IN THE SUPREME COURT OF IOWA

No. 07–1819

Filed June 4, 2010

J. THOMAS ZABER, On Behalf of Himself 

and All Others Similarly Situated,

Appellant,

vs.

CITY OF DUBUQUE, IOWA,

Appellee.

Appeal from the Iowa District Court for Dubuque County, Alan L. 

Pearson, Judge.

City resident appeals from a district court ruling granting the city’s 

motion for partial summary judgment on plaintiff’s refund claim. 

AFFIRMED AND CASE REMANDED.

Terry M. Giebelstein, Thomas D. Waterman, and Richard A. 

Davidson of Lane & Waterman LLP, Davenport, for appellant.

Ivan T. Webber and James R. Wainwright of Ahlers & Cooney, P.C., 

Des Moines, for appellee.

Terrence L. Timmins, Des Moines, for amicus curiae Iowa League 

of Cities.

Bruce H. Stoltze of Stoltze & Updegraff, P.C., Des Moines, and 

Brad A. Schroeder of Hartung & Schroeder LLP, Des Moines, for amicus 

curiae Iowa Trial Lawyers Association.
2

TERNUS, Chief Justice.

The appellant, J. Thomas Zaber, appeals the district court’s 

dismissal by summary judgment of his claim for a refund of cable 

television franchise fees imposed by the appellee, City of Dubuque, in 

excess of the city’s cost of regulation. The district court ruled Iowa Code 

section 477A.7(5) (Supp. 2007) retroactively authorized these fees, 

rejecting the plaintiff’s contention section 477A.7(5) violated his due 

process rights. We affirm the district court’s judgment in favor of the 

city.

I. Scope of Review.

Because this appeal arises from a ruling on a motion for summary 

judgment, we preface our discussion of the facts and issues with a review 

of the principles governing our examination of the district court’s ruling. 

“ ‘To obtain a grant of summary judgment on some issue in an action, 

the moving party must affirmatively establish the existence of 

undisputed facts entitling that party to a particular result under 

controlling law.’ ” Baker v. City of Iowa City, 750 N.W.2d 93, 97 (Iowa 

2008) (quoting Interstate Power Co. v. Ins. Co. of N. Am., 603 N.W.2d 751, 

756 (Iowa 1999)); see Iowa R. Civ. P. 1.981(3) (authorizing summary 

judgment when “there is no genuine issue as to any material fact” and 

“the moving party is entitled to a judgment as a matter of law”). Neither 

party points to any issue of material fact with respect to the application

of section 477A.7(5). Thus, the disposition of this case rests on a 

determination whether the city is entitled to judgment as a matter of law 

under the undisputed facts.

Whether the city is entitled to judgment as a matter of law turns 

on whether section 477A.7(5), which ratifies fees imposed and collected 

prior to its enactment, is a proper and constitutional exercise of 
3

legislative power. The plaintiff does not dispute that the legislature’s 

intent in enacting this provision was to retroactively authorize illegal 

franchise fees already assessed by municipalities and paid by their 

residents. Rather, he claims the legislature’s action violates his due 

process rights. We consider the plaintiff’s constitutional claim de novo. 

Varnum v. Brien, 763 N.W.2d 862, 874 (Iowa 2009). 

II. Background Facts and Proceedings.

The plaintiff, Thomas Zaber, sued the City of Dubuque on 

September 5, 2006, claiming the city had collected an illegal tax from 

him and others similarly situated in the form of franchise fees for gas 

and electric utilities and for cable television services in excess of the 

reasonable cost of regulating these industries.1 Zaber sought a refund of 

the illegal taxes based on this court’s decision in Kragnes v. City of 

Des Moines, 714 N.W.2d 632 (Iowa 2006). In that case, we held franchise 

fees assessed by the City of Des Moines on gas and electric power 

services constituted an illegal tax to the extent such fees exceeded the 

reasonable costs of regulating the franchised activity. Kragnes, 714 

N.W.2d at 642–43.

The City of Dubuque filed a motion for partial summary judgment, 

requesting dismissal of the plaintiff’s claim for the refund of franchise 

fees paid for cable television services. This motion rested on the General 

Assembly’s enactment of Iowa Code section 477A.7, which authorized 

franchise fees on cable television services in excess of the cost of 

regulation, including fees “assessed by and paid to a municipality prior 

to May 29, 2007[, the effective date of the act].” Iowa Code § 477A.7(4), 

 1This case was certified as a class action pursuant to Iowa Rule of Civil 

Procedure 1.262(1). Nonetheless, we will refer to the plaintiff in his individual capacity 

for the sake of simplicity. 
4

(5); see 2007 Iowa Acts ch. 201, § 15 (providing the act, “being deemed of 

immediate importance, takes effect upon enactment,” May 29, 2007). 

The plaintiff resisted this motion on the ground the retroactive aspect of 

the statute violated his due process rights in two ways: (1) it deprived 

the plaintiff of an accrued refund claim, and (2) the period of retroactivity 

exceeded the “modest” period constitutionally permitted.

The district court granted the city’s motion for partial summary 

judgment on the plaintiff’s refund claim for cable television fees. It 

concluded the retroactive provision in the statute was curative legislation 

that bore a rational relationship to a legitimate governmental purpose,

namely, preserving “the revenue cities need to carry out their lawful 

functions.” The district court rejected the plaintiff’s due process 

challenge, ruling retroactive authorization of taxes already collected or 

assessed was constitutionally permissible and “need not be limited to one 

year or the previous legislative session,” as the plaintiff contended. 

The plaintiff filed an application for interlocutory appeal, which 

this court granted.2 On appeal, the plaintiff claims the legislature’s 

retroactive authorization of franchise fees in excess of the cost of 

regulation violates his rights to substantive due process for two reasons. 

First, it takes away his accrued right to a refund of illegal taxes assessed 

and collected by the city. Second, the period of retroactivity exceeds the 

modest period that is constitutionally allowed. To put these issues in 

context, we first review the events leading up to the enactment of section 

477A.7(5).

 2This case was consolidated for appeal with Curtis v. City of Bettendorf, No. 07–

1856; Kleiman v. City of Waterloo, No. 07-1855; and Lindstrom v. City of Des Moines, No. 

07–1641. The clerk docketed the combined appeal under No. 07–1641. We have issued

separate opinions in these cases.
5

III. Enactment of Iowa Code Section 477A.7(5).

As noted above, in Kragnes, this court examined a municipality’s 

power to charge fees for gas and electric services in excess of the cost of 

regulating those activities. 714 N.W.2d at 637–43. We held: 

Our decisions reveal that even after the adoption of the 

home-rule amendment and the enactment of the Home Rule 

for Cities bill, we have continued to adhere to the position 

that a fee imposed by a city needs to be related to the 

reasonable costs of inspecting, licensing, supervising, or 

otherwise regulating the activity in order to be permitted 

under a city's home-rule authority. If a fee charged by a city 

exceeds the amount necessary to inspect, license, supervise, 

or otherwise regulate the activity, it is nothing more than a 

tax levy, which the legislature has strictly prohibited.

Id. at 641. We concluded that, to the extent the franchise fees charged 

by the defendant city exceeded its cost of regulation, the fees constituted 

an illegal tax. Id. at 642–43. In the wake of this decision, several 

lawsuits, including the present case, were filed by residents of various 

Iowa cities, claiming a five percent franchise fee for cable television 

services charged by the defendant cities was an illegal tax and should be 

refunded. See Lindstrom v. City of Des Moines, 470 F. Supp. 2d 1002, 

1004–05 (S.D. Iowa 2007).3

While these actions were pending, the Iowa General Assembly 

enacted a law relating to franchise fees for cable television services. See

2007 Iowa Acts ch. 201. The following provisions of this act are 

pertinent to our discussion: 

4. A franchise fee may be assessed or imposed by a 

municipality without regard to the municipality’s cost of 

inspecting, supervising, or otherwise regulating the 

franchise, and the fees collected may be credited to the 

 3Seven cases filed in state court seeking refunds of illegal “franchise fees” were 

removed to federal court, where they were consolidated. See Lindstrom, 470 

F. Supp. 2d at 1004 n.1. Eventually, all seven cases, including the present case, were

remanded back to state court for lack of federal court jurisdiction. Id. at 1013.
6

municipality’s general fund and used for municipal general 

fund purposes.

