U.S. Supreme Court Rules for Pung Family in Property-Rights Case Brought by Outside Legal Counsel PLC

For Immediate Release | June 23, 2026
https://olcplc.com/public/media?1782245629

The United States Supreme Court today ruled in partial favor of the Pung family by vacating the lower-court judgment against them and sending Pung v. Isabella County, No. 25-95, back for further proceedings.

As Justice Thomas exactly states in his issued concurrence opinion, “what Isabella County did to the Pungs was wrong, and, on my initial view, likely unconstitutional.”

The case was brought by Outside Legal Counsel PLC on behalf of the Estate of Timothy Scott Pung and argued before the Supreme Court on February 25, 2026, by Philip L. Ellison.

The decision is a significant win for the Pung family. The Supreme Court did not leave the Sixth Circuit’s judgment standing. It did not end the case. Instead, it sent the case back and confirmed that a tax-foreclosure auction price can satisfy the Constitution only if the sale was fairly conducted in light of the Nation’s historical limits on tax sales.

“The Supreme Court did not adopt our broader argument that fair market value automatically controls in every tax-sale case, but it also did not give counties a blank check,” stated Ellison. 

That key question — whether Isabella County’s process was fair — now returns to the Sixth Circuit.

“The Pung family won an important victory today,” said Ellison. “The adverse lower-court judgment against them is gone and the Supreme Court made clear that the government does not get to rely on a tax-sale price unless the sale was fairly conducted. That is the fight we now take back to the Sixth Circuit.”

What the case was about — in plain terms

This case began with a family home in Isabella County, Michigan.

The Pung family’s home was assessed for tax purposes at approximately $194,400. The dispute arose after local tax officials denied principal-residence tax treatment and claimed additional taxes were owed. The family fought that issue and prevailed before the Michigan Tax Tribunal. But foreclosure proceedings still followed over an alleged tax amount of roughly $2,241.93.

The County ultimately sold the home at public auction for $76,008. The property later resold on the open market for $195,000.

In practical terms, the Pung family lost a home worth roughly $194,400 over a claimed tax amount of about $2,242, and received far less than the home’s real-world value.

OLC brought the case to the Supreme Court because the Constitution should not allow government to take a family home through tax foreclosure and then avoid scrutiny by pointing to the distressed auction price produced by the government’s own process.

What the Supreme Court decided

The Supreme Court did not adopt a rule that fair market value automatically controls in every tax-sale case. But the Court also did not give local governments the rule Isabella County needed to end the case. Instead, the Court held that auction price may serve as the constitutional baseline only when the tax sale is fairly conducted in light of the Nation’s history and tradition of tax sales. 

That condition matters. The Supreme Court vacated the Sixth Circuit’s judgment and sent the case back. The Court left open the Pung family’s argument that Isabella County’s foreclosure process was unfair and constitutionally defective. And from the Pung family's perspective, a process that results in less than half its value is unfair.

Justice Sonia Sotomayor, joined by Justices Neil Gorsuch and Ketanji Brown Jackson, wrote separately to emphasize that the Court was not deciding the full boundaries of what makes a tax sale fair. That issue remains open.

Justice Clarence Thomas, joined in substantial part by Justice Gorsuch, wrote separately and described the facts in powerful terms. He explained that the Pung family had paid its property taxes, won its exemption dispute, and still lost a home worth approximately $194,400 over an alleged $2,242 deficiency. Justice Thomas wrote that what Isabella County did to the Pungs was “wrong” and, in his preliminary view, “likely unconstitutional.”

The Pungs' Win

The County wanted the case over. It is not over. The County wanted the Sixth Circuit’s judgment affirmed. It was vacated. The County wanted to rely on the foreclosure auction price without further constitutional scrutiny. 

The Supreme Court held that auction price matters only if the tax sale was fairly conducted. That is a win for the Pung family.

The decision gives the family a renewed opportunity to prove that Isabella County’s tax-foreclosure process violated the Constitution. It also makes clear that tax foreclosure is not a constitutional blind spot. Counties must still act fairly when the consequence is the loss of a family home.

“This decision gives the Pungs what they needed most today: another day in court on the fairness of what happened to them,” Ellison said. “The Constitution does not permit government to take a home first and ask fairness questions later. The Supreme Court has now sent those fairness questions back for further proceedings.”

Why the case matters beyond one family

Tax-foreclosure cases often involve people who are elderly, grieving, disabled, displaced, confused by government notices, or facing small debts that could have been resolved without the loss of a home.

For many families, a home is the largest asset they own. It represents years of work, savings, repairs, mortgage payments, and family stability. Losing that equity over a small tax amount can be financially devastating.

The Supreme Court’s decision matters because it preserves a constitutional check on how counties conduct tax foreclosures. The government cannot simply say “auction price” and end the inquiry if the process that produced that price was unfair.

The ruling gives property owners a path to challenge tax-foreclosure practices that depart from historic limits and basic fairness.

What happens next

The case now returns to the Sixth Circuit. OLC will continue arguing that Isabella County’s foreclosure process was not fairly conducted in light of historical tax-sale practice and constitutional limits on government power.

Historically, tax collection was not supposed to operate as a shortcut to taking an entire home when less drastic means could satisfy a small debt. OLC will press the argument that Isabella County’s process failed that constitutional test.

“This case has always been about more than an auction number,” Ellison said. “It is about whether local government must act with constitutional restraint before taking a family home. Today, the Supreme Court kept that fight alive.”

Ellison added: “The lawful goal of tax collection is to collect taxes. It is not to steal home equity or profit from distress. And it is not to force families to litigate all the way to the Supreme Court just to be heard on whether the government’s process was fair.”

A major property-rights case for OLC

For Outside Legal Counsel PLC, Pung is part of a broader mission to defend Michigan property owners and citizens against government overreach. OLC has litigated takings claims, tax-foreclosure equity cases, warrantless-inspection cases, public-records disputes, riparian-rights disputes, First Amendment matters, and other constitutional cases in Michigan’s state and federal courts, the Sixth Circuit, and the United States Supreme Court.

“This is why OLC exists,” Ellison said. “Most people do not have the power, money, or institutional force of government. But they do have constitutional rights. Our job is to make those rights real.”

About Outside Legal Counsel PLC

Outside Legal Counsel PLC is a Michigan plaintiff-side constitutional and civil-rights law firm representing property owners and citizens against government overreach

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