QuickTake:

The class-action lawsuit was initiated by a man who said the county sold his foreclosed property in Springfield for more than the property taxes owed and kept the nearly $87,000 in profits.

The Lane County Board of Commissioners has approved a proposed $1.35 million settlement in a class-action lawsuit that sought compensation for former homeowners after the county sold their foreclosed properties in excess of the taxes owed.

Martin Lynch was among the former property owners who brought the case against multiple Oregon counties in 2023, alleging the counties violated their constitutional rights when they sold their foreclosed properties for more than their debts and kept the surplus funds. 

According to a complaint filed in Oregon U.S. District Court, Lynch, as representative of his late wife’s estate, owed $31,660 in taxes and fees on his Springfield property when Lane County foreclosed on and sold it for $118,500 in 2020. 

The lawsuit followed a 2023 U.S. Supreme Court decision that found a Minnesota county had unconstitutionally retained the excess value of a woman’s condo above her tax debt. The court upheld the plaintiff’s argument that Hennepin County keeping the surplus value violated the Fifth Amendment’s takings clause, which bars the government from taking private property for public use without adequately compensating the property owner. 

Counties in other states have faced similar lawsuits in the wake of the Supreme Court ruling. In the Oregon class-action case, Multnomah County settled last year for $3.5 million. Other counties have also settled, court records show. 

A memo from Lane County Deputy County Counsel Mallory Beebe to county commissioners references state legislation passed in 2025 to bring Oregon into compliance with the Supreme Court decision. 

“The consequence is that the surplus amounts previously used to fund property management’s work on these properties is no longer available,” the memo states. “The longstanding practices used by the County (and all other Oregon counties) has been significantly altered, and moving forward, surplus funds will be sent to the state of Oregon who will process these claims.”

The board voted to approve the settlement as part of its July 14 consent calendar, with no discussion. 

“Given the risks associated with not returning the surplus funds to the former property owners, we are pursuing resolution of this matter,” the memo states.

Lane County Administrator Steve Mokrohisky did not respond to an email from Lookout Eugene-Springfield seeking comment. 

After court approval of the settlement, potentially affected property owners will receive a notice and will need to submit a claim for their surplus funds, according to the memo. The settlement states this only affects properties the county sold since 2017. 

If the total amount of the eligible claims exceeds the settlement fund, then the claims will be reduced pro-rata, according to the settlement. The settlement fund will also pay for plaintiff’s attorneys’ fees and the administrative costs of notifying former property owners. 

Any remaining money in the settlement fund will go to the Lane County Legal Aid Office to fund housing-related legal services, or another agreed-upon program, the settlement states.