A suit filed Tuesday against Wayne County and Treasurer Eric Sabree is the latest in a series of lawsuits that have questioned the constitutionality of the annual Wayne County Tax Auction and the seizure of private property.

Filed by the Pacific Legal Foundation, a conservative law firm based in California, the complaint focuses on the foreclosure of a southwest Detroit rental property that owed $144 in outstanding taxes in 2017. The case, which was filed on behalf of Erica Perez, a New Jersey-based woman, takes aim at Wayne County's notification process, excessive penalties — the property owed $357 in interest, penalties, and fees — as well as the fact that the county ultimately sold the house for $108,000 and pocketed all proceeds.

"The United States should not be a place where you can lose your entire home, your life savings, your nest egg over a small debt," said attorney Christina Martin. "It just should not work that way."

An attempt to reach Sabree for comment was unsuccessful. "It is our practice not to comment on lawsuits especially ones we have not seen or reviewed," said Mario Morrow, a spokesperson for the treasurer.

While the case at face value appears to champion the underdog — benefiting Detroiters caught up in the yearly tax auction — there is concern among some academics around the motivations of the Pacific Legal Foundation.

"They’re exploiting the injustices of the current system for their own ideological and political gain," said Joshua Akers, an assistant professor of geography and urban and regional studies at the University of Michigan-Dearborn.

More:Wayne County's auction program is supposed to keep people in homes. It's not.

More:Wayne County's controversial Action Before Auction program canceled for 2019

Over the years, the firm has taken on cases challenging affirmative action, bilingual education, inclusionary zoning, school integration, and the Voting Rights Act. It has a reputation of pushing a libertarian agenda set on diminishing the role of the government.

Akers, who has done extensive research on the nonprofit, contends the suit filed in Wayne County Circuit Court is a Trojan horse, less concerned with the constitutionality of the annual tax auction and more focused on using the court system to bolster property rights and solidify language around the Fifth Amendment, which prohibits private property from being taken for public use without just compensation.

The Wayne County Tax Auction, which was created in 1999 to reactivate abandoned space and recoup funds, has been widely criticized for ensnaring many cash-poor individuals, causing them to lose their greatest assets. An estimated 50,000 occupied homes have been foreclosed in the last two decades. In light of this bureaucratic chaos, attempts to bolster property rights may sound appealing, according to Akers. But he warns that long term, the repercussions of any further reinforcement of Fifth Amendment protections would be felt by the very underdogs the suit appears to prioritize.

"This seems pretty great — you're defending the little guy from government overreach. But in the end, what's lost is the ability to regulate the usage of property. The ability to ensure the health, safety, and well-being of those living around the property," said Akers explaining that while some homeowner could benefit from this, by and large, it is the wealthy, politically connected and big industries that win.

"The broader issue with Fifth Amendment claims is who it would benefit. The larger implications of success in their argument is that the owners of mines, drilling sites, and large industrial processes — the people who pay the lawyers' fees and bankroll the think tanks — would also be free of regulation on their properties," he said, adding that "claims of health and safety or any other limits on extractive and industrial practices could be considered a taking under the law."

Martin pushes against such allegations.

"I don’t know of any case where we’re pushing for some radical end to all regulations," she said. "It’s so unpragmatic, I don’t even know how to respond to that kind of accusation."

The attorney acknowledges, however, that taking the case to the high court is still a possibility.

"I am confident that we’re right," she said."I’m willing to push this all the way up to the U.S. Supreme Court if that’s what it takes to revise and restore property rights that have been taken away in Michigan and elsewhere."

Solidifying language around the Fifth Amendment and advancing property rights has been a mission of the Pacific Legal Foundation for decades.

In 2005, the organization represented Susette Kelo — often referred to as the owner of the Little Pink House — in a case that dealt with eminent domain in the Connecticut town of New London. The case, which went before the U.S Supreme Court, resulted in a monumental decision where the high court endorsed the authority of local governments to use eminent domain for economic development. A noteworthy development, however, was the high court's opinion where it declared that states and local authorities ultimately had the final say around eminent domain use.

This footnote — which cited a 2004 Michigan ruling overturning the previous Poletown ruling and prohibiting the use of eminent domain in pursuit of economic development — meant that the next challenge for many property rights activists was to turn to state-level campaigns.

"The characterization of the Kelo case as a radical expansion of government power became a tool to redefine the role of state and local governments in relation to private land markets and to extend the reorientation of the state’s redistribution power away from social services and toward capital accumulation," Akers wrote in a paper dealing with eminent domain in Michigan.

