ILLINOIS COURT ENTERS JUDGMENT FOR TAXPAYERS FINDING COOK COUNTY ‘S TAX SALES VIOLATED THE FIFTH AND EIGHTH AMENDMENTS OF THE U.S. CONSTITUTION

Earlier this month Illinois’ Northern District Court granted summary judgment in favor  of two taxpayers and two non-profits, the former of which sought damages against Cook  County’s treasurer, Maria Pappas (“Pappas”), and the latter declaratory and injunctive relief  against Pappas based on allegations that the county’s tax sales process violated the Takings  Clause of the Fifth Amendment and the Eighth Amendment’s prohibition against excessive  fines. Kidd v. Pappas, No. 22 C 7061, 2025 U.S. Dist. LEXIS 252918, at 50, 55 (N.D. Ill. Dec.  8, 2025). 

Both taxpayers, Michelle Kidd (“Kidd”) and Goyce Rates (“Rates”), lost their homes as a result of Cook County’s annual tax sale. i Kidd owed $2,340 in back taxes and her house  was valued at $166,220; Rates owed $9,025 and her house was valued at $389,060. ii Notably, Kidd and Rates successfully petitioned for class certification. iii The other two  defendants, Southwest Organizing Project (“SWOP”) and Palenque LSNA (“PLSNA”), are  both non-profits which engage with Cook County homeowners in various ways to improve  access to housing and help homeowners stay in their homes. iv  

Kidd, Rates, SWOP, and PLSNA (collectively, “Plaintiffs”) sued Pappas alleging Cook  County’s tax sales process constituted a government taking in violation of the Fifth  Amendment because the tax sales deprived the property owners of significant equity in their  homes without just compensation. v Similarly, the plaintiffs argued the tax sales amounted  to an excessive fine in violation of the Eighth Amendment because the amount of the “fine”  imposed through the tax sale was excessive and disproportionate to the violation. 

More than half of the Court’s opinion addressed procedural issues, including subject  matter jurisdiction and sovereign immunity, which are outside the scope of this article. vi Briefly, the Court concluded that the taxpayers had standing because the loss of their homes  was an “actual injury” that was “fairly traceable” to the tax sale. vii The Court also concluded  the non-profits had standing because their “core business activity” was to help property  owners maintain their homes and Cook County’s tax sales directly affected these entities by  requiring them to devote extra resources to counsel home owners about the tax sales. viii 

Procedurally, the Court also addressed Pappas’ sovereign immunity defense which  Pappas argued protected her from liability because she was “acting as an arm of the state”  by “implementing [a] state-mandated tax sale policy.” ix The Court rejected this argument  because Pappas had the authority to implement additional procedures in the tax sale  process which would ensure a property owner was justly compensated while still complying  with the state-mandated policy. x The Court explained the tax sale procedure could have  required the tax buyer pay the property owner the “value of the property in excess of the tax debt” or the county itself could pay “prompt and fair just compensation” ostensibly out of a  fund created for that purpose. 

Substantively, the Court addressed each of the elements required for a government  taking and concluded that the Plaintiffs had established all three elements, namely, that (1)  a government entity “take” the property, (2) for a public use and (3) without just  compensation. xi The Court rejected the County’s rebuttal argument that it was the tax buyer,  not the “state,” who actually took title to the property explaining that “the fact that a tax buyer  might also have violated the Takings Clause does not immunize the defendants' facilitation of the transfer of property without just compensation.” xii 

The Court also rejected the County’s argument that there can be no taking since the homeowner could be justly compensated for lost equity through Cook County’s Indemnity  Fund. xiii The Court explained the fund was severely underfunded and six-to-seven years in  arrears on paying claims so it was a “far cry” from other funds that were successfully relied  upon to defend a taking claim. xiv Further, the Court explained that the process for obtaining  lost equity through Cook County’s Indemnity Fund was also inadequate because it was  contingent on the petitioner demonstrating they were “equitably entitled” to compensation,  an analysis which the Court found was improperly based on “factors…entirely unrelated to  the value of the property.” xv 

Finally, the Court found the forfeiture of the homeowners’ property constituted an  excessive fine in violation of the Eighth Amendment because the fine was punitive and  disproportionate to the offense. xvi In reaching that conclusion the Court noted the non criminal nature of the offense, the fact most other jurisdictions returned any excess value  from a tax sale to the taxpayer, and the fact that the forfeiture of all the home’s surplus equity was grossly disproportionate to the amount of unpaid taxes. xvii The Court explained:  

The amount of equity lost due to Cook County's tax sales ‘bears no articulable correlation to any injury suffered by the Government.’ Homeowners who never bother to pay property taxes may suffer little equity loss if the home lacks value, while homeowners who dutifully pay taxes may lose immense equity if they fall on hard times. The underlying non-criminal offense of failing to pay property taxes does not justify such arbitrarily severe penalties. xviii 

The Court granted summary judgment in favor of the Plaintiffs and denied the Department’s motion for summary judgment. The Court noted the parties failed to brief how  damages should be calculated so it remanded for further proceedings. xix This holding is  consistent with similar findings in multiple U.S. jurisdictions and is a welcome safeguard of  our constitutional rights.

i Kidd, at *7-8. 

ii Kidd, at *8. 

iii Kidd, at *10. 

iv Kidd, at *8-9. 

v Kidd, at 3, 6-7. Future references are to this citation until indicated otherwise. vi Kidd, at 12-47. 

vii Kidd, at *13. 

viii Kidd, at *17. 

ix Kidd, at *23. 

x Kidd, at 34-35. Future references are to this citation until indicated otherwise. xi Kidd, at 48. 

xii Kidd, at *50 (quoting Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 432 n.9,  102 S. Ct. 3164, 73 L. Ed. 2d 868 (1982)). 

xiii Kidd, at *52-3, 62-3. 

xiv Kidd, at *6, 52 (citing Nelson v. City of New York, 352 U.S. 103, 77 S. Ct. 195, 1 L. Ed. 2d  171 (1956)). 

xv Kidd, at 53. Future references to this case are to this citation until indicated otherwise. xvi Kidd, at 61-2. 

xvii Kidd, at *59-61.

xviii Kidd, at 62 (internal citations omitted).

xix Kidd, at 65.

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