5. To the extent that any amount of franchise fees

assessed by and paid to a municipality prior to the effective 

date of this Act, pursuant to a franchise agreement between 

a municipality and any person to erect, maintain, and 

operate plants and systems for cable television, exceeds the 

municipality’s reasonable costs of inspecting, supervising or 

otherwise regulating the franchise, such amount is deemed 

and declared to be authorized and legally assessed by and 

paid to the municipality. 

Id. ch. 201, § 8(4), (5) (emphasis added) (codified at Iowa Code 

§ 477A.7(4), (5)). It is clear from the timing of the enactment and the 

language used in the statute that the legislature intended section 

477A.7(5) to validate any municipality’s collection of fees on cable 

television services in excess of the reasonable costs of inspecting, 

supervising, or otherwise regulating the franchise, regardless of when the 

fees were assessed and paid. 

The district court relied on the legislature’s authorization of past 

fees in subsection (5) in granting the city’s motion for partial summary 

judgment. It is the constitutionality of this retroactivity provision that 

lies at the heart of this appeal.

IV. Nature of Issue Presented. 

Before we address the constitutionality of section 477A.7(5), we 

emphasize the issue presented involves taxes that were not authorized at 

the time they were exacted by the municipalities,4 but which could have 

been authorized by the state. See Iowa Const. art. III, § 38A (“Municipal 

corporations are granted home rule power and authority . . . except that 

they shall not have power to levy any tax unless expressly authorized by 

 4As this case is before the court on interlocutory appeal, there has yet to be a 

final determination on the validity of the franchise fees assessed and collected by the 

municipality. For purposes of our review of the city’s motion for partial summary 

judgment, however, we assume the five percent franchise fee exceeded the cost of 

regulation and so, as to such excess, was not authorized.
7

the general assembly.” (Emphasis added.)). Therefore, we are not faced 

with a situation in which the legislature attempted to ratify or cure a tax 

that it lacked the underlying power to authorize. As we held in Kragnes, 

the defect in the city’s imposition of a tax on cable television services was 

simply its lack of legislative authority to do so. See Kragnes, 714 N.W.2d 

at 641 (declaring similar charge on gas and electric services to be an 

unauthorized and illegal tax). Consequently, this case involves not the 

collection of taxes that government for constitutional reasons lacks the 

power to impose in some or all instances, but instead involves local taxes 

that the state has the power to authorize. In other words, this case and 

others like it do not involve battles between taxpayers and municipalities 

regarding the inherent power of government to tax. Instead, the real

conflict in this case is between the city and state government as reflected 

in legislation regarding the authority of municipalities to impose certain 

fees. 

In the end, the fundamental issue presented is whether the state 

as principal could exercise its power to ratify the unauthorized, but 

otherwise constitutional, acts of its political subdivisions. We turn now 

to a review of the principles that control our resolution of this issue. 

V. General Principles Governing Substantive Due Process 

Claims. 

To the extent that legislation is made retroactive, it is not 

inherently unconstitutional. As this court has noted with respect to 

retroactive laws in general, “ ‘In the absence of an express constitutional 

inhibition retrospective laws are not prohibited as such.’ ” State ex rel. 

Turner v. Limbrecht, 246 N.W.2d 330, 334 (Iowa 1976) (quoting 73 

Am. Jur. 2d Statutes § 347, at 485–86), overruled on other grounds by 

State ex rel. Miller v. Hydro Mag, Ltd., 436 N.W.2d 617, 622 (Iowa 1989); 
8

accord 2 Norman J. Singer & J.D. Shambie Singer, Statutes and 

Statutory Construction § 41:3, at 398 (7th ed. 2009) [hereinafter Singer on 

Statutory Construction] (“The fact that a statute is retroactive is not 

sufficient by itself to invalidate it.”). The “express constitutional 

inhibition” claimed by the plaintiff in this case is the Due Process Clause. 

The plaintiff asserts the Due Process Clause is violated because the 

legislature’s ratification of the franchise fee deprives cable subscribers of 

a vested right to a refund of the illegally imposed fees, and the five-andone-half-year period of retroactivity exceeds that which is constitutionally 

permitted.5 These arguments implicate substantive due process.6 See 

State ex rel. Miller v. Smokers Warehouse Corp., 737 N.W.2d 107, 111 

(Iowa 2007) (concluding defendants asserted substantive due process 

claim because “they do not discuss any notice or hearing deficiencies”).

Generally speaking, “[s]ubstantive due process principles preclude 

the government ‘from engaging in conduct that “shocks the conscience,” 

or interferes with rights “implicit in the concept of ordered liberty.” ’ ” 

Atwood v. Vilsack, 725 N.W.2d 641, 647 (Iowa 2006) (considering state 

due process claim) (quoting United States v. Salerno, 481 U.S. 739, 746, 

107 S. Ct. 2095, 2101, 95 L. Ed. 2d 697, 708 (1987)); see also 

Blumenthal Inv. Trusts v. City of W. Des Moines, 636 N.W.2d 255, 265

(Iowa 2001) (noting it “is not easy to prove” a substantive due process 

 5The parties agree the plaintiff’s refund claims are governed by a five-year

statute of limitations. See Iowa Code § 614.1(4) (2005).

6The plaintiff relies on both the Federal Constitution and our state constitution. 

See U.S. Const. amend. V; Iowa Const. art. I, § 9. The plaintiff does not suggest we 

should employ a different standard under the Iowa Constitution than we use for its

federal counterpart. Although we make no distinction in our discussion of the plaintiff’s 

due process argument between the state and federal constitutional claims, we preserve 

our exclusive prerogative to determine the constitutionality of an Iowa statute 

challenged under the Iowa Constitution. Callender v. Skiles, 591 N.W.2d 182, 187 

(Iowa 1999). 
9

violation because “ ‘substantive due process is reserved for the most 

egregious governmental abuses against liberty or property rights’ ”

(quoting Rivkin v. Dover Twp. Rent Leveling Bd., 671 A.2d 567, 574–75 

(N.J. 1996))). 

A substantive due process analysis begins with an 

identification of the nature of the right at issue, as that 

determines the test to be applied. . . . When . . . a 

fundamental right is not involved, the Due Process Clause 

“demands no more than a ‘reasonable fit’ between 

government[al] purpose . . . and the means chosen to 

advance that purpose.”

Smokers Warehouse Corp., 737 N.W.2d at 111 (citation omitted) (quoting 

Reno v. Flores, 507 U.S. 292, 305, 113 S. Ct. 1439, 1448–49, 123 

L. Ed. 2d 1, 18 (1993)).

As noted earlier, the plaintiff claims he was deprived of his right to 

a refund of fees imposed in excess of the city’s authority. The plaintiff’s 

right to a refund is not a fundamental right, and therefore, there need 

only be a “reasonable fit” between the legislature’s purpose in ratifying 

the past imposition of franchise fees and the means chosen to advance 

that purpose. See Home Builders Ass’n of Greater Des Moines v. City of 

W. Des Moines, 644 N.W.2d 339, 353 (Iowa 2002) (holding imposition of 

unauthorized fee did not infringe on a fundamental right, so rationalbasis test applied). Additionally, we must presume the 2007 enactment 

is constitutional. Smokers Warehouse Corp., 737 N.W.2d at 111. This 

deferential standard is particularly appropriate when we consider the 

constitutionality of economic legislation. Fed. Land Bank of Omaha v. 

Arnold, 426 N.W.2d 153, 156 (Iowa 1988). Moreover, the “strong 

deference” accorded economic legislation “is no less applicable when that 

legislation is applied retroactively.” Pension Benefit Guar. Corp. v. R.A. 

Gray & Co., 467 U.S. 717, 729, 104 S. Ct. 2709, 2717, 81 L. Ed. 2d 601, 
10

611 (1984), superseded by statute on other grounds as stated in Orrego v. 