In 2006, following Kelo, Michigan voters approved Proposal 4 which narrowed the scope of what the government could take with eminent domain and mandated that should a government entity use eminent domain it must pay 25% more than fair market value for the property. It also codified what had just been a Michigan Supreme Court ruling prior.

Eminent domain is a tricky and sore topic in Michigan — specifically in Detroit. In the 1950s Black Bottom, a deteriorating but densely populated African American neighborhood was cleared for "urban renewal projects" that included the Mies Van Der Rohe designed Lafayette Park Development and Chrysler Freeway. In the 1980s another densely populated neighborhood — Poletown — was demolished for a new General Motors manufacturing plant.

Both cases left painful scars on the city that reflect the three arguments property rights activists typically use against eminent domain: It can be easily corrupted, it stymies urban economic development and costs are typically born by poor and minority communities.

According to Akers, however, the latter argument is ultimately deceptive.

"The proposed remedies of this property rights coalition – to dismantle government programs and curtail its ability to intervene in declining conditions in the urban core while paying premiums to landowners – offers little relief from current conditions," he said, pointing out its typically speculators and landlords benefiting in cases dealing with eminent domain. Over half of Detroit's residents, for example, are renters.

"The moral claims of property rights advocates, though they may be genuine, actually shift power from the public realm to the private realm where those with more resources control the agenda and eventual use of the land," he continued.

The Perez case, which Akers suggests is just the next frontier in a long-game around property rights, is also not Pacific Legal Fund's first time taking aim at Michigan's tax reversion law and auction. They are currently representing Uri Rafaeli, a Southfield man who lost his home to foreclosure after underpaying his tax bill by $8.41. The case, which lists Oakland County as the defendant, is set to go before the Michigan Supreme Court in the fall, according to Martin.

Like the Perez case, the Rafaeli suit is underpinned by inquiries regarding the Fifth Amendment.

"The question before the Michigan Supreme Court is whether or not that violates the Takings Clause of the Constitution and whether [Oakland County] has a responsibility to refund extra profits," Martin said, referring to the last clause of the Fifth Amendment.

According to Martin, the decision to bring on the Perez case was motivated by additional questions that got dismissed in the Rafaeli case.

"The question is: should the government be foreclosing at all?" said Martin, explaining that Perez had continued to pay her taxes after missing a payment in 2014. The future payments, however, did not, as may seem logical, count towards the skipped payment and stop the foreclosure.

"Because they are able to profit, the county does not have an incentive to avoid foreclosures," said Martin. "Instead they actually have an incentive to foreclose on people even when they shouldn’t. And we want to change that."

This mindset is not unlike many of the arguments made by housing advocates — and it's also what complicates feelings around the case. While some question what the Pacific Legal Foundation's goals are, its intuition to question the constitutionality of the tax auction is not unfounded: specifically the county's ability to profit off the foreclosure process.

Unlike a mortgage foreclosure, where the former homeowner's equity is recognized, with Michigan tax foreclosures all sale proceeds go to the county. The county has made a routine over the years of moving funds from the Delinquent Tax Revolving Fund (DTRF) — the money made from the auction — to the General Fund.

In 2014, the county moved $92 million from the DTRF to the general fund, and the following year, it moved $79 million. While Wayne County's 2015 recovery plan spelled out intentions to stop this practice, the county's 2018 Comprehensive Annual Financial Report noted that $26.1 million was moved from the DTFR to the General Fund.

This influx of auction cash is seen by many housing advocates as a problem that incentivizes foreclosures.

"As soon as you start to budget late taxes from the auction into your projections you got a problem. You’re just not going to do as much as you can to do right by people. It’s an incentive just as it would be in a business or in a personal pocketbook," Loveland Technologies CEO Jerry Paffendorf told the Free Press last fall. "If you took away that surplus, and just brought governments back to what they’d be making for property taxes, you would watch a lot of this dry up. They’d have no incentive to chase this thing around."

While Akers agrees this is also an issue, he contends this is a legislative matter and not one for the courts.

"It's an issue of policy not constitutional taking," he said of the General Property Tax Act that allows counties to keep profits. "The state Legislature could address that tomorrow."

But with it in the hands of the court, he's worried.

"The Pacific Legal Foundation is not wrong on a number of the claims, these all seem like legitimate claims that they’re making — the county didn’t notice right, the county took way more than they were owed, etc., etc. There seems to be a gross injustice in the system," he said, before adding that the problem isn't the claims — it's the final goal. "It’s a bit duplicitous on the part of Pacific Legal Foundation. What they’re seeking is to strip states of the right to regulate property and put people who control property in a position over the state."

Contact Allie Gross: AEGross@freepress.com. Follow her on Twitter @Allie_Elisabeth.