Minnesota will settle a class action lawsuit involving property forfeiture for $109 million

This session’s Legislature is about to approve the state’s funding for the settlement.

The state of Minnesota bears the financial burden of $109 million in resolved class action lawsuits, following a 2023 U.S. Supreme Court ruling that declared the state’s property forfeiture legislation unconstitutional.


In the Tyler v. Hennepin County case last year, the U.S. Supreme Court decided 9-0 that the county had violated the woman’s constitutional rights by selling her forfeited property for more money than she owed in taxes and keeping the difference, or surplus.


Following the decision, Minnesotans who lost their properties to tax forfeiture filed two class action lawsuits against the state, claiming that the counties should have kept the surpluses.


A concern is raised by the large budget item: Why is the state footing the bill for the counties’ unlawful takings?


Minnesota’s solicitor general, Liz Kramer, stated the The counties retained a percentage of the proceeds, but they were operating under state law and the assets were taken in the state of Minnesota’s name, according to Liz Kramer, the attorney general of Minnesota.


The Legislature is prepared to pay the $109 million compensation because of its involvement in the forfeitures.


Democratic, Farmer, and Labor leaders unveiled a budget accord on Friday that outlines the additional amount of money that Congress would spend this year over the $72 billion, two-year budget from the previous year. The settlement was part of a $477 million accord made by Senate Majority Leader Erin Murphy, a DFL-St. Paul, House Speaker Melissa Hortman, a DFL-Brooklyn Park, and Governor Tim Walz. Despite accounting for approximately twenty-three percent of the spending agreement, it provided no explanation.


Walz said in a statement, “This is a responsible, thoughtful agreement that maintains a balanced budget while funding our state’s most urgent needs for emergency services, critical infrastructure, and public safety.”


Walz unveiled his own budget proposal last week; it omitted the settlement.


According to Kramer, leaders have been in “a lot of regular communication” with the Office of the Attorney General over the necessity of funding the settlement. The settlement’s fundamental conditions were reached on February 28 by the state and the attorneys representing the plaintiffs in the class action lawsuits, according to Kramer.


According to Kramer, the parties reached an agreement on a settlement that covers roughly 6,000 homes in Minnesota that have been impacted by the tax forfeiture practice for the previous seven years.


Kramer stated that in order to save the state money on interest, the $109 million should be placed into a fund as quickly as possible by the Legislature.


Many properties are in legal limbo because the Legislature hasn’t established a new forfeiture statute despite the Supreme Court’s decision to invalidate the current one. Counties will start selling the properties they have seized in the last few years and return the excess funds—roughly $26 million—to the state’s general fund once the Legislature passes a new tax forfeiture statute.


The head of the House Taxes Committee, Rep. Aisha Gomez, DFL-Minneapolis, told the Reformer that because the state was involved in the creation of the statute that was later overturned by the court, the Legislature had a duty to fulfill by authorizing funding for the settlement.


She stated, “There wasn’t much disagreement among other DFL lawmakers about the fact that we should at least help very significantly all along, and it was definitely not an election year winner or something that anyone was really excited to spend so much money on.”


The settlement, according to Kramer, is an illustration of “good government at work.”


Kramer remarked, “It feels like a miracle if this magically— I’m knocking on wood here— gets through the Legislature.” “We’re really fortunate that all these different parties and entities are willing to do that because there is a lot of money at stake and it just takes so many people to be willing to put the public interest ahead of what might be their own personal interests.” 

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