Wisconsin Residents File Class Action Against Unconstitutional Tax Foreclosure Practices

Class Action Lawsuit Filed in Wisconsin

The law firms Zimmer & Rens LLC and Milberg Coleman Bryson Phillips Grossman, PLLC recently initiated a class action lawsuit on behalf of affected residents in Wisconsin. The suit addresses serious grievances linked to unjust property tax foreclosure practices that have financially impacted numerous homeowners in the state.

Legal Issues at Hand

For decades, Wisconsin law allowed counties and municipalities, including the City of Milwaukee, to retain surplus funds accrued from property sales in tax foreclosure cases. Specifically, under Chapter 75 of Wisconsin Statutes, any surplus amount exceeding the owed taxes became the possession of local governments after properties were sold due to tax-related issues.

This practice has drawn significant scrutiny. According to the lawsuit, the United States Supreme Court affirmed in Tyler v. Hennepin County (2023) that surplus proceeds rightfully belong to former property owners and that retaining such funds is unconstitutional. This ruling, coupled with the state’s enactment of 2021 Wisconsin Act 216, mandates returning surplus funds to the original owners, yet many residents have found this change came too late for them.

The law may now require future surpluses to be returned, but according to the plaintiffs, hundreds of millions of dollars have been improperly taken from taxpayers, covering cases dating back to 1989. This situation has resulted in significant financial losses, particularly for those who owned property in the past.

Personal Stories of Affected Individuals

Among the individuals stepping forward as representatives in this lawsuit are John and Darlene Elliott, who lost their property over a tax debt of less than $5,000. The county auctioned off their investment property, resulting in a profit exceeding $25,000 — money they were unable to reclaim.

Similarly, Steven Skarban's family farm, spanning 72 acres, was seized due to an outstanding tax balance of less than $3,000. Following the foreclosure, the county sold the farm for over $420,000, reflecting a staggering profit while the Skarban family was left without their home.

Numerous other instances like theirs abound, highlighting a pattern of financial exploitation that has harmed countless residents throughout Wisconsin.

In one notable case reported by the Green Bay Press Gazette, Oconto County sold a 31-acre lakefront property for a profit of $720,000, emphasizing how these practices have led to substantial financial gains for local governments at the expense of property owners.

Legal Proceedings and Future Implications

This class action lawsuit is being processed in the Eastern District of Wisconsin federal court in Milwaukee, under case number 225-cv-00421-SCD, with Magistrate Judge Stephen C. Dries overseeing the proceedings. Protective measures have been put in place as legal representatives point out that if this case continues, counties are likely to face significant financial repercussions, running into millions of dollars in damages.

The plaintiffs, represented by attorneys from Zimmer & Rens LLC and Milberg Coleman Bryson Phillips Grossman, PLLC, aim to gather more individuals who have been similarly affected. Residents in this state are urged to come forward if they believe they are entitled to recover any funds due to these unconstitutional practices.

For more information or any inquiries about becoming part of the lawsuit, individuals can connect with the law firms responsible.

In conclusion, this case highlights how pivotal legal reforms can shape property rights and the responsibilities of local authorities, advocating for what many consider a long-overdue justice for those wronged by tax foreclosure policies.