Pung v. Isabella County: Tax Sales and Just Compensation

In the 2026 case of Pung v. Isabella County, the Supreme Court of the United States addressed whether the government must compensate a homeowner for a property's fair market value after a tax foreclosure sale. The petitioner, Michael Pung, argued that receiving only the surplus proceeds from an auction—rather than the home's much higher assessed value—violated the Fifth Amendment’s Takings Clause and the Eighth Amendment's Excessive Fines Clause. Justice Alito, writing for a nearly unanimous Court, held that the auction price serves as the constitutional baseline for "just compensation," provided the sale is conducted fairly according to historical traditions. The Court reasoned that requiring fair market value would impose unprecedented burdens on tax collection and could potentially bankrupt local jurisdictions. While the Court rejected the broad constitutional demand for market-value payouts, it remanded the case to allow lower courts to investigate whether the specific foreclosure procedures used by the county were fundamentally unfair. Justice Thomas’s concurrence highlighted the troubling facts of the case, noting that the Pungs lost a $194,400 home over a disputed $2,242 tax debt that may not have even been legally owed.