Judge OK’s $109 million settlement in Minnesota property forfeiture case

A Ramsey County District Court judge gave final approval Monday to a $109 million settlement in a class-action lawsuit over tax-forfeited property that went all the way to the U.S. Supreme Court.

It’s the final step in a legal battle that stretched on for five years, and clears the way for some former homeowners whose property was seized due to delinquent taxes to claim money.

Vildan Teske, one of the lawyers representing the plaintiffs, called the final settlement approval “great news” for anyone who held an interest in property lost through tax forfeiture.

“We can now get money back to former owners and their families so they can move forward with their lives,” Teske stated. The average payment is in the tens of thousands, with some in the six figures, she said.

Attorneys filed the lawsuit in 2019 on behalf of Geraldine Tyler, a Minneapolis woman who’s now 96. Last year, the Supreme Court ruled that Hennepin County violated Tyler's constitutional rights when it sold her condo for $25,000 more than she owed in property taxes, and kept the difference.

The case was sent back to the district court to sort out how much Tyler was owed. Meanwhile, other Minnesotans who’d lost property filed a class-action lawsuit against Hennepin, Ramsey and other counties. Counties argued they were following Minnesota’s forfeiture process, so they shouldn’t be held liable.

Attorneys reached the basic terms of a statewide settlement in February. In May, state lawmakers approved $109 million to settle the claims.

In June, a district court judge gave the settlement preliminary approval. Monday’s hearing and approval was the final step. No one objected to the settlement terms.

People who think they might be eligible have until June 6 to file a claim online. The sooner they can file, the better, Teske said, so the claims administrator can start processing the claims.

The settlement covers people who lost property in any Minnesota county to forfeiture after June 2016. In Hennepin County, the time period goes back to August 2012.

The Minnesota Legislature passed a bill last session creating a new process for handling forfeited properties. 

If counties sell a property for more than the taxes and fees owed, they must notify the prior owner so they can file a claim and collect the surplus.

It also requires counties to do a better job notifying owners that their property is in forfeiture and letting them know about tax relief programs, so they can avoid losing their home in the first place.

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