A federal judge ruled that Cook County’s system for handling unpaid property taxes violates the Constitution, delivering a major victory for homeowners who lost their properties and accumulated equity through tax sales.
Judge Matthew Kennelly found that the process infringes on the Fifth Amendment’s protection against unfair “takings” and the Eighth Amendment’s prohibition on excessive fines, according to reports from the Chicago Tribune and the Chicago Sun Times. The ruling stems from the class action lawsuit Bell v. Pappas, filed in 2022, which challenges how the county manages delinquent taxes.
“Cook County arguably had every piece of information needed to know that its failure to compensate property owners created a high risk of constitutional violations,” Kennelly said in his decision, noting the system was an “obvious” violation.
Under current law, property tax debt can be sold after 13 months of nonpayment. If the debt is not repaid within 30 months, tax buyers can claim ownership of the property and keep any profits beyond the debt owed. For example, a homeowner with $10,000 in tax debt on a $100,000 property could lose the entire home, forfeiting $90,000 in equity, while the tax buyer gains a windfall.
The lead plaintiff, Michael Bell, inherited a $115,000 home in 2017, but lost it after failing to pay $11,000 in taxes. Bell sought compensation for the lost equity rather than reclaiming the property. Other plaintiffs included another homeowner and community groups such as the Southwest Organizing Project and Palenque LSNA, which Kennelly ruled had standing. Since filing, the lawsuit has grown into a class action with roughly 2,500 homeowners, with estimated claims averaging $60,000 each.
The ruling does not determine how plaintiffs should be compensated or whether Cook County and Treasurer Maria Pappas are liable. Pappas and County Board President Toni Preckwinkle declined to comment due to ongoing litigation.
Illinois remains the only state not to reform its tax sale system following the U.S. Supreme Court’s decision in Tyler v. Hennepin County, which struck down a similar system in Minnesota.
Plaintiffs’ attorney John Bouman emphasized that legislative reform is inevitable, noting that the Illinois General Assembly must act to align state law with constitutional standards. Pappas’ office has advocated for changes, including auction mechanisms to ensure homeowners receive surplus value, but it hasn’t emerged as a priority for state lawmakers.
– Joel Russell