Class certified for challenge to D.C. tax-lien scheme

You may recall an excellent and eye-opening series from the Washington Post in the fall of 2013 showing how a combination of relatively small tax underpayments could add up, with fees and penalties, to losing your home in the nation's capital. (Here's Brian's blog about it, with links.) A class action was filed in September 2013 to challenge the taking of individuals' home under D.C.'s tax-lien laws; the basis of the suit was the Fifth Amendment's Takings Clause. (Here's our discussion.)

Earlier this month, the federal district court here in D.C. certified the class. The court first summarized the case:

Benjamin Coleman brought this lawsuit to challenge a District of Columbia law that directed the sale of a lien on his home after he failed to pay a $133.88 property-tax bill. That law permitted the private purchaser of the lien to add $4,999 in interest, costs, and fees to Mr. Coleman's bill and, when Mr. Coleman could not pay, to institute a foreclosure proceeding. After the foreclosure proceeding, the private purchaser obtained title to Mr. Coleman's home. Mr. Coleman, however, received nothing, although the amount of equity he had in his home far surpassed the amount he admittedly owed in taxes, interest, costs, and related fees. Because the loss of this surplus equity was dictated by District of Columbia law, Mr. Coleman sued to challenge that law. His claim is that the taking of his excess equity–the amount of equity minus the taxes and related costs he admits that he owed–violated his constitutional rights under the Takings Clause of the Fifth Amendment to the United States Constitution. 

Among the court's key holdings in certifying a class: The court rejected D.C.'s challenge to standing and certified both a damages class and a class for declaratory relief. Although the class consists of only 34 individuals, the court held that numerosity is satisfied because of the difficulty of joining these uniquely vulnerable, economically disadvantaged individuals. And the court rejected the District's theory that the need for individual valuations of the plaintiffs' properties defeated predominance — the common questions related to District law and the property owners' rights outweighed individual valuation questions, which could be answered by looking to the District's own assessments.

The decision is Coleman v. District of Columbia, 2015 WL 1641097.

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