UNITEDSTATESDISTRICTCOURT EASTERN DISTRICT OF MICHIGAN SOUTHERNDIVISION KENNETH TAYLOR, Plaintiff, CaseNumber19-12548 v. HonorableDavidM.Lawson COUNTYOFOAKLAND, CITY OF SOUTHFIELD, FREDERICKZORN,SOUTHFIELDNON-PROFIT HOUSING CORP., SOUTHFIELD NEIGHBORHOOD REVITALIZATIONINITIATIVE,LLC,and KENSONSIVER, Defendants. / OPINIONANDORDERGRANTINGMOTIONS TODISMISSBYDEFENDANTS CITY OFSOUTHFIELD,SOUTHFIELDNON-PROFITHOUSINGCORP.,AND SOUTHFIELD NEIGHBORHOOD REVITALIZATION INITIATIVE, LLC., AND GRANTINGMOTIONTOSTRIKECLASS ALLEGATIONS OaklandCountyforeclosedonplaintiffKennethTaylor’shometocoverhisdelinquenttax obligation. WhenTaylorfailedtoredeemhisproperty,theCountysoldittotheCityofSouthfield, whichsoldittootherdefendantsinthecase. Taylorallegesthathishomewasworthconsiderably more than the amount of the property taxes he owed. He has sued the County and everyone else in the chain of transfer to recovery the excess value and other damages. He also seeks to pursue hisclaimonbehalfofaclassofsimilarlysituatedpropertyowners. TheCityofSouthfieldandits individuallynamedofficials,theSouthfieldNeighborhoodRevitalizationInitiative(SNRI)andits affiliated entity, Southfield Non-Profit Housing Corporation (SNHC), have moved to dismiss the complaint,contendingthattheconspiracy-basedclaimsagainstthemcannotsucceedbecausethese defendants did not enter the picture until after the County had foreclosed and seized the property. OaklandCountyhasmovedtostriketheclassallegations,contendingthatitisnotadministratively feasible to identify the class members. The motions are fully briefed, and oral argument will not assist intheir resolution. TheCourt will decide the motions on the papers submitted. E.D. Mich. LR 7.1(f)(2). The sole claim against all the defendants (except Oakland County) charges that they conspired to take the plaintiff’s property — the value in excess of the delinquent tax debt — and thereby deprive him of his civil rights. But because the property was seized before these
defendants became involved, they could not have conspired to cause a harm that already had occurred. Therefore, the complaint fails to state a viable claim against those defendants and the motion will be granted. Identifying the putative class members likely would require a series of mini-trials to determine whether delinquent tax foreclosures resulted in a deprivation of excess equity. Therefore, the plaintiff cannot prevail on the ascertainability, predominance, and superiority requirements for class certification. The defendants’ motions to dismiss will be granted, and Oakland County’s motion to strike the class allegations will be granted. The case will proceedas anindividual action against OaklandCounty only. I.
The basic facts are undisputed. Taylor owned a house in Southfield, Michigan. When he failed to pay the real estate taxes due on the property in 2014 and other prior years, the Oakland County Treasurer foreclosed on the property as allowed by the Michigan General Property Tax Act, Mich. Comp. Laws §§ 211.1, et seq. On February 8, 2017, the Oakland County, Michigan circuit court enteredajudgmentofforeclosure. Taylor did not redeem the property by paying the outstanding tax liability, appeal the foreclosure, or seek post-judgment relief. Exercising a then-applicable provision of the General Property Tax Act, the Oakland County Treasurer took absolute title to the property and conveyed it to the City of Southfield, which in turn conveyed it to defendant Southfield Neighborhood Revitalization Initiative, LLC (SNRI) for disposition by SNRI and its affiliated entity, Southfield Non-ProfitHousingCorporation(SNHC). SNRIenteredintoareleasewiththeplaintiffinwhich he agreed to vacate the property in consideration for a $2,000 payment. However, the plaintiff refused to vacate the property, and SNRI ultimately evicted him. Despite having equity in the homethatfarexceededtheamountofhisunpaidpropertytaxes,Taylorreceivednothingfollowing