833 W. Buena Joint Venture, 943 F.2d 730, 735 n.7 (7th Cir. 1991). It is 

the plaintiff’s burden to prove the legislature’s act is unconstitutional by 

negating “ ‘every reasonable basis upon which the [act] may be 

sustained.’ ” Exira Cmty. Sch. Dist. v. State, 512 N.W.2d 787, 793 (Iowa 

1994) (quoting Kent v. Polk County Bd. of Supervisors, 391 N.W.2d 220, 

225 (Iowa 1986)).

VI. Classification of Legislation as Curative. 

As noted above, the district court decided section 477A.7(5) was a 

curative act that could constitutionally be applied retroactively. The 

plaintiff claims this preliminary determination by the district court was 

wrong, leading the court to the erroneous conclusion that the statute 

could be applied retroactively to extinguish his claim to a refund. We 

think the district court correctly classified the provision at issue as a 

curative act.

One type of curative act is a statute passed “to validate legal 

proceedings” or “acts of public . . . administrative authorities.” Singer on 

Statutory Construction § 41:11, at 503. In line with this general principle, 

our court has long recognized the legislature’s power to cure defects in 

acts by local government that are undertaken without authority or 

without compliance with the requirements for exercising authority. See,

e.g., Schwarzkopf v. Sac County Bd. of Supervisors, 341 N.W.2d 1, 4–5, 8

(Iowa 1983); City of Muscatine v. Waters, 251 N.W.2d 544, 548–50 (Iowa 

1977), superseded by statute on other grounds as stated in City of 

Des Moines v. City Dev. Bd., 473 N.W.2d 197, 199 (Iowa 1991); Cook v. 

Hannah, 230 Iowa 249, 253–59, 261, 297 N.W. 262, 264–67, 269, cert. 

denied, 314 U.S. 691 (1941); Chicago, R.I. & P. Ry. v. Rosenbaum, 212 

Iowa 227, 229–34, 238, 231 N.W. 646, 647–49, 651 (1930); Windsor v. 
11

City of Des Moines, 110 Iowa 175, 179–80, 81 N.W. 476, 477 (1900);

Chicago, R.I. & P. Ry. v. Indep. Dist. of Avoca, 99 Iowa 556, 561–62, 68 

N.W. 881, 882 (1896); The Iowa R.R. Land Co. v. Soper, 39 Iowa 112, 

116–24 (1874); Boardman v. Beckwith, 18 Iowa 292, 294–95 (1865). 

Although the plaintiff contends the legislature can only validate a 

defective exercise of power and cannot supply authority that did not exist 

at the time it was exercised, he is mistaken. 

One of our earliest cases dealing with curative tax legislation is 

Boardman v. Beckwith, 18 Iowa 292 (1865). In Boardman, the legislature 

repealed the provisions of a law that allowed a county to levy and assess 

property taxes for the year of 1858. 18 Iowa at 293–94. During the next 

legislative session in 1860, the legislature passed a law to enforce 

delinquent taxes from 1858 that the county assessed and levied in 1858. 

Id. at 294. This court held the 1860 law was a curative act legalizing the 

taxes assessed and levied by the county in 1858. Id. at 294–95.

Another decision dealing with the same issue is The Iowa Railroad

Land Co. v. Soper, 39 Iowa 112 (1874). In 1873 our court held a tax 

levied by Sac County for the purpose of paying a judgment rendered 

against the county was illegal. Soper, 39 Iowa at 114. Shortly after this 

decision, the legislature passed a bill legalizing the judgment taxes levied 

by the county in 1873. Id. at 114–15. A taxpayer challenged the tax, 

claiming the legislature did not have the authority to legalize the 

judgment tax. Id. at 118. In response to the taxpayer’s claim, we stated:

[T]he General Assembly possesses the power to cure and 

render legal and valid, by subsequent laws, defective or 

irregular proceedings, wherever it would have the power to 

authorize such proceedings in the first instance. Since, 

therefore, it is within the proper scope of legislative authority 

to pass general laws for the assessment and collection of 

taxes, the passage of a general law curing and legalizing the 

levy and collection of taxes irregularly or illegally levied, is 
12

also an exercise of legislative authority as essentially as is 

the passage of an original act authorizing the taxation.

Id. at 124. In reaching this conclusion, our court did not make a 

distinction between legislation that attempts to cure the acts of officers 

void for informality or mistake and legislation that seeks to legalize 

official acts void for want of authority. Such a distinction is not 

recognized in this state. Id. 

In cases decided after Soper, we have continued to uphold curative 

acts ratifying taxes that had been imposed without authority. E.g., Cook, 

230 Iowa at 261, 297 N.W. at 269; Rosenbaum, 212 Iowa at 238, 231 

N.W. at 651. Therefore, under Iowa law, so long as the legislature had 

the power to confer authority on the local public body to so act, it has the 

power to cure or ratify the local body’s act exercised without the requisite 

authority.7 See Singer on Statutory Construction § 41:11, at 504 (stating 

“a curative act may validate any past action which the legislature might 

have authorized beforehand”); id. § 41:15, at 514 (stating “legislative and 

administrative actions of . . . cities . . . may be validated by properly 

enacted curative statutes”).

The present case clearly falls within this well-settled law. Under 

the Iowa Constitution, “[m]unicipal corporations are granted home rule 

power and authority . . . except that they shall not have power to levy 

any tax unless expressly authorized by the general assembly.” Iowa 

Const. art. III, § 38A (emphasis added). Here, the local body––the City of 

Dubuque––imposed a tax on cable television services that it had no 

 7The legislative act considered in City of Modesto v. National Med, Inc., 27 Cal. 

Rptr. 3d 215 (Ct. App. 2005), can be helpfully contrasted. In that case the court held a 

municipal tax that violated due process and equal protection concepts in the state 

constitution could not be cured. City of Modesto, 27 Cal. Rptr. 3d at 223. This tax is 

an example of one that the government had no power to impose under any 

circumstances because its flaw was its discriminatory effect, not a simple absence of 

taxing authority by the taxing body.
13

authority to impose. See Kragnes, 714 N.W.2d at 641, 643 (declaring 

similar charge to be an unauthorized and illegal tax). In the next 

legislative session, the legislature cured the lack of authority to collect 

such a tax by enacting section 477A.7(5) and by ratifying the taxes that 

had been previously assessed and paid. Because the legislature had the 

power to authorize this tax prior to May 29, 2007, it also had the power

to validate unauthorized taxes imposed prior to this date. Therefore, 

section 477A.7(5) is properly classified as a curative act. See State ex rel. 

Van Emmerik v. Janklow, 304 N.W.2d 700, 703 (S.D. 1981) (holding 

legislative act ratifying unauthorized collection of tax overcharge was a 

curative act). 

VII. Distinction Between Ratification of Past Tax and 

Retroactive Imposition of New Tax. 

Before we discuss whether section 477A.7(5) violates principles of 

substantive due process, it is helpful to understand the distinction 

between legislative ratification of a tax that has been previously assessed

and collected, i.e., curative legislation, and legislation that imposes a new 

tax or liability on past transactions. The plaintiff relies on cases in the 

latter category, which involve fundamentally different considerations 

than those applicable to curative acts, as we will explain in more detail 

later in our opinion. 

The plaintiff claims the “leading modern case on a due process 

challenge to retroactive tax legislation” is United States v. Carlton, 512 

U.S. 26, 114 S. Ct. 2018, 129 L. Ed. 2d 22 (1994). While that statement 

may be true, it is also true that the legislation at issue in the case before 

us is not a retroactive tax statute like the one considered in Carlton. The 

Iowa legislature did not impose a tax on cable television services; it 

ratified a tax that cities had previously assessed. A tax statute imposing 
14

a new tax, such as the one in Carlton, is fundamentally different than 

curative legislation ratifying or authorizing a tax that has already been 

imposed and collected, both in purpose and in its impact on taxpayers.8 

To demonstrate this distinction, we begin with an examination of the 

Carlton decision.

