Michigan Homeowners Ask U.S. Supreme Court to Decide Whether States Can Erase the Fifth Amendment

Outside Legal Counsel PLC, led by attorney Philip L. Ellison, has filed a petition with the United States Supreme Court in Hathon v. State of Michigan, a property rights case asking whether the Fifth Amendment’s Takings Clause is self-executing — that is, whether citizens can invoke the Constitution directly when a state refuses to provide just compensation for property it has taken.

The petition arises from a class action originally filed on behalf of Michigan homeowners Lynette Hathon and Amy Jo Denkins, whose $5,200 tax debt led to the seizure and sale of their family home. The State of Michigan kept not only the tax debt but also more than $60,000 of their home equity, refusing to return a single dollar.

“Michigan has done something the Constitution never permits,” said Ellison, lead counsel for the petitioners. “It took the property, kept the profits, and then barred the courts from hearing the constitutional claim. If a state can legislate the Fifth Amendment out of existence, then no right is safe.”

Following this Court’s rulings in Rafaeli v. Oakland County and Tyler v. Hennepin County, Michigan enacted a statute, MCL 211.78t, to govern how former property owners might recover surplus proceeds from tax foreclosures. But that statute limits recovery to only 95% of the surplus, denies interest and attorney fees, and — critically — declares itself “the exclusive mechanism” for redress. The Michigan Supreme Court recently enforced that exclusivity, holding that property owners cannot sue under the Fifth Amendment directly, even when the statute fails to provide full compensation.

Ellison’s petition argues that the decision directly contradicts more than a century of precedent from the U.S. Supreme Court, including Seaboard Air Line Ry. v. United States, Jacobs v. United States, and First English Evangelical Lutheran Church v. County of Los Angeles, which all hold that the right to compensation arises directly from the Constitution itself and cannot be taken away by statute.

The petition asks the Supreme Court to decide: “Whether the Takings Clause of the Fifth Amendment is a self-executing stand-alone claim that permits property owners to sue a State directly for just compensation when the State otherwise mandates reliance on an inadequate statutory remedy.”

The case follows closely on the Court’s 2024 decision in DeVillier v. Texas, where the Justices acknowledged but left unresolved the same question because Texas law provided an alternate common-law remedy. Hathon presents the issue cleanly: Michigan has abolished all alternatives, leaving homeowners without a constitutional path to justice.

“This is the very question DeVillier left for another day,” Ellison said. “That day has come.”

The petition was filed by Philip L. Ellison of Outside Legal Counsel PLC in Hemlock, Michigan, together with E. Powell Miller of The Miller Law Firm and Matthew Gronda of Gronda PLC. Ellison is recognized for his work in property-rights and constitutional litigation and currently serves as lead counsel in the Supreme Court case Pung v. Isabella County — another Michigan takings case concerning Michigan's inferior tax foreclosure system.

Both Pung and Hathon challenge the ongoing attempt to evade its constitutional duty to provide full and fair compensation when private property is taken.