the foreclosure. Taylor filed a complaint without a lawyer’s help on August 29, 2019, asserting various claims relating to the foreclosure of his home due to unpaid property taxes. The foreclosure resulted in Taylor losing the entire interest in his house, even though he says that the value far exceededhistax liability. OnNovember 12,2020, formerUnitedStatesDistrict Judge Stephanie Dawkins Davis adopted a report from a magistrate judge in this Court recommending that the complaint be dismissed without prejudice because the Court lacked subject-matter jurisdiction over Taylor’s claims. However, before Judge Davis filed her opinion, the Sixth Circuit decided Freed v. Thomas, 976 F.3d 729 (2020), which marked a “monumental sea-change” in this circuit
withrespecttoataxpayer’srighttoreceivetheequityinhishomefollowingataxforeclosure. See Rep., ECF No. 63, PageID.1328. There, the court of appeals overruled the precedent that Judge Davis relied on when she dismissed Taylor’s complaint. Under the new governing law, federal courts may exercise jurisdiction over claims challenging the right of a local taxing authority to retainforeclosureproceedsinexcessofanunpaidtaxliability. Freed,976F.3dat734-40. Ayear after the dismissal, Taylor, thenrepresented by counsel, filed a motion to reopen his case and file an amended complaint. The plaintiff’s motion was referred to Magistrate Judge David R. Grand, who issued a report recommending that the Court grant Taylor’s motion to reopen and allow him to file an amended complaint. The defendants filed timely objections to the report and recommendation,whichtheCourtoverruled. Taylor filed a first amended complaint, which pleads claims against defendant Oakland Countyfor(1)unlawfultakingofpropertywithoutjustcompensationinviolationoftheFifthand Fourteenth Amendments (Count I), (2) inverse condemnation (Count II), and (3) procedural due
process violations (Count III); and it pleads claims against defendants City of Southfield, SNHC, and SNRI and the named City officials (Frederick Zorn and Kenson Siver, who also are board members of SNHC and SNRI) for unlawfully conspiring to violate the plaintiff’s property rights (CountIV). At the parties’ request, the Court enlarged the dispositive motion deadline, and on April 24,2023,defendantsCityofSouthfield,Siver,andZornfiledamotiontodismissarguingthatthe amendedcomplaintfailedtostateanyviablecauseofactionagainsttheCityforanytakingofthe plaintiff’s equity interest, and further contending that the individual defendants were entitled to qualified immunity. On the same date, defendants SNHC and SNRI filed a motion to dismiss
arguing that as a matter of law their post-foreclosure conduct in acquiring the property from the City of Southfield had no causal connection with any constitutional injury to the plaintiffs, the amended complaint did not plead facts sufficient to support a claimof civil conspiracy, and all of the plaintiff’s claims against SNRI and its affiliates are barred by a release of “all claims” against those entities, which the plaintiff signed in 2017, in consideration for his receipt of a payment by thedefendantsof$2,000in“movingassistance”thatwasoffered tohimforhispromisetovacate the residence. On June 14, 2023, defendant Oakland County filed a motion to strike the class allegations from the complaint, arguing that such claims are foreclosed by the Sixth Circuit’s controllingholdinginTarrifyProperties,LLCv.CuyahogaCounty,37F.4th1101(6thCir.2022), wherethecourtofappealsupheldadecisiondenyingamotiontocertifyaclassofpropertyowners who suffereda similarloss followingtaxforeclosures. Id.at1106. Afterthemotionsweresetfororalargument,theCourtreferredthepartiestomediationin advance of the hearing, but the retained mediator reported that the parties made essentially no seriousefforttoachieveanegotiatedresolution,preferringinsteadtoawaittheCourt’srulingson
theirseveralmotions. II. Defendants City of Southfield and its officials Fredrick Zorn and Kenson Siver seek dismissal of the sole count against them for civil conspiracy on the grounds that (1) this case is controlled by Hall v. Meisner, 51 F.4th 185 (6th Cir. 2022), and must be dismissed because all of the defendants’ alleged conduct occurred after the unlawful taking and had no effect upon the plaintiff’srights,(2)itisundisputedthatanyactsbytheCity defendantsoccurredafterthetaking was accomplished by the County, and they therefore cannot constitute “overt acts” in furtherance of a taking conspiracy, (3) no City policy has been identified that could have caused the
