DEPARTMENT: Property Taxation and Records
FILE TYPE: Consent Action
TITLE
title
Authorization To Participate In Proposed Class Action Settlement, Sharon Sporleder v. State Of Minnesota
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PURPOSE/ACTION REQUESTED
Authorize Dakota County to participate in the settlement and delegate authority to Interim County Manager to execute any documents required to effectuate the settlement, including any required settlement agreement in the Sporleder lawsuit.
SUMMARY
In May 2023, the United States Supreme Court determined that Minnesota's tax-forfeiture law was unconstitutional, reasoning that it allowed the State to take real property from its owner without providing just compensation. Shortly thereafter, Sharon Sporleder started a class action lawsuit to recover damages on behalf of all Minnesotans who had their real property tax forfeited but had not been paid just compensation.
A proposed settlement has been reached wherein the State would create a settlement fund and the legislature would revise the tax forfeiture law to ensure it was constitutional. Settlement was conditioned on the State agreeing to the terms.
On May 17, 2024, the State modified the tax forfeiture law and signed the settlement into law. The State created a $109 million fund from which claimants could seek compensation. All counties are allowed-but not required-- to participate in the settlement. The potential claim for compensation by prior owners from tax forfeited land sold in Dakota County is $2.23 million.
If a county participates, all claims against it for damages resulting from tax forfeitures before January 1, 2024, are released, including the claims in the Sporleder lawsuit. While counties are not required to directly contribute to the settlement fund, they are required to "reimburse" the State by remitting 75-85% of the proceeds of the sales of currently forfeited properties to the State. Dakota County has 18 tax forfeiture parcels that qualify for the reimbursement to the State. An...
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