The taxpayer’s claim in Carlton was based on changes made by 

Congress to the federal estate tax statute. 512 U.S. at 27, 114 S. Ct. at 

2020, 129 L. Ed. 2d at 26. In 1986, Congress adopted an estate tax 

deduction for the proceeds of sales of stock to employee stock-ownership 

plans. Id. In 1987, Congress amended this deduction to close a 

loophole, limiting its availability to decedents who directly owned the 

securities that were sold immediately before death. Id. at 29, 114 S. Ct. 

at 2021, 129 L. Ed. 2d at 27. Congress made this amendment 

retroactive, as if the limitation had been included in the original 1986 

 8Notwithstanding the distinctions between curative legislation and retroactive 

tax legislation, the test applied to retroactive tax legislation is the same as that applied 

to curative legislation, i.e., the test “generally applicable to retroactive economic 

legislation”: 

The due process standard to be applied to tax statutes with retroactive 

effect, therefore, is the same as that generally applicable to retroactive 

economic legislation: 

“Provided that the retroactive application of a statute is supported 

by a legitimate legislative purpose furthered by a rational means, 

judgments about the wisdom of such legislation remain within the 

exclusive province of the legislative and executive branches. . . .

“To be sure, . . . retroactive legislation does have to meet a burden 

not faced by legislation that has only future effects. . . . ‘The retroactive 

aspects of legislation, as well as the prospective aspects, must meet the 

test of due process, and the justifications for the latter may not suffice 

for the former’ . . . . But that burden is met simply by showing that the 

retroactive application of the legislation is itself justified by a rational 

legislative purpose.” 

Carlton, 512 U.S. at 30–31, 114 S. Ct. at 2022, 129 L. Ed. 2d at 28 (emphasis added) 

(quoting Pension Benefit Guar. Corp., 467 U.S. at 729–30, 104 S. Ct. at 2717–18, 81 

L. Ed. 2d at 611). 
15

provision. Id. The impact of this law was that past transactions were 

now subjected to a greater tax than they were at the time the 

transactions occurred. In determining whether the retroactive aspect of 

the 1987 estate tax amendment met the requirements of due process, the 

Carlton Court noted the purpose of Congress was reasonable––to avoid “a 

significant and unanticipated revenue loss . . . by denying the deduction 

to those who had made purely tax-motivated stock transfers”––and the 

one-year period of retroactivity was “modest.” Id. at 32, 114 S. Ct. at 

2023, 129 L. Ed. 2d at 29. The Court concluded the retroactive 

application of the tax statute was “rationally related to a legitimate 

legislative purpose” and, therefore, was “consistent with the Due Process 

Clause.” Id. at 35, 114 S. Ct. at 2024, 129 L. Ed. 2d at 31. 

Contrary to the plaintiff’s assertion in his brief, the statute 

considered in Carlton was not a curative act. The plaintiff cites to the 

Court’s statement that the statute challenged in that case “was adopted 

as a curative measure.” Id. at 31, 114 S. Ct. at 2022, 129 L. Ed. 2d at 

28. It would be inaccurate to construe this comment as an indication 

that the tax statute considered in Carlton was considered a “curative act” 

as that term is specially defined under the law. In concluding its 

discussion of the nature of the statute at issue in Carlton, the Court

observed that “Congress acted to correct what it reasonably viewed as a 

mistake in the original 1986 provision that would have created a 

significant and unanticipated revenue loss.” Id. at 31–32, 114 S. Ct. at 

2022–23, 129 L. Ed. 2d at 29. Justice O’Connor, in her concurring 

opinion, noted the majority’s discussion of Congress’s “subjective 

motivation,” and observed: 

Every law touching on an area in which Congress has 

previously legislated can be said to serve the legislative 

purpose of fixing a perceived problem with the prior state of 
16

affairs––there is no reason to pass a new law, after all, if the 

legislators are satisfied with the old one.

Id. at 36, 114 S. Ct. at 2025, 129 L. Ed. 2d at 32 (O’Connor, J., 

concurring). Thus, the comment in Carlton with respect to the curative 

nature of the statute was really a reference to Congress’s purpose in 

enacting the statute––the correction of an unanticipated problem in the 

original legislation, not whether the statute was classified as a curative 

act for purposes of retroactivity analysis. See Mont. Rail Link, Inc. v. 

United States, 873 F. Supp. 1415, 1421 (D. Mont. 1994) (stating, in 

reference to this discussion in Carlton, “the real issue identified by the 

Court and addressed in that discussion is whether the retroactive effect 

is supported by a legitimate purpose and furthered by rational means”), 

aff’d, 76 F.3d 991 (9th Cir. 1996). 

A review of legal authorities considering when an act is curative 

confirms the conclusion that the tax statute at issue in Carlton was not a 

curative act. The question of when an act is “curative” for purposes of 

retroactivity analysis is addressed in Singers’ noted treatise on statutes 

and statutory construction, which states in its discussion of retroactivity:

A curative act is a statute passed to cure defects in 

prior law, or to validate legal proceedings, instruments, or 

acts of public or private administrative authorities. In the 

absence of such an act the statute would be void for want of 

conformity with existing legal requirements. 

Singer on Statutory Construction § 41:11, at 503 (emphasis added); accord 

Schwarzkopf, 341 N.W.2d at 4; Waters, 251 N.W.2d at 548. In Carlton, 

there was no defect in the original statute that would render it void. 

Congress simply realized in retrospect that the deduction it enacted in 

1986 was too broad. 

Our court recently recognized such a distinction––between the 

purpose of a legislative act and its classification for purposes of 
17

considering its retroactivity––in Anderson Financial Services, LLC v. 

Miller, 769 N.W.2d 575 (Iowa 2009). In Anderson Financial, the attorney 

general claimed an amendment to a credit statute was remedial in nature 

and, therefore, applied retroactively under the presumption that remedial 

statutes are presumed to have retrospective operation. 769 N.W.2d at 

579–80. We rejected this argument, stating: 

While the purpose of the law may be characterized as an 

effort to “remedy” an unintended gap in the statutory 

prohibition of usurious interest rates, the statute is not 

remedial in the sense contemplated by the rule that remedial 

statutes are presumed to apply retroactively. . . .

. . . . 

. . . It would not be an exaggeration to suggest that the 

legislature nearly always has in mind some problem that it 

seeks to address in a legislative enactment. So, if a mere 

legislative purpose to remedy a perceived defect in the law 

made a statute remedial, very few statutes would not fall 

within this classification.

Id. at 580 & n.4. 

The same distinction is appropriate when considering the 

applicability of Carlton and similar cases cited by the plaintiff. Clearly, 

Congress’s purpose in enacting the 1987 amendment to the estate tax 

deduction at issue in Carlton was to remedy a perceived defect in the 

breadth of the deduction, but that is not the type of defect that is 

contemplated in classifying legislation as “curative” for purposes of 

retroactivity analysis. The type of defect addressed by a curative act, as 

defined for purposes of retroactivity analysis, is a failure of the prior 

legislation to conform to existing legal requirements. That was not the 

type of legislation involved in Carlton. In Carlton, Congress changed the 

law that applied to past transactions; it did not ratify a law that had 

already been applied to transactions when they occurred, as is the case 
18

here. Thus, the amendment at issue in Carlton was not a “curative” act, 

as that term of art is used in the context of retroactivity. 

In summary, Carlton and like cases cited by the plaintiff address 

the retroactivity of a new tax––one that is being assessed and collected 

after enactment of the new statute, i.e., the tax is imposed after the event 

being taxed has occurred.9 That is not what we have in the present case. 

Here the legislature did not enact a new tax; it ratified a prior tax that 

had been assessed and collected for many years before the legislature’s 

authorization of the tax. This distinction is one that makes a difference in 

retroactivity analysis. As our later discussion will illustrate, the purpose 

of curative, ratifying legislation is sufficient to justify longer periods of 

retroactivity in contrast to the so-called modest period of retroactivity 

accorded the imposition of a new tax.