foreclosure,sinceitwastheCounty,nottheCity,thatforeclosedonthehometocollectaproperty tax debt owed to the County, and (4) the individual defendants are entitled to qualified immunity because there was no clearly established law recognizing a right to recovery of excess equity in a homesubjecttotaxforeclosurebeforetheSixthCircuit’swatersheddecisioninFreedv.Thomas, which reversed decades of precedential case law. Defendants SNRI and SNHC make similar arguments. They also add that all of the claims are barred by a release of claims that the plaintiff executed in 2017 in consideration for a payment of $2,000 in “moving assistance” intended to assistthe plaintiff with vacating the home. The plaintiff responds that (1) Hall is distinguishable because that case did not involve a civilconspiracyclaim,andinSinclairv.Meisner,No.22-1264,2022WL18034473(6thCir.Dec. 29, 2022), the Sixth Circuit remanded a civil conspiracy claim to be reconsidered by the district courtinlightofitsdecisioninHall,and(2)theplaintiffhasallegednumerous“overtacts”through which SNRI and SNHC and their principal officers and shareholders, some of whom also held
official positions with the City, persuaded the City to exercise its right of first refusal to obtain foreclosed properties and then transfer them to SNRI to be sold for a profit. Addressing SNRI’s and SNHC’s motion,he adds that the “release of claims” hadnothingtodo with his takingclaim, sinceitwasonlyconcernedwithremoval ofhis personalbelongingsfromthe home,not withany claim for unlawfultaking. The plaintiff brought his claims under 42 U.S.C. § 1983, under which he must plead and prove that he suffered the deprivation of a right secured by the Constitution or laws of the United States by a person acting under color of state law. West v. Atkins, 487 U. S. 42, 48 (1988). The constitutional right he cites is found in the Fifth Amendment, which prohibits governments from
taking private property “for public use without just compensation.” U.S. Const. amend. V; Chicago,B.&Q.R.Co.v.Chicago,166U.S.226(1897)(applyingtheTakingsClausetothestates through the Fourteenth Amendment). He also cites parallel state law, which Michigan courts interpret as coextensive with federal law. See Peterman v. State Dep’t of Nat. Res., 446 Mich. 177,184n.10,521N.W.2d499,504n.10(1994). It is beyond debate by now that a government’s foreclosure of a private home to satisfy a tax debt that is less than the fair market valueof the home atthe time ofthe seizure,coupledwith a subsequent refusal by the foreclosing authority to refund the excess value to the divested homeowner,constitutesanunlawfultakingofprivatepropertyprohibitedbytheFifthAmendment. The Sixth Circuit so held when it reversed decades of contrary case law in its watershed decision in Hall v. Meisner, 51 F.4th 185, 188 (6th Cir. 2022) (“The government may not decline to recognizelong-establishedinterestsinpropertyasadevicetotakethem.Thatwastheeffectofthe Michigan Act as applied to the plaintiffs here; and we agree with the plaintiffs that, on the facts alleged here, the County took their property without just compensation. We therefore reverse the
district court’s dismissal of their claim against the County under the Takings Clause of the U.S. Constitution.”). ThatruleoflawwasinscribedintotheedificeofFifthAmendmentjurisprudence by the Supreme Court’s recent decision inTyler v. Hennepin County, 598 U.S. 631 (2023). Id. at 639(“TheCountyhadthepowertosellTyler’shometorecovertheunpaidpropertytaxes. Butit could not use the toehold of the tax debt to confiscate more property than was due. By doing so, it effected a ‘classic taking in which the government directly appropriates private property for its ownuse.’TylerhasstatedaclaimundertheTakingsClauseandisentitledtojustcompensation.”) (citing Tahoe-Sierra Preservation Council, Inc. v. Tahoe Reg’l Planning Agency, 535 U.S. 302, 324(2002)).
