (Fifth Amendment).

  • An excessive fine (Eighth Amendment).

For Isabella County:

• Former owners are only entitled to surplus proceeds from actual sale, not speculative pre-foreclosure values.

• Guaranteeing fair market value would make tax foreclosure “nonviable” as a method of tax collection.

• Their legal brief invoked principles dating back to the Magna Carta to defend the system.

Why It Matters

This Michigan property rights case could redefine foreclosure law nationwide. If the Supreme Court rules in favor of Pung, counties across the U.S. may be required to compensate homeowners based on fair market value rather than distressed auction results. Such a ruling would limit governments’ ability to profit from foreclosures and strengthen protections for property owners.

If Isabella County prevails, however, tax foreclosure auctions will continue to hinge solely on sale proceeds — even if those proceeds come nowhere near the property’s assessed value.

What’s Next

The Supreme Court has accepted the case but has not yet set a hearing date. Both sides, along with outside interest groups, will file briefs in the coming months. Legal experts predict the ruling could reshape the balance between taxpayer obligations and constitutional property protections for decades to come.

DailyClout.IO will continue to cover this story.