CHICAGO (LN) — U.S. District Judge Matthew F. Kennelly found Cook County liable under Monell for systemic constitutional violations in its property tax sale system, ruling that the county was deliberately indifferent to the known risk that homeowners would lose equity without just compensation.
The ruling resolves the final liability phase of a class action brought by Michelle Kidd, Goyce H. Rates, Southwest Organizing Project, and Palenque LSNA against Cook County and Treasurer Maria Pappas. The plaintiffs alleged the tax sale system violated the Takings Clause, the Excessive Fines Clause, and due process guarantees.
Kennelly had previously ruled in December 2025 that the tax sales themselves violated the Fifth and Eighth Amendments. The bench trial held April 7-9, 2026, focused solely on whether the county could be held liable for those constitutional violations under 42 U.S.C. § 1983.
The court found the county had actual and constructive notice of the constitutional harm. Testimony from Justin Kirvan, policy director for the Cook County Treasurer, and James Thompson, director of assessment and property tax policy, established that the inadequacy of the Indemnity Fund was common knowledge.
An analysis by the Treasurer’s office showed that between 2015 and 2022, only 5 percent of property owners who lost their homes through tax deeds received indemnity awards. The fund was severely underfunded, with a balance of roughly $2 million against more than $22 million in outstanding judgments.
"The County knew that the Fifth Amendment prohibited the taking of property without just compensation and that the tax sales often led to properties being transferred despite property owners not being compensated for the lost equity in their properties," Kennelly wrote.
The county argued it lacked the authority to compensate homeowners, citing an Illinois Supreme Court decision limiting home rule powers over tax collection. Kennelly rejected this as a "post-hoc rationalization," noting the county had never conducted a contemporaneous legal analysis of its authority and had previously created a Homeowner Relief Fund.
The court also dismissed the county’s claim that compensation would cost "hundreds of millions of dollars" and "ruin" the county. Based on expert testimony averaging $69,167.72 in lost equity per property, Kennelly calculated the annual liability at approximately $15.4 million—a figure the county had already appropriated for other relief programs.
"The County has provided no reason to depart from the Court's previous decision," Kennelly wrote regarding the county's argument that it did not retain the property. "By failing to address this issue and consider any possible solution, the County disregarded an obvious need."
The parties must file a joint status report by May 18 proposing further proceedings. The case is set for an in-person status hearing on May 20.