The question now before the Court is not whether the amended complaint adequately pleads a case of liability for an unlawful taking, but instead which of the named defendants on whom the burden of that liability may rest. The Sixth Circuit addressed that question squarely in Hallandheldthat“theCountyaloneisresponsibleforthetakingoftheplaintiffs’property.” Hall, 51 F.4th at 196. The court reasoned that ““the act of taking is the event which gives rise to the claim for compensation” under the Fifth Amendment. Ibid. (quoting Knick v. Twp. of Scott, --- U.S.---,139S.Ct.2162,2170(2019). AndthatoccurredforHallwhentheCountytook“absolute title” to his home. Ibid. However, remember that the court of appeals upheld the dismissal of all of the plaintiff’s other causes of action besides the taking claim, adopting the reasoning of the district court. Id. at 196-97. The dismissed claims included allegations based on the Eighth Amendment Excessive Fines clause, procedural due process, substantive due process, and unjust enrichment. Following up on the new rule laid down in Hall, the Sixth Circuit has explained in subsequentdecisionsthatifapublicauctionisheldtodisposeoftheproperty,thentherecoverable
compensation for the property taken is limited to the excess of the sale price at auction over the taxdebt. Freed,81F.4that659. Thepropertyherewasnotsoldatpublicauction. Instead,itwas transferred under a now-repealedstatutory procedure for a “minimum bid,” and then at a nominal price. See Mich. Comp. Laws § 211.78(m)(1) (2015) (allowing municipalities to purchase foreclosedpropertyforthe“minimumbid,”thatis,theamountofthedelinquenttaxespluscertain other charges) with Mich. Comp. Laws § 211.78(m)(1) (2021) (requiring purchasing municipalities to pay “the greater of the minimum bid or the fair market value of the property” to purchase foreclosed property). That circumstance does not affect the issue of taking, although it mayimpacttheamountof justcompensation.
The amended complaint pleads a single count for civil conspiracy against the City of Southfield, its officials, and SNRI and its affiliated entity, SNHC. To state a claim of conspiracy under section 1985, the plaintiff must allege (1) that a single plan existed; (2) that the alleged conspirators shared in the general conspiratorial objective to deprive the plaintiff of his constitutionalorfederalstatutoryrights;and(3)thatanovertactwascommittedinfurtheranceof the conspiracy that caused injury. Hooks v. Hooks, 771 F.2d 935, 944 (6th Cir. 1985). As Hall anditsprogenymakeclear,though,thesolecognizableinjurytotheplaintiff’srightsisthetaking of the value of his residence that exceeds an assessed tax debt. That act occurred when absolute titletothepropertytransferred totheCounty. Atthatpoint,theforeclosingauthority—Oakland County —was the lone partyliablefor such ataking. The plaintiff proclaims in his amended complaint that “[t]he instant litigation does not challenge the forfeiture and foreclosure of the subject properties. Rather, it challenges what occurred after the properties were forfeited and foreclosed upon.” Am Compl. ¶ 3, ECF No. 77,
PageID.1513. Inhisoppositionbrief,theplaintiffexpoundsatlengthonthecircumstances,which, he says, prove an allegedly conspiratorial plan between the City of Southfield and SNRI, but he hasnotpointedtoanyfacts—eitherallegedorprovable—thatinanywaysuggestthateitherthe City or SNRI engaged in an agreement with Oakland County, or that any such agreement in any wayinfluencedorcausedtheforeclosureoftheplaintiff’shome. Thedeprivationofrightsinthis casewasthetakingofthehomebyataxforeclosure. Therearenofactseitherallegedorevidenced by the record suggesting that the City or SNRI had any involvement in the County’s decision to foreclose on the plaintiff’s home. There is, therefore, no conceivable set of facts on which the plaintiffcouldprevailonhiscivilconspiracycountagainsttheCity,itsofficials,SNRI,orSNHC.
Theplaintiffsaysthat Sinclairv.Meisner,No.22-1264,2022WL18034473(6thCir.Dec. 29, 2022) (order), held otherwise, and that Hall did not involve a conspiracy claim. Contrary to the plaintiff’s position, the Sinclair panel did not hold that a civil conspiracy claim was viable on facts such as those alleged here. Instead, the court of appeals held only that the dismissal of a conspiracy claim on the sole ground that no constitutional violation adequately was pleaded was improperinlightofitsholdinginHall. Seeid.at*5(“ThedistrictcourtfoundthatSinclair’scivil- conspiracyclaimwouldbefutilebecauseshefailedtoplausiblyallegethatanydefendantviolated her constitutional rights. This finding, again, is erroneous in light of Hall. Because decisions regardingmotionsforleavetoamendaresubjecttothedistrictcourt’sdiscretion,thedistrictcourt shouldreevaluateSinclair’scivilconspiracyclaiminlightofHall.”). Thatdecisioncannotberead for the propositionthat an alleged conspiracy may be proven in the absence of anyallegation that the party solely responsible for a constitutional injury participated in any agreement with other nameddefendants. It is not enough to allege that one defendantcaused an injury whileother defendants, who
never entered into any agreement with the sole culpable party, conspired among themselves to accomplishsomeotherevilthatitselfhadnoimpactontheviolationoftheplaintiff’sconstitutional rights. The Sixth Circuit made clear in Hall that nothing that occurred after the tax foreclosure had any impact on the plaintiff’s property rights, because after that event the plaintiff no longer held any title to his home. Hall, 51 F.4th at 196 (“Before that event, the plaintiffs held equitable title;afterit,theyheldnotitle at all.”). Theplaintiff’scontraryargumentsentirelyoverlookormisconstruethecontrollingholding in Hall, and the plaintiff’s presentation fails to identify any pleaded facts that could establish a conspiracy involving Oakland County and any of the other defendants. See Tawana Hall v.
