From what I could tell, the case emanates from a unique aspect of the foreclosure process under Minnesota law.
Under normal circumstances in most states, the property owner is entitled to keep any equity in the property that remains after a bank or tax authority seizes it in a foreclosure and pays off the expenses associated with seizing and selling it. In effect, the bank or government can't make a profit off the transfer.
Under Minnesota law, there are many points during the foreclosure process when the property owner can intervene on his or her behalf to remedy their default -- and they are even given an opportunity to pay off the debt under a 5 or 10 year period. At a specific point in the process in Minnesota -- after the debtor has refused to avail herself of any of these remedies -- it ceases to be a "foreclosure" and effectively becomes a property abandonment process. The Minnesota statutes governing the abandonment process date back to the 1880s when it was apparently common for farmers to abandon their Minnesota farms and move west to the Dakota territories and settle on new land given to them under the Homestead Act.
In this case, the Federal courts simply ruled that the foreclosure/abandonment process was governed by Minnesota law. Importantly, the courts ruled that the sale of the condo was not a violation of the "Takings Clause" for a clear legal/technical reason — in that the debtor no longer had any ownership claim on the property after they passed the specific point in the Minnesota process where it went from a "foreclosure" to an "abandonment."
“Under normal circumstances in most states, the property owner is entitled to keep any equity in the property that remains after a bank or tax authority seizes it in a foreclosure and pays off the expenses associated with seizing and selling it. In effect, the bank or government can’t make a profit off.” the transfer.”
In many states, there is also a redemption period after the property is sold at public auction, when the origibal owner can buy the property back from the purchaser for auction price.