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Date: 06-06-2023
Case Style:
Case Number: 2:18-CV-14042
Judge: Terrence G. Berg
Court: United States District Court for the Eastern District of Michigan (Wayne County)
Plaintiff's Attorney:
Defendant's Attorney:
Description: Detroit, Michigan civil rights lawyer represented Plaintiff who sued Defendants on wrongful foreclosure theories.
In this putative class action, Plaintiff Marion Sinclair asserts that various government units, private entities, and public officials conspired to deprive her and other similarly-situated individuals in Southfield, Michigan of the equity value of their homes. She says that, through a series of real-estate transactions, defendants took title to tax-delinquent properties, sold them, and failed to reimburse the former owners for the difference between the value of their homes and the delinquent debts- often pocketing tens or hundreds of thousands of dollars in the process.
The procedural history of the case is long and complex. In short, Sinclair's legal theories have changed since she filed her original complaint. In a proposed second amended class-action complaint, she raised five claims against various defendants: (1) a federal takings claim against Oakland County and the City of Southfield; (2) a state-law takings claim against Oakland County and the City of Southfield; (3) a procedural due-process claim against Oakland County and the City of Southfield for failing to provide a process to secure the return of equity value after a foreclosure sale; (4) an unjust enrichment claim against Oakland County, the City of Southfield, and various other defendants for refusing to compensate property owners for the equity in their homes; and (5) a civil conspiracy claim. ECF No. 51-1.
On February 28, 2022, the Court entered an order denying Sinclair leave to file the proposed amended complaint and dismissing the case. ECF No. 64. On the basis of the Michigan Supreme Court's decision in Rafaeli, LLC v. Oakland County, 952 N.W.2d 434 (Mich. 2020), and other decisions from this district, the Court reluctantly concluded that Sinclair could not state a cognizable claim because she and the putative class members did not have a property interest in the equity of their homes.
Sinclair filed a notice of appeal. ECF No. 66. While her appeal was pending, the Sixth Circuit decided Hall v. Meisner, 51 F.4th 185 (6th Cir. 2022), which concerned the same tax foreclosure scheme in Southfield alleged in this case. In Hall, the Sixth Circuit declared-after reviewing traditional Anglo-American property law principles, historical practice, and early United States Supreme Court precedent-that homeowners did have a property right in the equity of their homes. Id. at 196. Then in December 2022, in light of its decision in Hall, the Sixth Circuit Court of Appeals issued an order affirming in part and vacating in part this Court's dismissal of Sinclair's complaint and ordering further proceedings on Sinclair's claims against some defendants. Sinclair v. Meisner, No. 22-1264, 2022 WL 18034473 (6th Cir. Dec. 29, 2022).
Only a few weeks later, the United States Supreme Court granted a petition of certiorari in Tyler v. Hennepin County, 26 F.4th 789 (8th Cir. 2022), cert. granted, 143 S.Ct. 644 (Mem) (Jan. 13, 2023), to consider whether a homeowner who had filed a complaint about a similar taxdelinquency scheme in Hennepin County, Minnesota had stated a claim under the Fifth Amendment's Takings Clause. Oakland County and its Treasurer, who are defendants both in this case and in Hall, then moved to stay this case pending the resolution of Tyler and a determination of their petition for certiorari from the Sixth Circuit's decision in Hall, No. 22-874.[1] ECF No. 75. On May 25, 2023, the Supreme Court issued a written opinion resolving Tyler, No. 22-166, ____ S.Ct. ____, 2023 WL 3632754 (May 25, 2023).
Sinclair v. Meisner (E.D. Mich. 2023)
Outcome:
For the reasons explained above, the motion for a stay is DENIED. Because the Sixth Circuit affirmed the dismissal of Sinclair's claims against some defendants, Sinclair will need to file an amended complaint consistent with the opinion of the Court of Appeals.
As this Court understands it, Sinclair may assert the following claims: (1) a federal takings claim against Oakland County; (2) a statelaw takings claim against Oakland County; (3) a procedural due-process claim against Oakland County; (4) an unjust enrichment claim against Oakland County; and (5) a civil conspiracy claim. As to this last claim, the Sixth Circuit noted that “the district court should reevaluate Sinclair's civil conspiracy claim in light of Hall.” And so the Court shall do if that claim is reasserted.
It is therefore ORDERED that, within 30 days of the entry of this order, Sinclair must file a motion for leave to file a Third Amended Complaint, with a proposed Third Amended Complaint attached, consistent with the above. Defendants' response is due in accordance with local rules and the Federal Rules of Civil Procedure.
IT IS SO ORDERED.
Plaintiff's Experts:
Defendant's Experts:
Comments: