Merits Brief Filed in Pung v. Isabella County Before the United States Supreme Court

Outside Legal Counsel PLC announces today that the merits brief in Pung v. Isabella County has been formally filed. The case challenges the unconstitutional retention of surplus proceeds from tax-foreclosure sales—an issue at the heart of property rights and government accountability in Michigan.

The merits brief, filed on behalf of petitioner Michael Pung, asks the United States Supreme Court to formally reaffirm a basic constitutional truth: the government may not take more than it is owed. After foreclosing on a Mount Pleasant, Michigan home over a small un-owed tax bill, Isabella County sold the property at auction and kept every dollar of profit, rather than returning the taken equity to its rightful owner. The Sixth Circuit held that Mr. Pung has a limited federal remedy. The Supreme Court has agreed to hear whether more is owed by governments.

“This case stands for a principle older than the Republic,” said Philip L. Ellison, lead counsel and attorney at the law firm of Outside Legal Counsel PLC. “Government can collect what it is owed, but it cannot convert or destroy a citizen’s equity in their home. The Constitution does not tolerate it.”

With a rapidly expanding portfolio of high-impact litigation in the U.S. Supreme Court, Sixth Circuit, and Michigan Supreme Court, attorney Philip L. Ellison has become one of Michigan’s leading voices in constitutional property-rights enforcement. Ellison serves as lead counsel not only in Pung, but also in major cases involving Fifth Amendment takings and surplus-proceeds claims and Fourth Amendment warrantless-inspection challenges. His practice also handles complex riparian and Michigan property rights cases.

Ellison’s work frequently shapes conversations about the limits of governmental power, the dignity of property ownership, and the constitutional safeguards that protect ordinary citizens in Michigan and beyond. Known for his precise analysis and moral clarity, his cases have repeatedly forced governments to answer in court for crossing constitutional lines.

In 2016, Isabella County foreclosed on Scott Pung's home, after he passed away, over a modest property-tax delinquency. His uncle, Michael Pung, is the executor of the probate estate. Isabella County sold the home for  more than the tax debt but far less than its fair market value. The home was worth $194,000 at the time but was disposed of at the tax auction for only $76,008. The buyer turned around and sold it for $195,000. 

The question before the Nation's highest court is whether citizens are entitled to a "fair market value" based remedy under the Fifth Amendment to the United States Constitution when local governments keep or destroy excess equity.

The Sixth Circuit affirmed a partial award of based on the auction price, not the fair market value price. The Supreme Court granted review in early October to resolve whether the Takings Clause of the Fifth Amendment and the Excessive Fines Clause of the Eighth Amendment protects homeowners from government confiscation of surplus proceeds following tax foreclosure. These two arguments are ones long made by attorney Ellison since he started making these challenges in 2017. 

The outcome of Pung will determine whether counties may retain windfall profits despite decades of foundational constitutional law that prohibits government from taking more than it is owed.

The Supreme Court is expected to hear oral argument in 2026, with a decision likely in early summer 2026.

Outside Legal Counsel PLC, headquartered in Hemlock, Michigan, has become a statewide leader in high-stakes constitutional litigation. The firm regularly represents landowners, homeowners, and citizens whose constitutional rights have been infringed by government action. In Pung, OLC is partnered with the Pacific Legal Foundation on merits-stage briefing before the Supreme Court.