Issues
When mailed notice of a tax sale or property forfeiture is returned undelivered, is the government required to take additional steps to locate the owner before taking the property?
The due process clause of the Fourteenth Amendment requires the government to give “reasonably calculated” notice to inform an affected party of an upcoming governmental proceeding. The issue before the Court is whether, when mailed notice of a tax sale or property forfeiture is returned undelivered, due process requires the government to take additional steps to locate the owner before taking the property. A holding that the government is required to take additional steps may subject the government to significant administrative burdens and undermine the process of transferring property rights. A holding that due process does not require the government to take additional steps may make property from tax sales more transferable, but may also deprive property owners of their constitutional right to due process.
Questions as Framed for the Court by the Parties
When mailed notice of a tax sale or property forfeiture is returned undelivered, does due process require the government to make any additional effort to locate the owner before taking the property?
Facts
In 1967 Gary Jones purchased a house in Little Rock, Arkansas. When he and his wife separated in 1993, his wife stayed in the house and he moved to a new address. Jones did not notify the tax authority of his new address. After both Joneses failed to pay taxes on the house, the Commissioner of State Lands sent a notice to Gary Jones’ last known address via certified mail. The notice stated that the property would be subject to a public sale if Jones did not pay the delinquent taxes and penalties. The notice returned to the Commissioner as “unclaimed.” Later, a newspaper announced the public sale of the Jones’s house. Jones did not respond to the publication. When Linda Flowers offered to buy the property, the State again sent notice to Jones at his last known address via certified mail. This notice also was returned unclaimed. In 2003 Flowers bought the house. See Jones v. Flowers, No. 04-449, 2004 WL 2609800 (Ark. Nov. 18, 2004).
Jones then filed a complaint, claiming that the sale violated his rights under the due process clause of the Constitution because he never received actual notice of the tax sale or of his right to redeem. The trial court upheld the sale, finding that the State complied with due process by sending notices via certified mail to Jones’s last known address. See Id.
The Arkansas Supreme Court affirmed the trial court’s holding. The court cited Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 214 (1950), which held that due process does not require actual notice, and that notice is sufficient if it is “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Based on this standard, the court reasoned that the State was not required “to conduct a reasonable search of public records in an attempt to ascertain Mr. Jones’s correct address before selling his property.” The court found that the State only needed to send notice to Jones’s last known address, which it did. See Jones v. Flowers, No. 04-449, 2004 WL 2609800 (Ark. Nov. 18, 2004). The court accordingly concluded that the sale was valid because Jones received adequate notice for due process purposes. See Id.
The Supreme Court agreed to review the case to resolve the split among state and federal courts on the question of what steps the government must take to locate property owners before taking their property.
Analysis
Jones, who lost his property because he did not pay property taxes for six years, argues that he did not receive constitutionally adequate notice of the tax sale or of his right to redeem the property. On the other hand, Flowers argues that the State gave Jones adequate notice when it mailed certified letters to his last known mailing address, even though the letters were returned undelivered. The Supreme Court therefore will determine whether, under the due process clause of the Fourteenth Amendment, the state of Arkansas gave Jones proper notice when it did not take additional steps to locate Jones after the notification letters were returned unclaimed.
The Mullane Standard of Notice
The due process clause of the Fourteenth Amendment provides that “no State shall deprive any person of life, liberty, or property, without due process of law.” U.S. Const. Amend. XIV, §1. A requirement of due process “is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of [State] action and afford them an opportunity to present their objections.” Mullane v. Central Hanover Bank &Trust, 339 U.S. 306, 314 (1950) (emphasis added).
Although the State had Jones’s address and mailed him two notices, the post office returned the notices as “unclaimed.” The question in this case therefore becomes whether due process required the State to take additional steps to locate Jones before taking his property.
The Flowers Analysis
Flowers argues that the government discharges its due process obligations when it mails notice to a property owner’s last known mailing address, even if the notice does not actually reach the recipient. See Brief for the United States As Amicus Curiae Supporting Respondents at 18–19. Flowers emphasizes that adequacy of notice should be assessed ex ante from the perspective of the party giving notice and at the time it faces the obligation to provide such notice, not “with the 20/20 vision of hindsight.” See Id. at 7 (citing Graham v. Connor, 490 U.S. 386, 396 (1989) (internal quotations omitted)). If adequacy of notice were determined after the fact, it would always be possible for the intended recipient to point out the ways he could have been reached. See Id. In addition, the Supreme Court has recognized that sending “ordinary mail to the record addresses” is sufficient because it constitutes a “serious effort” to inform the recipient of the proceedings. See Id. at 12.
