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Jackson v. Southfield Neighborhood Revitalization Initiative (2025)

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Jackson v. Southfield Neighborhood Revitalization Initiative (2025)

Citation: ___ Mich ___ (2025); ___ NW3d ___; No. 166320 · Court: Supreme Court of Michigan · Decided: July 16, 2025

A post-Tyler Michigan Supreme Court decision that extends the surplus-equity takings rule to properties transferred to another governmental unit for the minimum bid (rather than sold at public auction) under former MCL 211.78m(1). The Court reconciles its own rafaeli-v-oakland-county-2020 holding with tyler-v-hennepin-county and the Sixth Circuit’s Hall v. Meisner, and confirms that a taking can occur even absent a public-auction sale. The opinion (Bernstein, J., for the entire bench except Hood, J.) rests on the Michigan Constitution but treats Tyler as parallel and reinforcing.

Facts

The plaintiffs (Louis Jackson and others) owned Oakland County properties that, after tax foreclosure, were not offered at public auction. Instead, under former MCL 211.78m(1), the foreclosing governmental unit transferred them for the statutory minimum bid to the City of Southfield’s affiliated entities — the Southfield Neighborhood Revitalization Initiative and Southfield Non-Profit Housing Corporation — with Oakland County in the chain. The properties were worth materially more than the delinquent taxes and fees, and plaintiffs received nothing for the excess value. This is the same “right of first refusal” minimum-bid transfer mechanism the Sixth Circuit addressed in Hall v. Meisner, 51 F.4th 185 (6th Cir. 2022), which involved several of the same parties.

This decision follows the Court’s companion ruling in Schafer v. Kent County (2024), which held that rafaeli-v-oakland-county-2020 and MCL 211.78t (the statutory surplus-claim procedure enacted by 2020 PA 256) apply retroactively to claims not yet final.

Holding

“Because these properties were purchased for the minimum bid in lieu of being made available to purchase through public auctions, to the extent the value of plaintiffs’ respective properties exceeded the amount plaintiffs owed in delinquent taxes and attendant fees, we conclude that there was a taking without just compensation in violation of the Michigan Constitution.”

The Court remanded to the trial court for further proceedings. Because it found a taking under the Michigan Constitution — which “provides more expansive protection against takings than its federal counterpart” — the Court declined to decide whether the facts also present a taking under the federal Takings Clause.

Reasoning

  • A taking can occur without a public sale. Under Rafaeli, the compensable event is the government’s retention of value over what is due — not the foreclosure judgment itself. Where property is transferred to a governmental unit for the minimum bid rather than auctioned, the former owner’s surplus interest is taken with no mechanism to recover it.
  • Reconciling Tyler and Rafaeli. The Court read Tyler as reaching “broadly the same conclusion” as Rafaeli on the same historical precedent: a constitutionally protected interest in surplus proceeds that must be justly compensated if taken. Both relied on Nelson v. City of New York, 352 U.S. 103 (1956).
  • On Hall v. Meisner. The Court observed that the Sixth Circuit’s Hall — which found a Fifth Amendment taking in this minimum-bid context — both aligns with Tyler on the existence of a taking and creates tension over when the taking occurs and how the surviving property interest is characterized (Hall labeled it “equitable title”). A separate writing argued only the County, not downstream transferees, should bear just-compensation liability.
  • Measure of damages. Consistent with Rafaeli, the Court reaffirmed that just compensation for a tax-foreclosure taking is the surplus (value above taxes, interest, penalties, and reasonable fees) — not the property’s full fair market value.

Practical impact

  • Closes a gap left by Rafaeli: Michigan foreclosing units cannot avoid surplus liability by routing property through a minimum-bid governmental transfer instead of a public auction. See surplus-funds and surplus-waterfall.
  • For former owners in Michigan, minimum-bid transfers to land banks or municipal entities are now actionable takings, with retroactivity governed by Schafer.
  • For investors / operators / land banks, it cautions that acquiring foreclosed property at the statutory minimum bid does not extinguish the former owner’s surplus claim where value exceeds the debt; the right-of-redemption and the MCL 211.78t claim procedure remain decisive.

Good-law status

Still good law. Decided July 16, 2025; remands for further proceedings — not overruled, distinguished, or limited as of last_verified 2026-06-02. Builds on Rafaeli and the companion Schafer v. Kent County (2024).

Applies in →

michigan. Persuasive in jurisdictions using minimum-bid governmental transfers or land-bank conveyances in lieu of public auction.

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.

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