VIII. Application of Substantive Due Process Test.

We turn now to the application of the substantive due process test 

identified earlier in our opinion. As we have observed, due process 

 9The cases cited by the plaintiff in support of his position, including the Iowa 

cases, involve tax statutes (statutes imposing a new tax), not curative acts (acts 

authorizing a previously imposed tax). See, e.g., United States v. Hemme, 476 U.S. 558, 

106 S. Ct. 2071, 90 L. Ed. 2d 538 (1986) (considering application of law that 

established unified credit for lifetime and testamentary gifts to gifts made prior to 

enactment); United States v. Hudson, 299 U.S. 498, 57 S. Ct. 309, 81 L. Ed. 370 (1937) 

(considering application of tax on transfers of interest in silver bullion to transfers made 

before the adoption of the tax); Nichols v. Coolidge, 274 U.S. 531, 47 S. Ct. 710, 71 L. 

Ed. 1184 (1927) (considering imposition of an estate tax on transfers that predated 

imposition of tax); Shell Oil Co. v. Bair, 417 N.W.2d 425 (Iowa 1987) (considering 

application of statute disallowing a deduction to transaction occurring prior to adoption 

of statute, citing another tax statute case, Welch v. Henry, 305 U.S. 134, 59 S. Ct. 121, 

83 L. Ed. 87 (1938), which considered statute imposing an income tax on corporate 

dividends that had been received prior to adoption of tax); City Nat’l Bank of Clinton v. 

Iowa State Tax Comm’n, 251 Iowa 603, 102 N.W.2d 381 (1960) (considering application 

of tax law to transaction that occurred prior to enactment of law, citing Welch, 305 U.S. 

134, 59 S. Ct. 121, 83 L. Ed. 87). Therefore, these cases are distinguishable from the 

present case, just as Carlton is, because the purpose of the tax statute considered in 

these cases is not the same as the purpose of curative legislation, such as that at issue 

in the case before us.
19

requirements are satisfied “simply by showing that the retroactive 

application of the legislation is itself justified by a rational legislative 

purpose.” Pension Benefit Guar. Corp., 467 U.S. at 729, 104 S. Ct. at 

2718, 81 L. Ed. 2d at 611. Here, the legislature’s purpose in ratifying 

cities’ past imposition and collection of franchise fees in excess of their

regulatory costs was protection of the cities’ financial condition. The 

legislature wanted to ensure cities could retain the franchise fees/illegal 

taxes they had previously collected, thereby avoiding economic hardship 

to the cities, their taxpayers, and the public who rely on city services if 

the cities were required to refund these fees. Given that cities had used 

the fees they had already collected for public expenditures, the 

legislature acted to avoid a situation in which cities would have to refund 

monies they had already spent. 

This purpose––to protect the financial stability of local 

municipalities––is entirely consistent with “the positive policy . . . served 

by curative legislation, to sustain the reliability of official actions and 

secure expectations formed in reliance thereon.” Singer on Statutory 

Construction § 41:11, at 506; see also id. § 41:17, at 521 (noting curative 

legislation as to tax matters is necessary “in order to safeguard the 

public treasury against erosion of revenues”). As one court has noted in 

denying a refund to taxpayers who had paid unauthorized county fees, 

later validated by the legislature, “If there are ‘settled expectations’ in 

this case, they are the County’s, not the taxpayers.” King v. Campbell 

County, 217 S.W.3d 862, 870 (Ky. Ct. App. 2006), review denied, (Ky. 

2007). 

Having identified the purpose of this act––protection of the public 

fisc, we now must consider whether this purpose justifies the retroactive 

aspect of the legislation––ratification of past franchise fees. It is at this 
20

juncture that the distinction between tax statutes and curative acts 

becomes most important. Unlike the revenue-raising tax statutes at 

issue in Carlton and like cases, which were designed to ensure tax 

collections remained at the same level or increased in the future, the 

curative act at issue here was designed to avoid the refund of monies 

already collected and spent. We agree with the district court that these 

purposes (maintaining revenue at the same or a higher level and avoiding 

refunds of past receipts) are fundamentally different. One need only put 

oneself in the position of the city to appreciate the distinction between 

the retroactivity of tax statutes versus the retroactivity of curative 

legislation. It is one thing to learn you will not be getting a raise as large 

as you anticipated and will have to adjust future expenditures 

accordingly (similar to allowing tax statutes limited retroactivity resulting 

in decreased future revenues); it is quite another matter to learn that you 

will have to return a portion of the income you have already received and 

spent (similar to the situation of denying retroactive authorization of 

taxes already collected and spent by the city). Clearly, the latter 

situation provides a more compelling justification for retroactivity than 

does the former. 

Moreover, the fairness of retroactivity vis-à-vis the taxpayer is 

fundamentally different in these situations. In the context of retroactive 

tax legislation, the taxpayer has conducted himself in accordance with 

the laws in effect at the time of a particular transaction and then 

subsequently, due to the retroactivity of a new tax statute, is taxed on 

the past transaction. In contrast, when curative legislation is at issue, 

the taxpayer has entered into the transaction knowing the transaction is 

burdened with a particular fee or tax. Ratification of the tax or fee does 

not change the rules of the game after the taxpayer has placed his bet, as 
21

is the case with retroactive tax legislation. See Charles B. Hochman, The 

Supreme Court and the Constitutionality of Retroactive Legislation, 73 

Harv. L. Rev. 692, 704, 705–06 (1960) [hereinafter The Constitutionality 

of Retroactive Legislation] (noting “the interest in the retroactive curing of 

. . . a defect in the administration of government outweighs the 

individual’s interest in benefiting from the defect”); cf. Miller v. Johnson 

Controls, Inc., 296 S.W.3d 392, 401 (Ky. 2009) (allowing retroactive 

“clarification” of tax statute to conform to interpretation made by taxing 

authority, noting “the clear and lengthy notice, the lack of settled 

expectations and lack of detrimental reliance”), cert. denied, ___ U.S. ___

(2010).

The period of retroactivity justified by the purpose and effect of

these clearly different statutes has been recognized by courts and 

scholarly authors alike. In a Kentucky case, the court noted the 

situation in Carlton was “significantly different” from the facts presented 

in the Kentucky case in which the taxpayers sought refunds of fees the 

municipality had already collected. King, 217 S.W.3d at 870 (concluding 

nineteen-year period of retroactivity did not violate taxpayers’ due 

process rights). In his treatise, Singer also recognizes the singular 

nature of curative acts when he discusses the constitutionality of such 

legislation: “[T]he very reason for curative legislation is to fulfill and 

secure expectations rather than to frustrate and defeat them. The 

principles governing decisions about the validity of retroactive legislation 

do not work to render curative acts invalid.” Singer on Statutory 

Construction § 41:12, at 509 (emphasis added). Another author notes, 

“[c]ases involving the retroactive imposition of taxes must be treated 

separately” from curative statutes “which ratify prior official conduct of 

government officers who have acted without the requisite authority.” The 
22

Constitutionality of Retroactive Legislation, 73 Harv. L. Rev. at 704, 706. 

Thus, it is inaccurate to suggest curative statutes are subject to the same 

retroactivity concerns and limitations as tax statutes.

The justification for allowing curative acts to operate retroactively 

has been explained as follows: 

Non-substantive laws that operate retroactively help to 

rectify or prevent injustices that may have been caused by 

the previous law. For example, so-called “curative 

legislation” will be upheld when the legislation: (1) ratifies 

prior official conduct of government officials who acted 

without the requisite authority, or (2) retroactively cures 

defects in an administrative system. Retroactive curative 

rules are acceptable because of the strong public interest in 

a fair government system, and because they merely produce 

the same result that would have occurred had the lawmaker 

(usually an agency) promulgated the original rule correctly. 

Jan G. Laitos, Legislative Retroactivity, 52 Wash. U. J. Urb. & Contemp. 

L. 81, 95 (1997) (footnotes omitted); accord Stephen R. Munzer, A Theory 

of Retroactive Legislation, 61 Tex. L. Rev. 425, 470 (1982) (suggesting 

retroactivity of curative legislation is justifiable because “[i]t tends to 

confirm expectations and to protect those who rely on the underlying 

merits of a claim rather than those who grasp at legal technicalities”); 

Laura Ricciardi & Michael B.W. Sinclair, Retroactive Civil Legislation, 27 

U. Tol. L. Rev. 301, 338 (1996) (“Such curative legislation affirms as 

proper what everyone had taken to be the law anyway: it ‘restores a 

situation that was affirmatively anticipated and provided for.’ ”). Thus, 

“[w]here legislation is curative, retroactive application may be 

constitutional despite a long period of retroactivity.” Wiggins v. Comm’r 

of Internal Revenue, 904 F.2d 311, 316 (5th Cir. 1990).