Meisner(HallII),No.21-1700,2022WL7478163,at*1(6thCir. Oct.13,2022)(“Theplaintiffs inboththisappealand[Hall I]haveasurfeitofalternativeclaimsanddefendants. Tobeginwith some defendants: we affirm the district court’s dismissal of all the plaintiffs’ claims against the City of Southfield, the Corporation, and the Initiative. The relevant actions of these defendants cameaftertheCountytookabsolutetitletoplaintiffs’homes. Thatwastheactionthatcausedthe injury giving rise to this suit; what happened afterward had no effect upon their legal rights.”); Flummerfeltv.CityofTaylor,No.22-10067,2023WL4704878,at*6(E.D.Mich.July21,2023) (“While acts in furtherance of the conspiracy are alleged to have occurred before at least one of theforeclosuresatissueheretookplace,nothingintheAmendedComplaintsuggeststhatWayne County’s actions in conducting the foreclosure are part of the conspiracy. Indeed, the alleged conspiracyonlyrelatestotheabuseoftheROFRprogram,whichnecessarilyoccursaftereachof the foreclosures took place and of which Wayne County is not alleged to be a part. Accordingly, the alleged constitutional deprivations (the taking and the due process violation) were completed by Wayne County when it foreclosed on the subject properties and the purpose of any conspiracy
could not have been to deprive Plaintiffs of these federal constitutional rights. Thus, Plaintiffs’ Amended Complaint fails to plausibly allege an essential element of a § 1983 civil conspiracy (a deprivation of a federal right) and the Magistrate Judge correctly concluded that this claim must bedismissed.”). Theamendedcomplaintdoesnotallegefactsthatmakeoutaviableclaimofconspiracyto violate civil rights against the defendants. The motions by the City of Southfield, its officials, SNRI, and SNHC will begranted. III. The plaintiff wants to bring this claim as a class action and has alleged that he is similarly
situated to other property owners whose property was taken by the delinquent tax foreclosure procedures and who were not paid the equity that exceeded their tax debt. Defendant Oakland County argues that (1) the claims of any potential absent class members whose property was foreclosedandsoldbyOaklandCountywerethesubjectofaseparateclassactionthatwasresolved by a settlement and the entry of a final judgment in Tonya Bowles v. Oakland County, No. 20- 12838(E.D.Mich.);and(2)eveniftheclaimsarenotforeclosedbytheclasssettlementinBowles, class certification is barred in this case by the Sixth Circuit’s holding in Tarrify Properties, LLC v.CuyahogaCounty,37F.4th1101(6thCir.2022),wherethecourtofappealsheldthatthedistrict court did not err by denying class certification for nearly identical claims, since it would be impossible even to ascertain the class membership without a “mini-trial” to determine the market valueofeverysubjectproperty whenit was foreclosed. The plaintiff responds that (1) the County’s motion is premature because it essentially amounts to an opposition to class certification presented before any motion for class certification hasbeenfiled,(2)othercourtsinthisdistrict,e.g.intheBowlescase,havecertifiedsimilarclasses
forforeclosuretakingclasses,(3)Tarrifyisdistinguishablebecauseinthatcasetheclassincluded properties that were abandoned, and the court of appeals also observed that Ohio assessed tax valuationsrelativelyinfrequently(only everysixyears), (4)unlike Ohio,Michigan reassesses tax valuations annually, and (5) the class can be defined in a readily ascertainable manner by relying on the assessed valuation (or some multiple thereof) as a proxy for fair market value, foreclosing the need of a “mini-trial” todeterminemarketvalueofeach property. Althoughperhapsslightlymorecomplicatedthanorderingfromarestaurantmenu,aparty seeking class certification under Federal Rule of Civil Procedure 23 must choose all four items undercolumn(a)andpickatleastonemorefromcolumn(b). Clemonsv.NortonHealthcareInc.
