CHICAGO (LN) — U.S. District Judge Matthew F. Kennelly concluded Monday that the county’s failure to compensate property owners who lost their homes through tax deeds violated the Fifth Amendment’s Takings Clause and the Eighth Amendment’s prohibition on excessive fines, establishing municipal liability for the harm.
The ruling resolves the Monell liability question in Bell et al v. Pappas et al, a class action brought by Michelle Kidd, Goyce H. Rates, Southwest Organizing Project, and Palenque LSNA. The plaintiffs alleged that Cook County’s tax sale process, supervised by Treasurer Maria Pappas, resulted of private property without just compensation.
Kennelly’s decision follows a bench trial held April 7-9, 2026, which focused specifically on whether the county could be held liable for its inaction. The court had previously ruled in summary judgment that the tax sales themselves violated the Constitution, but needed factual findings to determine if the county’s failure to remedy the harm rose to the level of deliberate indifference required for municipal liability.
The evidence showed that the county’s Indemnity Fund, designed to compensate homeowners for lost equity, was severely underfunded and backlogged. An analysis by the Treasurer’s office revealed that between 2015 and 2022, only 5 percent of property owners who lost their homes through tax deeds received any compensation. The remaining 95 percent received nothing.
“Based on the evidence presented, the County failed to undertake any contemporaneous analysis of whether Cook County could use its home rule authority to compensate property owners who lost their property through the tax sale process,” Kennelly wrote. “The County’s failure to analyze this issue does not negate the obviousness of the risk of constitutional violations.”
The court rejected the county’s argument that it lacked the legal authority to pay compensation, clarifying that the Illinois Supreme Court’s decision in Bridgman v. Korzen limits the county’s power to assess and collect taxes but does not prohibit the county from using its home rule authority to provide just compensation for takings.
The county also argued that it was not on notice of the constitutional violations until the U.S. Supreme Court’s 2023 decision in Tyler v. Hennepin County. Kennelly dismissed this, noting that the county’s own officials had lobbied the state legislature for reforms after Tyler, acknowledging the problem existed.
“Kirvan testified that the Treasurer’s position as of October 2022 was that—in response to Tyler—legislation was needed to ‘fully restore equity to property owners that have lost their property to a tax deed,’” the opinion states. “This evidence clearly establishes that the County did not need a decision from this Court to understand that it had a problem with constitutionality.”
The court estimated that the county would need to pay approximately $15.4 million annually to compensate homeowners for lost equity, based on an average loss of $70,000 per homeowner and about 220 such cases per year. This figure is far less than the $15 million the county appropriated in 2025 for a separate Homeowner Relief Fund, which provided only $1,000 one-time payments to eligible residents.
“The County has provided no reason to depart from the Court’s previous decision,” Kennelly wrote regarding the county’s claim that it did not retain the property and thus was not responsible for the taking. “The Treasurer and County authorized the taking of homeowners’ property and thus are responsible for the Takings Clause violation.”
The parties are directed to meet and confer and file a joint status report by May 18, 2026, proposing further proceedings. An in-person status hearing is set for May 20, 2026.