The United States Supreme Court long ago recognized the very 

distinction we note. In United States v. Heinszen, 206 U.S. 370, 27 S. Ct. 

742, 51 L. Ed. 1098 (1907), the Court reversed a judgment refunding 
23

duties illegally collected on imports to the Philippine Islands under 

executive branch authority, relying on curative legislation passed by 

Congress. In 1898, the President imposed tariff duties on imports to the 

Philippine Islands. Heinszen, 206 U.S. at 378, 27 S. Ct. at 743, 51 

L. Ed. at 1100. In 1899, a treaty of peace was ratified, which had the 

effect of taking away the President’s power to impose these duties; yet the 

President continued the duties in force. Id. Three years later, in 1902, 

Congress expressly authorized the imposition of duties. Id. at 378, 27 

S. Ct. at 743, 51 L. Ed. at 1100–01. In 1905, the Supreme Court heard 

two appeals from parties who had been denied refunds of duties paid 

between 1899 and 1902, before the duties were authorized. Id. at 380–

82, 27 S. Ct. at 744–45, 51 L. Ed. at 1101–02. The Court reversed the 

judgments in favor of the government and held the President was without 

power to impose the duties after the treaty of peace was ratified in 1899. 

Id. Thereafter, in 1906, Congress passed an act legalizing and ratifying 

the collection of the unauthorized duties between 1899 and 1902. Id. 

A year later the Heinszen appeal reached the Court. The district 

court in Heinszen had held duties paid by the claimants between 1899 

and 1902 were illegal and had refused to give effect to the 1906 

ratification of the unauthorized duties. Id. at 382, 27 S. Ct. at 745, 51 

L. Ed. at 1102. The claimants asserted on appeal that application of the 

ratifying act would deprive them of their property without due process of 

law, arguing they had a vested right in the monies illegally exacted from 

them. Id. at 386, 27 S. Ct. at 746, 51 L. Ed. at 1104. The Supreme 

Court noted the general principle that Congress “had [the] power to ratify 

the acts which it might have authorized.” Id. at 384, 27 S. Ct. at 745, 51 

L. Ed. at 1103. Of particular significance to the present case is the 

Court’s refusal to consider the legalizing act as a taxing statute: 
24

As to [the claim] the duties collected were illegal, it is 

insisted that, for the purpose of testing the validity of the act 

of Congress, the fact of such collection must be put out of 

view, and the act ratifying the exaction must be treated as if 

it were solely an original exercise by Congress of the taxing 

power. This being done, it is said, reduces the case to the 

inquiry, had Congress power, years after goods which were 

entitled to free entry had been brought into the Philippine 

Islands, to retroactively impose tariff duties upon the 

consummated act of bringing the goods into that country? 

But the proposition begs the question for decision, by 

shutting out from view the potential fact that when the goods 

were brought into the Philippine Islands there was a tariff in 

existence under which duties were exacted in the name of 

the United States. . . . Moreover, the fallacy which the 

proposition involves becomes yet more obvious when it is 

observed that the contention cannot even be formulated 

without misstating the nature of the act of Congress; in other 

words, without treating that act as retrospective legislation 

enacting a tariff, when, on its very face, the act is but an 

exercise of the conceded power dependent upon the law of 

agency to ratify an act done on behalf of the United States, 

which the United States could have originally authorized. 

Id. at 385–86, 27 S. Ct. at 746, 51 L. Ed. at 1103–04. The Court went on 

to reject the claimants’ due process claim, noting any right to a refund 

held by the claimants “was subject to the exercise by Congress of its 

undoubted power to ratify.” Id. at 386, 27 S. Ct. at 746, 51 L. Ed. at 

1104. The Court stated the fact that the instant suit was pending at the 

time Congress ratified the illegal duties did not “cause the statute to be 

repugnant to the Constitution,” as “[t]he mere commencement of the suit 

did not change the nature of the right.” Id. at 387, 27 S. Ct. at 747, 51 

L. Ed. at 1104.

Heinszen was followed by the Court’s 1937 decision in Swayne & 

Hoyt, Ltd. v. United States, 300 U.S. 297, 57 S. Ct. 478, 81 L. Ed. 659 

(1937). In Swayne & Hoyt, steamship corporations challenged an order 

of the Secretary of Commerce canceling higher rates the corporations 

had been charging shippers through the Panama Canal. 300 U.S. at 

299–300, 57 S. Ct. at 478–79, 81 L. Ed. at 661–62. The corporations 
25

claimed, correctly, that the Secretary acted without authority, but the 

Court found Congress had subsequently validated the Secretary’s action 

through various legislative acts. Id. at 300–01, 57 S. Ct. at 479–80, 81 

L. Ed. at 662–63. As in Heinszen, the Court pointed out “a distinction 

must be taken ‘between a bare attempt of the Legislature retroactively to 

create liabilities for transactions . . . fully consummated in the past . . . 

and the case of a curative statute aptly designed to remedy mistakes and 

defects in the administration of government where the remedy can be 

applied without injustice.’ ” Id. at 302, 57 S. Ct. at 480, 81 L. Ed. at 663

(quoting Graham v. Goodcell, 282 U.S. 409, 429, 51 S. Ct. 186, 194, 75 

L. Ed. 415, 440 (1931)). The Court held “the retroactive application of 

the curative act impair[ed] no substantial right or equity of [the 

corporations]” and was not “unreasonable and arbitrary.” Id. at 302, 57 

S. Ct. at 480, 81 L. Ed. at 663–64. 

A review of the Van Emmerik case cited above is also helpful 

because it relies on Heinszen and has facts strikingly similar to the case 

before us. See Van Emmerik, 304 N.W.2d at 701–05, 707. In 

Van Emmerik, the state of South Dakota had collected a four percent 

sales tax on the sale of utility services beginning in 1969, even though 

the tax statute applicable to utilities imposed only a three percent tax. 

Id. at 701–02. In 1979, a class action seeking refunds of the one percent 

illegal tax was brought against the utilities and the state on behalf of all 

South Dakota residents who had paid the excessive sales taxes on their 

utility bills. Id. at 701. Thereafter, in 1981, the South Dakota legislature 

enacted a law imposing a four percent tax on utilities and making it 

retroactive to 1969. Id. at 702. The class action petitioner challenged 

the constitutionality of this legislation, claiming it constituted “a taking 
26

of property without just compensation in violation of the Due Process 

Clauses of the Fifth and Fourteenth Amendments.”10 Id. at 703. 

In addressing this claim, the South Dakota Supreme Court first 

noted that the act “purports to ratify the unauthorized collection by state 

officials of sales tax overcharges and to that extent, the law is a curative 

act.” Id. It rejected the petitioner’s argument that the utility customers 

had a right to a refund, stating: 

The unauthorized tax had been mistakenly collected without 

interruption since 1969 and petitioner presumably shared in 

whatever public benefits the tax funded. Where an asserted 

vested right that is not linked to any substantial equity 

arises from the mistake of officers purporting to administer 

the law in the name of the State, the Legislature is not 

prevented from curing the defect in administration simply 

because the effect may be to destroy claims that would 

otherwise exist. . . . Petitioner (having shared in the benefits 

 10At the time of this decision, the test of reasonableness for purposes of 

determining whether a taking had occurred was substantially the same as the test for a 

substantive due process claim. See Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 541–

42, 125 S. Ct. 2074, 2083, 161 L. Ed. 2d 876, 889–90 (2005) (discussing evolution of 

takings analysis, noting its “reliance on due process precedents”). This court has also 

equated the two tests. In Home Builders, this court considered a claim that an illegal 

tax in the form of a park dedication fee constituted a Fifth Amendment taking. Home 

Builders Ass’n, 644 N.W.2d at 351. We concluded it did not because “the fees were 

‘reasonably related to a substantial public purpose.’ ” Id. (quoting Swisher Int’l, Inc. v. 