Retirement Plan, 890 F.3d 254, 278 (6th Cir. 2018). The “(a)” requirements are numerosity, commonality, typicality, and adequate representation. Fed. R. Civ. P. 23(a). The “(b)” requirementchosenbytheplaintiffrequiresthat commonquestionsoflaw orfact“predominate,” and the collective approach is “superior” to other methods of adjudicating the controversy. Fed. R.Civ.P.23(b)(3);SanduskyWellnessCtr.,LLCv.ASDSpecialtyHealthcare,Inc.,863F.3d460, 466 (6th Cir. 2017). Assuming without deciding that the plaintiff can satisfy the Rule 23(a) requirements, he stillwillhaveaninsurmountabletaskmeetingRule23(b)’sdemands,oneofwhichisthattheclass format “is superior to other available methods” of adjudicating the controversy. Fed. R. Civ. P. 23(b)(3). Among the considerations for demonstrating superiority is “the likely difficulties in managing a class action.” Fed. R. Civ. P. 23(b)(3)(D). One management requirement, in turn, is identifying class members, which sometimes is referred to as “an implied ascertainability requirement.” SanduskyWellnessCtr.,863F.3dat466(citingColev.CityofMemphis,839F.3d 530, 541 (6th Cir. 2016)). The ability to identify easily the class members “aids the inherent
efficiencies of the class device by ensuring administrative feasibility,” which includes conveying prompt and accurate notice to putative class members. Ibid. “[T]he ascertainability requirement . . . necessitate[s] ‘a class description [that is] sufficiently definite so that it is administratively feasible for the court to determine whether a particular individual is a member.’” Ibid. (quoting Youngv.NationwideMut. Ins.Co.,693F.3d532,537-38(6thCir.2012)). The plaintiff wants to certify a class comprised of “all the owners of real property in Southfield,whoserealproperty,duringtherelevanttimeperiod,wasseizedthrougharealproperty tax foreclosure, which was worth and/or which was sold for more than the Tax Delinquency, and who was not refunded the Equity.” Am Compl. ¶ 70, ECF No. 77, PageID.1528. By this
definition, class membership is determined by the value of a putative class member’s foreclosed property compared to the amount of the tax delinquency. Determining property value, though, is necessarilyanindividualizedinquiry. Thecourtofappealsfoundthatfeatureofaclassdefinition problematicinTarrify,anothercasewhereacountyforeclosedonrealpropertythatallegedlywas worthmorethanthetaxobligationandkeptthedifference. 37F.4that1106-07. Inaffirmingthe denialofclasscertification,thecourtpointedoutthat“[d]eterminingfairmarketvaluerequiresan independentandindividualizedassessmentofeachabsentclassmember’sproperty”that“depends on many circumstances, including the size, location, use, and condition of the property,” the “relevant market conditions at the time of the transfer,” and the “physical conditions of each property.” Id. at 1106. That led the court to conclude that to identify putative class members, “a court must conduct an individualized, fact-intensive, and adversarialprocess to determine thefair market value for each property.” Ibid. The need for individualized proof to determine class membership led the court of appeals to doubt that common questions predominated over individual ones. Ibid. And that caused the
courttoquestion“whethertheproposedclassactionbeatstheconventionalapproachofresolving disputes on a case-by-case basis in terms of efficiency and administrability.” Ibid. (citing Wal- Mart Stores, Inc. v. Dukes, 564 U.S. 338, 348-57 (2011)). The court found these problems with ascertainability, predominance, andsuperiorityinsurmountable for theTarrify plaintiffs. Like the plaintiff in Tarrify, Taylor proposes using either the tax assessment valuation or someunspecifiedmultiplethereofasaproxyforfairmarketvalue,buttheSixthCircuitconsidered andexpresslyrejectedsuchaproxymeasurementasimpracticalandinsufficienttoovercomethese problems. The court found that in Ohio, “[a] government’s assessment of the value of property for tax purposes creates a ‘default valuation’ with respect to property value, not an unrebuttable
finding of value.” Id. at 1107. For that reason, the court believed that “[t]his challengeable presumption thus represents a potential starting point, in truth a data point, for ascertaining fair market value, not a conclusive answer.” Ibid. Some features in that case that softened the tax assessor’spropertyvaluationswerethesix-yearintervalsbetweenassessments,thefactthatmany of the properties were abandoned, and variations in depreciation. Ibid. The court also rejected several alternative measures of value that the plaintiff proposed for similar reasons, such as appointing special masters, creating subclasses, and conducting new mass appraisals. See id. at 1110. The problem was that “this case will boil down to mini-trials over each property’s value upon transfer.” Ibid. Taylor seeks to distinguish Tarrify by arguing that his property was not abandoned. But that argument does not persuade. The court of appeals reasoned that (1) tax valuation is merely one data point that may have a bearing on market value, not a determination of market value per se, (2) variations in market conditions over time would require individualized assessments of market conditions at the time of each foreclosure, (3) tax valuations, unlike market sales, do not
