Does the Fifth Amendment Takings Clause require the government to compensate a taxpayer based on the fair market value of their property rather than the auction sale price following a tax foreclosure? Does the failure to provide compensation based on fair market value constitute an excessive fine under the Eighth Amendment? Specifically, is the constitutional baseline for "just compensation" the actual tax-sale price or a hypothetical open-market transaction price?

Petitioner sought compensation based on the property's fair market value rather than the depressed auction price. He argued that the Takings Clause of the Fifth Amendment requires this higher baseline to ensure "just compensation." He further contended that the forfeiture of property worth significantly more than the tax debt constitutes an excessive fine under the Eighth Amendment.

Respondent sought to maintain the lower court's ruling that only surplus proceeds from the auction are owed. They argued that the historical practice of tax sales supports using the auction price as the baseline for compensation. They further asserted that the Eighth Amendment does not apply because the tax-foreclosure regime is not punitive.

The Court held that the auction price is the proper baseline for "just compensation" under the Fifth Amendment, provided the sale is fairly conducted. This conclusion relies on hundreds of years of English and American law allowing the seizure and sale of property to collect taxes, provided the government returns the "overplus." The Court cited early federal statutes, including the Act of May 4, 1812, the Act of Jan. 9, 1815, the Act of July 13, 1866, and Rev. Stat. §3195. Precedents such as *United States v. Taylor*, *United States v. Lawton*, *Nelson v. City of New York*, and *BFP v. Resolution Trust Corporation* were invoked to establish that owners are entitled only to surplus proceeds. The Court rejected the application of eminent-domain standards from cases like *Penn-East Pipeline Co. v. New Jersey* and *Knick v. Township of Scott*, noting that tax sales are a distinct context. It reasoned that fair market value is inappropriate here because owners can generally avoid tax sales by paying the debt or refinancing. The Court noted that requiring fair market value would impose "unprecedented burdens" and render tax sales "infeasible as a debt-collection mechanism." Regarding the Eighth Amendment, the Court applied the test from *Austin v. United States*, which states property forfeiture is a "fine" only if it serves "in part to punish." The Court found no historical evidence that a fairly conducted tax sale violates the Excessive Fines Clause. Consequently, the Court concluded that neither the