United States, 178 F. Supp. 2d 1354, 1362 (Ct. Int’l Trade 2001), aff’d, Arbon Steel & 

Serv. Co. v. United States, 315 F.3d 1332 (Fed. Cir. 2003)). See generally Penn Cent. 

Transp. Co. v. City of New York, 438 U.S. 104, 127, 98 S. Ct. 2646, 2660, 57 L. Ed. 2d 

631, 650 (noting “a use restriction on real property may constitute a ‘taking’ if not 

reasonably necessary to the effectuation of a substantial public purpose”), reh’g denied, 

439 U.S. 883, 99 S. Ct. 226, 58 L. Ed. 2d 198 (1978), modification recognized by Palm 

Beach Isles Assocs. v. United States, 231 F.3d 1354 (Fed. Cir. 2000). In considering the 

plaintiff’s substantive due process claim, we noted there must merely be “ ‘ a 

“reasonable fit” between governmental purpose . . . and the means chosen to advance 

that purpose.’ ” Home Builders Ass’n, 644 N.W.2d at 353 (quoting ACCO Unlimited 

Corp. v. City of Johnston, 611 N.W.2d 506, 510 (Iowa 2000)). We concluded this test 

was met, stating, “[w]e have already determined in connection with our takings analysis 

that the parks fee is reasonably related to the City’s goal of establishing neighborhood 

parks. This conclusion also disposes of the plaintiff’s substantive due process claim.” 

Id. at 354. Thus, even though Van Emmerik involved a takings claim, the court applied 

substantially the same test we must employ in the present case for substantive due 

process. 
27

funded by the tax) effectively seeks a windfall in claiming 

that a vested right has arisen here since, had the official 

action in question had the effect it was intended to and could 

have had, no such right would have arisen.

Id. at 705; cf. Johnson Controls, 296 S.W.3d at 397 (holding taxpayers 

had no “vested right in the Kentucky Revenue Code”). The court also 

held the petitioner’s claim that the law “is invalid due to its eleven and 

one-half year period of retroactivity . . . lack[ed] merit.” Van Emmerik, 

304 N.W.2d at 706. The court noted the temporal element of 

retroactivity is relevant to the fairness of applying the legislation 

retroactively. Id. (“The obvious reason for this concern is rooted in the 

principle that a person should be able to plan his conduct with 

reasonable certainty of the legal consequences.”). Although this 

consideration is “[a]n important element” in cases involving “retroactive 

taxation,” the court noted, this principle of fairness was “not threatened 

here.” Id. Accordingly, the court gave full effect to the legislature’s 

ratification of eleven and one-half years of unauthorized taxation. Id. 

The petitioner’s subsequent appeal to the United States Supreme Court 

was dismissed “for want of a substantial federal question.” Van Emmerik 

v. Janklow, 454 U.S. 1131, 102 S. Ct. 986, 71 L. Ed. 2d 285 (1982).

A more recent decision of the United States Court of Appeals for 

the District of Columbia Circuit is also factually on point. See Thomas v. 

Network Solutions, Inc., 176 F.3d 500 (D.C. Cir. 1999), cert. denied, 528 

U.S. 1115 (2000). In this case, the National Science Foundation (NFS), 

an agency of the federal government, contracted with Network Solutions, 

Inc., a private corporation, to provide domain registration services for the 

Internet. Id. at 504. Pursuant to the contract, Network Solutions 

charged domain name registrants a yearly registration fee, with seventy 

percent of the fees kept by Network Solutions and the remaining thirty 
28

percent deposited in an account on NFS’s behalf “for preserving and 

enhancing the ‘Intellectual Infrastructure of the Internet.’ ” Id. at 505. 

Plaintiffs, registrants who paid the annual registration fees, brought suit, 

seeking refunds of the so-called preservation assessment. Id. The 

district court held the preservation assessment “was an above-cost tax 

Congress had not authorized and hence was unconstitutional.” Id. 

Congress immediately enacted a law that “legalized and ratified” the 

preservation assessment that had been illegally collected for over two 

years. Id. The district court then dismissed the plaintiffs’ claims as 

moot. Id. at 506.

On appeal, the court of appeals considered the effect of 

Congressional ratification of the illegal tax. Id. Quoting Heinszen, it 

noted “that Congress ‘has the power to ratify the acts which it might 

have authorized’ in the first place, so long as the ratification ‘does not 

interfere with intervening rights.’ ” Id. (quoting Heinszen, 206 U.S. at 

384, 27 S. Ct. at 745–46, 51 L. Ed. at 1103). The court affirmed the 

district court’s denial of the plaintiffs’ claim. Id. at 512.

An analogous case involving an act characterized as clarifying prior 

law is also enlightening. In Robert Morris College v. United States, 11 Cl. 

Ct. 546, 547 (Cl. Ct. 1987), a taxpayer sought a refund of FICA taxes 

paid for the years 1979–1983. These taxes were calculated pursuant to a 

1965 revenue ruling issued by the Department of Treasury interpreting 

the governing statute. Robert Morris Coll., 11 Cl. Ct. at 547. The 

taxpayer claimed the Department’s interpretation was inconsistent with a 

decision of the United States Supreme Court, Rowan Cos. v. United 

States, 452 U.S. 247, 101 S. Ct. 2288, 68 L. Ed. 2d 814 (1981), and 

therefore, it was entitled to a refund of the erroneously paid taxes. Id. at 

547–48. In 1983, Congress, concerned about the impact of Rowan on 
29

taxes already collected, passed a law that in effect amended the 

governing statute to make it consistent with the revenue ruling. Id. at 

549, 551. In 1984, Congress made the 1983 statute effective for years 

prior to 1983 “to preclude the possibility of refunds of FICA taxes paid in 

conformity with [the revenue ruling].” Id. at 551.

The taxpayer challenged the retroactive application of the new law, 

claiming it deprived the taxpayer “of its right to recover an overpayment.” 

Id. at 553. The taxpayer also claimed “that since the 1984 Act covers 

retroactively such a long period of time, it violates due process.” Id. The 

court rejected this claim, stating: 

Plaintiff was not deprived of any amounts to which it was 

entitled, nor did the legislation change its status by requiring 

plaintiff to pay additional amounts. Instead, Congress in 

pursuit of rational purposes––protection of the Social 

Security base and prevention of the potential disruption 

Rowan could cause––codified a revenue ruling which had 

been in force during the period in question. Plaintiff 

complied with [this revenue ruling] throughout, and it 

should not be considered arbitrary or unfair that it cannot 

reclaim amounts paid to Social Security which it never 

expected to be refunded. 

Id. at 553–54; accord Canisius Coll. v. United States, 799 F.2d 18, 26–27 

(2d Cir. 1986), cert. denied, 481 U.S. 1014 (1987); Temple Univ. v. United 

States, 769 F.2d 126, 135 (3d Cir. 1985), cert. denied, 476 U.S. 1182 

(1986); Johnson Controls, 296 S.W.3d at 401.

A final case that is factually similar, and therefore helpful, is the 

Kentucky Court of Appeals’ King decision previously mentioned. In King, 

two counties had for many years imposed a “fee” on individual incomes 

and business net profits without giving those paying the fees a credit for 

similar city fees paid by the taxpayers. 217 S.W.3d at 865–66. In 2001, 

taxpayers challenged the county fees, and the Kentucky Supreme Court 

held in 2004 that the counties should have been giving the taxpayers a 
30

credit for city fees the taxpayers had paid. Id. Based on this decision, 

the taxpayers filed an action on their own behalf and on behalf of all 

other persons who had paid the county fees seeking refunds of the 

excessive fees charged by the counties since 1986. Id. In response to 

the same decision, the legislature enacted a law providing that no 

taxpayer was entitled to a refund for any overpayment and making the 

statute retroactive. Id. at 866–67. The district court ruled the statute 

was not unconstitutional and dismissed the taxpayers’ suit for refunds. 