include any component of value based on the interior condition of the premises, (4) the methodology of tax valuation inherently is designed to be applied in gross, in order to achieve uniformity in valuation and avoid peculiarly high or low valuations for individual properties, and (5) due to the inherent nature of real estate, the specific location of every property becomes a dominant component of the valuation, which is a feature entirely overlooked by a generalized tax valuation scheme. None of those difficulties inhere only to “abandoned” properties, and the reasoning of Tarrify applies equally to all real properties involved in suits over unlawful takings by tax foreclosure. Moreover, the plaintiff’s presentation of expert testimony about methods for determiningthevalueofhishome,andhisargumentthatsome multipleofthetaxassessmentisa
moreappropriateproxyforfairmarketvalue,onlyunderscorethefact-intensivenatureofthevalue determination. The plaintiff argues that the need for individualized determination of damages is not necessarily an obstacle to class certification, citing In re Whirlpool Corp. Front-Loading Washer ProductLiabilityLitigation,722F.3d838,861(6thCir.2013). Thatargumentiscorrectasfaras it goes. But in this case the insurmountable obstacle to class administration is the determination of class membership, which necessarily must be accomplished at the outset of class litigation in ordertosupplytherequirednoticetoputativeclassmembers. Cole,839F.3dat541(recognizing that “(b)(3) class members are entitled to notice and are able to opt-out of the class”). No such undertakingmayevenbeattemptedwhereitisimpossibleinthefirstinstancetodeterminewhich properties were seized to satisfy debts that fell short of their fair market value, without an individualized inquiry into what the fair market value of each property was at the time of the foreclosure. The Sixth Circuit pointedly observed as much in an order granting a Rule 23(f) petition for interlocutory review in a case consolidated with Bowles on appeal. See In re Eric
Sabree, No. 22-0111 (6th Cir. Mar. 15, 2023), ECF No. 89-2, PageID.1773 (“Our opinion in Tarrify presents a significant obstacle to class certification in class actions like this one, in which plaintiffs are seekingsurplusequity.”). The court ofappeals noted that if the class consisted only ofpropertiessoldatpublicauction,thenascertainabilitymightnotbeaninsurmountableproblem, butinthiscaseitisundisputedthattheplaintiff’spropertywasnotsoldatauction. Moreover,any attemptto defineaclassincluding claimsof personswhosepropertieswere soldat auctionwould present even further difficulties since Taylor’s claims then would no longer be typical of such absentclassmembers. The plaintiff says that Oakland County isjumping the gun and itsarguments should await
the plaintiff’s own motion for class certification. However, it is clear that Tarrify is controlling and squarely on point, and its reasoning precludes certification of a class in this case. The Court therefore, willstrikethe classallegations from the amended complaint. IV. The plaintiff has not pleaded facts in his amended complaint that establish a viable cause of action against defendants City of Southfield, the Southfield Neighborhood Revitalization Initiative, Southfield Non-profit Housing Corporation, Frederick Zorn, or Kenson Siver. The plaintiff’s class claims cannot succeed because he will not be able to satisfy the requirements of FederalRule ofCivilProcedure 23(b)(3). Accordingly, it is ORDERED that the motions to dismiss the amended complaint by defendants City of Southfield, the Southfield Neighborhood Revitalization Initiative, Southfield Non-profit Housing Corporation, Frederick Zorn, and Kenson Siver (ECF No. 81, 82) are GRANTED, and the amended complaint against them only is DISMISSED WITH PREJUDICE.
It is further ORDERED that the motion by defendant Oakland County to strike the class allegations from the amended complaint (ECF No. 89) is GRANTED, and all of the plaintiff’s claims and allegationsonbehalfof aputative class are STRICKEN. s/DavidM.Lawson DAVIDM. LAWSON United States District Judge Dated: January 16, 2024