New York County Unable to Escape Tax Foreclosure Surplus Suit

May 9, 2025, 5:41 PM UTC

Sullivan County, N.Y., failed to persuade a federal district court to dismiss a lawsuit accusing the government of unconstitutionally keeping the surplus funds from a tax foreclosure sale.

The US Supreme Court’s 2023 decision in Tyler v. Hennepin County established that the former property owners have a right to the surplus funds that exceed what they owed in taxes, and that failure to deliver those funds is an unconstitutional taking, the US District Court for the Southern District of New York said Thursday.

That ruling undermines the county’s argument that the court lacked jurisdiction over the case because it’s a ...

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