The Minnesota Supreme Court has reinstated part of a challenge by homeowners in foreclosure-prone areas of Minneapolis who say the city overtaxes their properties.

The court agreed with the state Tax Court's rejection of many of the homeowners' arguments and two of the three tax assessment years involved. But it ruled that the Tax Court erred when it rejected a challenge of the 2010 assessment for improperly including multiple property owners.

"We're back in the fight," said David L. Wilson, one of the lawyers representing seven homeowners who allege that the city systematically and illegally inflated the assessment of homes. They allege that in the Phillips neighborhoods, Near North and Camden, the city set property values much higher than the prices they paid for homes the year before.

City Attorney Susan Segal said she was pleased the court upheld the dismissal of claims that assessments violated equal protection and uniformity clauses of the state and federal Constitutions.