Cook County’s longstanding system of collecting property tax debts by seizing and selling people’s homes, worth hundreds of thousands of dollars, over unpaid taxes worth a fraction of that amount, is unconstitutional, a federal judge has ruled.
On Dec. 9, U.S. District Judge Matthew F. Kennelly sided with a group of former Cook County homeowners in the long running class action seeking to end the county government’s use of its current so-called tax sale system.
In the ruling, Kennelly said he agreed the county’s system amounts to violations of property owners’ rights to just compensation under the Fifth Amendment and to protection against unjust and excessive fines under the Eighth Amendment.
“Homeowners’ failure to pay their property taxes undoubtedly causes harm to Cook County by depriving the County of funding,” Kennelly wrote in the ruling.
“Yet that harm is limited to the taxes owed and the costs of obtaining those taxes. There is little justification for imposing any fine beyond the taxes, interest, and costs due, especially when homeowners already suffer the punishment of losing their rights to their residences.”
Kennelly, however, stopped short to this point of ordering Cook County to repay the named plaintiffs or perhaps as many as 1,700 other property owners whose homes and other real estate was taken by the county through what Kennelly said is an unconstitutional tax debt collection process.
He said damages will need to be calculated later in further proceedings over the extent of the county’s liability under the law.
Kennelly’s Dec. 9 decision comes as another win for the plaintiffs and their lawyers, as they continue efforts to force counties in Illinois – and potentially the state government itself – to adapt their property tax collection processes and rules to comply with a U.S. Supreme Court ruling.
The lawsuit against Cook County was filed in 2022 in Chicago federal court.
A separate action has been lodged against a group of other county governments, including Illinois’ second and third largest counties, DuPage and Lake counties.
And yet another lawsuit is pending in federal court in southern Illinois.
The cases all center on one common accusation: That Illinois and its county governments have all but illegally ignored a recent landmark U.S. Supreme Court decision and continued to seize homes over unpaid property taxes.
In the decision at the heart of the cases, the 2023 ruling known as Hennepin v Tyler, the Supreme Court sided with a homeowner in Hennepin County, Minnesota, whose $40,000 condominium was seized and sold by the county over $2,300 in unpaid property taxes, plus $12,700 in penalties and interest. Hennepin County then kept the surplus from the sale, in a practice dubbed by critics as “home equity theft.”
In a unanimous ruling authored by Chief Justice John Roberts, the court said the county’s tax sale went too far, and the county should only be allowed to collect what is owed, with the homeowner retaining the surplus.
Some justices also said such “equity theft” also amounts to violations on the Eighth Amendment’s ban on “excessive fines.”
In Illinois, homeowners have for decades similarly lost their homes over thousands of dollars in unpaid property taxes under the state’s Property Tax Code tax sale system.
Under the tax sale process, the unpaid taxes – known as tax debt – is sold by the county, typically to a real estate investor seeking to profit by either selling the property or keeping it and renting it to others.
Illinois law gives homeowners 30 months to redeem the property by paying off the tax lien. Throughout that redemption process, however, the debt continues to grow through the addition of interest and fees. Ultimately, the investor and county can choose to seize the property, evict the residents and sell the property for full market value, potentially reaping massive profits.
Critics in Illinois have noted this process has typically victimized those least able to absorb such a financial hit, including elderly and black homeowners living in low-income communities.
While the case against DuPage, Lake and the other Illinois counties landed in court after the Tyler ruling, the Cook County lawsuit came before the landmark decision.
As of 2025, Illinois remains the only state in the country to take no action to reform its property tax collection system to come into line with the Supreme Court’s Tyler ruling.
Instead, counties have argued in court that they can’t be sued, because they were acting as required by law; and because the tax sales were conducted under court orders, meaning federal courts cannot be asked to overturn those decisions.
Or they have argued the Tyler decision isn’t applicable in Illinois, because people who lose their homes at tax sale are given ample opportunities to contest the tax debt, redeem the tax debt and then, after the homes are sold to satisfy the tax debt, to pursue their lost home equity from their county’s so-called “indemnity fund.”
And they argue they can’t be sued because it is private investor buyers, not the counties or any other Illinois governments, who keep the windfall at tax sale.
In his ruling, however, Kennelly became the latest federal judge to reject all of those arguments, as he granted summary judgment to the plaintiffs on their key constitutional claims. Summary judgment is a ruling in favor of a party in a dispute before trial, when a judge determines the evidence presented in briefings strongly favors one side.
In the ruling, Kennelly rejected Cook County’s arguments that the county was bound by state law to use the tax sale process to sell the homes to investors and force homeowners to appeal to the county’s Indemnity Fund to recover at least a portion of their lost equity.
Kennelly said he believed state law doesn’t require the county to seize all of a homeowners’ equity over a few thousand dollars in unpaid taxes.
And the judge called “absurd” the county’s arguments that they cannot be sued for the loss of equity because it was the “tax buyers” and not the county government that actually took possession of the property and the homeowners’ “surplus equity.”
“If that were the law, any government could impose whatever excessive fines it pleases – and reap the coercive benefits of those fines – simply by passing on the proceeds to a third party,” Kennelly wrote.
Ultimately, the judge said, it is Cook County that initiated the process of seizing and selling delinquent taxpayers’ property, resulting in them losing their homes and all of the equity to satisfy much smaller tax debts.
“… 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,” Kennelly wrote.
Plaintiffs have been represented by attorneys Brian D. Roche, of the firm of Reed Smith, of Chicago; Charles R. Watkins and David Guin, of Guin, Stokes & Evans, of Oak Park; and John Bouman, Lawrence Wood and Daniel Schneider, of Legal Action Chicago.
Watkins and Guin also served as co-counsel in the Tyler case before the U.S. Supreme Court and are co-counsel on the other pending “tax sale” lawsuit against DuPage County, Lake County and six other Illinois counties.
Following Kennelly’s ruling, Watkins emailed a statement to The Cook County Record in response to a request for comment, saying:
“Plaintiffs are pleased that the ruling permits them to continue on their path of vindicating the rights of injured Cook County homeowners.”
