Ohio Tax Foreclosure Damages Suit Tossed by State Appeals Court

An Ohio appeals court has held that former homeowners in a Cuyahoga County tax‑foreclosure program cannot bring a damages lawsuit for alleged loss of equity, and instead must pursue mandamus to determine any compensation owed.​

What the appeals court decided

• The Eighth District Court of Appeals confirmed dismissal of a putative class action by former homeowners seeking money damages from the county and related entities over tax foreclosures where properties did not sell at auction.​

• The court held that under Ohio law, any remedy for alleged uncompensated “takings” of property equity in this context must be sought through a mandamus action, not through an ordinary damages suit.​

Takings and inverse‑condemnation claims

• The homeowners had raised constitutional takings and inverse‑condemnation claims, arguing that the county’s retention of equity in properties transferred through the tax‑foreclosure process violated the Ohio and U.S. Constitutions.​

• The appellate panel concluded that, in light of Ohio’s statutory tax‑foreclosure framework and available procedures for owners to assert their rights, the trial court correctly rejected those takings‑based damages claims.​

Excessive fines argument

• The plaintiffs also contended that Ohio’s tax‑foreclosure system amounted to an excessive fine under the Ohio Constitution when owners allegedly lost equity beyond the tax debt.​

• The court disagreed, holding that the state’s tax foreclosure process is remedial rather than punitive, and therefore does not constitute an excessive fine.​

Relationship to broader tax‑foreclosure litigation

• The decision fits into ongoing litigation across Ohio and other states over whether “home equity theft” in tax foreclosures is an unconstitutional taking, an issue spotlighted by the U.S. Supreme Court’s decision in Tyler v. Hennepin County.​

• Ohio courts have generally emphasized that the state’s procedures give property owners multiple opportunities to protect their interests, and that challenges to alleged loss of equity must follow specific, often mandamus‑based, remedies rather than stand‑alone damages suits.​