A Michigan family’s 30-year legal battle over a seized home will go before the nation’s highest court, raising major questions about property rights and government overreach.
By yourNEWS Media Newsroom
A decades-long dispute between the Pung family and Isabella County, Michigan, is heading to the U.S. Supreme Court, in what could become a pivotal test case on how counties nationwide handle property tax foreclosures.
In their newly filed brief in Pung v. Isabella County, the family—represented by attorney Phil Ellison and the Pacific Legal Foundation—asks the Court to decide whether local governments must compensate homeowners based on fair market value when seizing property for unpaid taxes. The case argues that the government should not be allowed to confiscate properties worth far more than the amount owed, a practice critics call “home equity theft.”
According to the Pacific Legal Foundation, the case centers on whether counties can legally keep the entire value of a foreclosed property rather than just the tax debt owed (source).
“If Isabella County can with impunity confiscate the Pung’s entire home over a small disputed tax bill, and force them into a decade of litigation to recover less than half of its value, any municipality could do it to anyone,” said PLF Senior Attorney Christina Martin. “Tax sales should be a last resort.”
The dispute began in 1994, when homeowner Scott Pung received an exemption on a local property tax. Years later, after his death, the county claimed the exemption should have been reapplied for, even though Michigan law states that it remains valid as long as family members continue to occupy the home.
Despite the family’s legal victories in earlier challenges, Isabella County initiated foreclosure proceedings in 2012 over a small disputed tax bill—just days after the Michigan Court of Appeals ruled in the family’s favor for previous years. The county sold the $200,000 home for $76,000 at auction and kept the full amount.
A lower court later ruled that the county was only required to return the surplus proceeds from the auction, not the property’s total value. The Pungs argue this violated the Fifth Amendment’s Takings Clause, which requires just compensation when the government takes private property, and may also constitute an Eighth Amendment violation for imposing an excessive fine.
The Supreme Court’s review follows the Pacific Legal Foundation’s 2023 victory in Tyler v. Hennepin County, which barred counties from keeping more than what is owed in tax foreclosures. The new case asks the Court to go further—requiring compensation based on true market value when property is seized or sold below worth.
Martin said a ruling for the Pungs could have sweeping national implications. “It would make it more likely for states and local governments everywhere to be more thoughtful when seizing property for taxes and less careless when selling it,” she said.
The foundation has several other related petitions before the Supreme Court challenging Michigan counties that have kept proceeds beyond what taxpayers owed (source). “Thirty counties failed to remit a single penny,” Martin noted. “We are urging the Court to hold that this failure to remit just compensation violates the Takings Clause and that the procedures themselves violate due process.”
The Court is expected to hear oral arguments in early 2026, with a ruling that could set new constitutional boundaries on property rights and reshape foreclosure practices across the country.
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