Harrison v. Montgomery County (6th Cir. 2021)

Citation: 997 F.3d 643 (6th Cir. 2021) · Court: U.S. Court of Appeals for the Sixth Circuit, No. 20-4051 · Decided: May 11, 2021

A pre-tyler-v-hennepin-county Sixth Circuit decision that opened the federal courthouse door to Ohio “home-equity theft” takings claims arising from the land-bank direct-transfer route of Ohio tax foreclosure. The court held that a property owner whose tax-delinquent home was transferred to a county land bank — with no auction and no return of the surplus equity above the tax debt — could pursue a 42 U.S.C. § 1983 Takings Clause claim in federal court and was not barred by claim preclusion. It is the controlling circuit precedent that frames the ohio land-bank scheme’s exposure under Tyler.

Facts

Alana Harrison inherited a partial interest in her late mother’s home in Dayton, Ohio. The property carried a property-tax delinquency of roughly $20,000. In 2017 the Montgomery County treasurer began foreclosure, and the County Board of Revision ordered the property transferred to the county's land bank (land reutilization corporation) under Ohio's expedited abandoned-land statutes (R.C. 323.65–323.79). Because the land-bank route transfers the parcel with clear title without an appraisal and without a public sale, no auction generated proceeds. The home's estimated fair market value was about $22,600 — roughly $3,000 more than the tax debt — but Ohio’s direct-transfer statute provides no mechanism to pay that surplus equity to the former owner, so Harrison received nothing.

Holding

The Sixth Circuit reversed the district court’s dismissal. It held that Harrison’s Takings Clause challenge was not barred by claim preclusion (res judicata), because the governing federal takings law had changed during the relevant period — Knick v. Township of Scott, 588 U.S. 180 (2019), eliminated the prior requirement that a property owner first exhaust state remedies before bringing a federal takings claim. A property owner may now bring a § 1983 federal takings claim in federal court as soon as the property is taken. The case was remanded for the district court to consider the merits of whether the seizure of surplus equity through the land-bank transfer is a taking without just compensation.

Reasoning

• Knick changed the law. Under the prior Williamson County regime, a takings plaintiff had to litigate a state inverse-condemnation remedy first; Knick abolished that, so a plaintiff who lost in state foreclosure proceedings is not precluded from a fresh federal § 1983 takings suit.
• The land-bank route extinguishes equity with no recovery mechanism. When a county forecloses and sells at auction, it keeps the taxes owed and returns the rest; but the abandoned-land direct-transfer path generates no proceeds and leaves no statutory avenue for the former owner to claim surplus equity.
• The court did not itself decide that a taking occurred — it held only that the claim could proceed and remanded for the merits. (Two years later, Tyler supplied the Supreme Court’s answer that retaining surplus equity is a taking.)

Practical impact

• For Ohio context: This decision (with freed-v-thomas-2020 on the just- compensation measure and tyler-v-hennepin-county at the Supreme Court) is the core authority for surplus-equity takings claims against Ohio’s land-bank direct-transfer scheme (R.C. 323.78). It is why Ohio’s no-auction transfer route is the jurisdiction’s principal Tyler-compliance pressure point.
• For former owners / heirs: Harrison’s inherited fractional interest illustrates that heirs-property interests are squarely at risk in the abandoned-land path, and that a federal § 1983 route exists after Knick.
• For operators: A purchaser/transferee taking through a land-bank conveyance should understand the constitutional cloud over uncompensated surplus retention, and that former owners retain a federal cause of action.

Good-law status

Still good law. Decided May 11, 2021; not overruled. Its premise was strengthened, not undermined, by Tyler v. Hennepin County (2023), which held at the Supreme Court level that retaining surplus equity is an unconstitutional taking. Knick v. Township of Scott (2019), on which the procedural holding rests, remains controlling.

Why it matters

Harrison is the Sixth Circuit’s marker that Ohio’s no-sale land-bank transfer cannot be used to quietly absorb a homeowner’s equity beyond the tax debt without facing a federal takings claim — the procedural bridge that let these claims reach the merits, later vindicated by Tyler.

Related authorities

• tyler-v-hennepin-county — Supreme Court holding that surplus-equity retention is a taking.
• freed-v-thomas-2020 — 6th Circuit on the measure of just compensation (the surplus kept, not full FMV).

Applies in →

Binding in the Sixth Circuit: ohio, michigan, kentucky, tennessee. Directly implicates Ohio’s land-bank/direct-transfer foreclosure path.

Legal information, not legal advice. This page summarizes a court decision for educational purposes and does not create an attorney-client relationship. Verify against the primary opinion and consult a licensed attorney in the relevant jurisdiction before acting. Last verified 2026-06-02.