The Jones Analysis
On the other hand, Jones argues that where the government knows that its attempt to provide notice has failed, due process requires that the government take further reasonable steps to notify the property owner. See Brief for Petitioner at 6. Jones therefore claims that when the post office returned the unopened notice, the State had an obligation to find the correct mailing address because the State knew that notice had failed. See Id. at 11. Jones points to a number of cases to support his argument. He cites a Supreme Court decision which held that a state had failed to provide notice “reasonably calculated” to apprise the recipient of the pendency of the forfeiture proceedings when the state knew that the recipient was in jail, and not at the address to which the state had mailed notice. See Robinson v. Hanrahan, 409 U.S. 38, 39–40 (1972). Jones also points to another case in which a federal circuit court held that, “when prompt return of an initial mailing makes clear that the original effort at notice has failed, the party charged with notice must make reasonable efforts to learn the correct address before constructive notice will be deemed sufficient.” Plemons v. Gale, 396 F.3d 569, 576 (4th Cir. 2005).
Once the State’s duty to take further reasonable steps to provide notice was triggered, Jones argues that the State could have “easily provided” notice to him. See Brief for Petitioner at 11. Reasonable steps might have included searching the telephone book, the Internet, and telephone and utility company listings. See Id. at 12–13.
Discussion
Implications if the Court expands due process requirements
The Supreme Court may reverse the lower court’s decision and hold that where the government knows its attempt to provide notice has failed, due process requires that the government take additional reasonable steps to locate the recipient. If this is the case, property owners may be better informed of their rights, and the constitutional entitlement to “life, liberty, and property” may be considered to be upheld. Requiring further duties may nevertheless subject the government to significant administrative burdens and undermine the process of transferring property rights.
First, requiring the government to find a new method of notice every time there is doubt about whether the notice reached its intended recipient, or whether a more certain means of delivery is available, would impose substantial new administrative burdens on local, state, and federal governments. See Brief for the United States as Amicus Curiae Supporting Respondents at 19. In Arkansas alone, for example, 18,000 parcels of real estate are certified as tax delinquent each year. See Id. Proponents of the status quo argue that requiring the government to undertake repeated rounds of notice, each of which is potentially more burdensome and uncertain than the last, would impose significant costs and could threaten to make the entire process of collecting taxes, loans, and assets unworkable. See Id. at 20. Such administrative burdens could, in turn, undermine a government which relies on tax dollars to perform its functions. See Id. In addition, requiring the government to provide more due process requirements would open the door to uncertainty about the adequacy of the due process provided and invite a myriad of challenges by disappointed owners given that whatever method the State used, disappointed owners could always argue that some other method was available that would have resulted in actual notice. See Id. at 28.
Second, additional due process requirements may have a destabilizing effect on property rights. See Id. at 8. If the government’s method of notice could regularly be challenged as inadequate, the process of tax sales and property transfer could be rendered completely unpredictable. See Id. The possibility of people challenging notice and the subsequent property sale would cast doubt on the finality of property transactions, undermine the government’s ability to recoup unpaid taxes by foreclosing and reselling, and may make the properties involved less marketable. See Id. at 8, 28. Requiring additional duties may also impose costs on successor owners who had good reason to believe they had acquired good title but must expend time and money to either relocate or defend their rights in court. See Id. at 28.
Implications if the Court affirms the status quo
On the other hand, the Supreme Court may affirm and hold that when notice is returned unclaimed after being mailed to the last known address, due process does not require the government to take additional steps to locate the recipient; simply sending notice to a property owner’s last known address is “reasonably calculated” and sufficient for constitutional purposes. If this is the case, the government will not have to spend additional resources on repeated attempts to contact property owners and on increased litigation from people challenging adequacy of notice. Thus, property will be more easily transferable and may be put to more efficient use. Also, irresponsible owners will be forewarned that failing to pay property taxes and failing to notify the appropriate authorities of a change in address may lead to loss of their property.
However, not requiring the government to take additional steps to notify the property owner may deprive property owners of their constitutional right to due process. See Brief for Petitioner at 6. Proponents of requiring the government to take additional steps to locate the property owner point out that determining what is reasonable “under all the circumstances” requires “an inquiry into the efforts made by the State in attempting to effect notice, the likelihood that additional efforts would provide notice, and the burden of making additional efforts in light of the value and importance of the property interest at stake.” See Id. at 7. Proponents argue that, in this case, the State could have easily provided effective notice by consulting telephone directories and voter registration rolls, or by contacting Jones’s employer or the occupants of the house. See Id. at 11–13. This small burden, the argument goes, is substantially outweighed by the constitutional right to own property. Thus, where mailed notice of a tax sale or property forfeiture is returned undelivered, a government that does not take additional reasonable steps to locate the owner deprives the owner of the fundamental right to due process. See Id. at 6.
Conclusion
The due process clause requires notice “reasonably calculated” to inform the recipient of an upcoming governmental proceeding. The issue before the Court is whether, when mailed notice of a tax sale or property forfeiture is returned undelivered, the government is required to take additional steps to locate the owner before taking the property. A holding that the government is required to take additional steps may subject the government to significant administrative burdens and undermine the process of transferring property rights. On the other hand, a decision adverse to Jones may make property from tax sales more transferable, but may also deprive property owners of their constitutional right to due process.
Written by:
Thomas F. Lavery IV
Vi T. Vu