Id. at 865. 

On appeal, the appellate court held the statute precluding refunds 

of all excessive fees did not violate due process notwithstanding its long 

period of retroactivity, noting the legislature had enacted this provision 

“to shield [the counties] from what it believed could be the devastating 

[financial] consequences of the Supreme Court’s decision.” Id. at 870 

(distinguishing Carlton as dealing with a situation “significantly 

different”). The court noted, “If there are ‘settled expectations’ in this 

case, they are the County’s, not the taxpayers.” Id.; see also Jasinski v. 

City of Miami, 269 F. Supp. 2d 1341, 1347 (S.D. Fla. 2003) (“When a 

legislative body, in good faith, enacts a curative law to ratify, validate and 

confirm any act that it could have authorized in the first place, . . . it 

would contravene public policy to award plaintiffs a windfall for asserting 

a cause of action that the legislative body may constitutionally eliminate 

by curing any defects in the law.”), aff’d, 99 Fed. App’x 887 (11th Cir. 

2004); Johnson Controls, 296 S.W.3d at 401 (upholding retroactive 

“clarifying” legislation denying taxpayer refunds, noting taxpayers’ “lack 

of settled expectations and lack of detrimental reliance”).

The plaintiff claims the cases we have discussed are not good law 

in light of the United States Supreme Court’s decision in McKesson Corp. 
31

v. Division of Alcoholic Beverages & Tobacco, 496 U.S. 18, 110 S. Ct. 

2238, 110 L. Ed. 2d 17 (1990). In McKesson, the Florida Supreme Court 

had ruled that a Florida “tax scheme unconstitutionally discriminated 

against interstate commerce,” but the court had refused to provide the 

taxpayer a refund for taxes it had already paid. 497 U.S. at 22, 110 

S. Ct. at 2242, 110 L. Ed. 2d at 26. On certiorari to the United States 

Supreme Court, the Court held “the Due Process Clause requires the 

State to afford taxpayers a meaningful opportunity to secure 

postpayment relief for taxes already paid pursuant to a tax scheme 

ultimately found unconstitutional.” Id. at 22, 110 S. Ct. at 2242, 110 

L. Ed. 2d at 26–27.

Clearly, McKesson addressed the taxpayer’s procedural due process 

rights; it did not consider the validity of curative legislation under the 

doctrine of substantive due process. Moreover, the tax at issue in 

McKesson was one that was inherently unconstitutional or illegal, one 

that the state had no power to authorize under any circumstances. As 

we have already noted, the tax at issue here was not one that was 

inherently unconstitutional; it had simply not been authorized by the 

legislature at the time it was assessed and paid. McKesson plainly does 

not stand for the proposition that principles of substantive due process 

are violated by the enactment of a curative statute that retroactively 

ratifies a taxing authority’s imposition of an otherwise permissible tax. 

See Atchison, Topeka & Santa Fe Ry. v. United States, 61 Fed. Cl. 501, 

508 (Fed. Cl. 2004) (rejecting due process challenge to retroactivity of 

statute, distinguishing McKesson from cases involving curative 

legislation); Johnson Controls, 296 S.W.3d at 402–03 (rejecting 

applicability of McKesson to due process challenge to legislature’s 

retroactive confirmance of state taxing authority’s interpretation of tax 
32

statute). Therefore, McKesson does not undermine the validity of the 

cases upon which we rely.

In summary, then, the cases and legal authorities addressing the 

retroactive application of curative legislation establish: (1) ratification of 

a tax already imposed and collected cannot be equated with the 

retroactive imposition of a new tax for purposes of determining the 

constitutionality of retroactive application of a curative act, (2) curative 

acts do not impair any vested right of the taxpayer,11 (3) there is no 

litmus test for a reasonable period of retroactivity for curative acts, and 

(4) ratification of a tax collected without authority is given full 

retroactivity so long as the retroactivity furthers a legitimate purpose. 

The legislative purpose behind the curative act in this case was 

clearly to allocate the burdens of government and to avoid financial 

disruption to the finances of the cities involved. Importantly, this 

situation in not one in which taxpayers have reasonably relied upon tax 

 11We note that Iowa law regarding the impairment of vested rights is consistent 

with the authorities we have discussed. In fact, the precise argument plaintiff makes 

here––that he has a vested right to a refund––was made and rejected in our early Soper 

case. 39 Iowa at 117–18. In that case, the plaintiff argued “that before the passage of 

the curative act, the plaintiff had a right of action to recover back the illegal taxes paid, 

and that this is a vested right.” Id. at 121. We rejected the plaintiff’s argument there 

and have continued to hold in subsequent cases that curative legislation ratifying an 

invalid exercise of governmental power, including previously imposed taxes, does not 

interfere with vested rights. Id. at 124; see Schwarzkopf, 341 N.W.2d at 8; Iowa Elec. 

Light & Power Co. v. Inc. Town of Grand Junction, 221 Iowa 441, 452–53, 264 N.W. 84, 

90 (1935); Rosenbaum, 212 Iowa at 232–34, 231 N.W. at 648–49; Chicago, R.I. & P. Ry. 

v. Streepy, 211 Iowa 1334, 1338, 236 N.W. 24, 26 (1931); Indep. Dist. of Avoca, 99 Iowa 

at 561–62, 68 N.W. at 882; Boardman, 18 Iowa at 294–95. 

The plaintiff places great reliance on our decision in Thorp v. Casey’s General 

Stores, Inc., 446 N.W.2d 457 (Iowa 1989), in which this court held the retroactive 

application of an amendment to Iowa’s dramshop law that eliminated a plaintiff’s 

accrued tort claim deprived her of a vested right in violation of due process. Thorp, 446 

N.W.2d at 462. We specifically noted in our decision, however, that a similar 

conclusion does not prevail when the retroactive legislation is a curative act. Id. Such 

statutes, we stated, survive constitutional scrutiny even if they deprive a plaintiff of a 

vested cause of action. Id.
33

law and structured their affairs in a fashion that is prejudiced by the 

retroactive legislation. The fee payers in this case paid unauthorized 

franchise fees that were later ratified by the state. If the taxpayers in 

these municipalities had known that ratification would be forthcoming, 

they would not have altered their conduct in any material way. 

Certainly the legislature could have refused to ratify the acts of the 

cities, requiring the burden of tax refunds resulting from the unlawfully 

collected taxes to be borne by current city taxpayers, either in the form of 

increased taxes or reduced services. Instead, however, the legislature 

decided to avoid these disruptions by retroactively ratifying the taxes 

already paid.12 One may, of course, question the wisdom of these 

ratifying decisions on the ground that cities should be left to their own 

devices after pushing the tax envelope too far. The issue of the degree to 

which municipalities must be held on a short leash through a refusal to 

ratify unauthorized tax collections is generally a political question for the 

legislature to decide. In this case, the legislature’s determination that 

the interest in stable municipal finances trumps the need to discipline 

city management does not amount to an arbitrary or irrational choice 

under the facts and circumstances.

IX. Period of Retroactivity. 

As a backup argument, the plaintiff contends that, if we hold the 

legislature had the power to retroactively authorize the illegal taxes 

imposed by cities on cable television services, the retroactive application 

 12Notably, no taxpayer has been arbitrarily or irrationally singled out for special 

treatment. See Commonwealth Edison Co. v. Will County Collector, 749 N.E.2d 964, 975

(Ill. 2001) (upholding legislative act validating taxes predating effective date of 

legislation, noting the general assembly was not targeting any particular group of 

taxpayers “for retribution or other illegitimate purpose”); cf. Carlton, 512 U.S. at 32, 114 

S. Ct. at 2023, 129 L. Ed. 2d at 29 (concluding retroactive amendment to tax statute 

did not violate due process, in part, because “Congress’ purpose in enacting the 

amendment was neither illegitimate or arbitrary”). 
34

of this authorization should be limited to “one year or the adjournment of 

the previous legislative session, May 3, 2006.” He claims courts applying 

Carlton use a “bright line one year rule as the constitutionally 

permissible period of retroactivity for state tax legislation.” The plaintiff’s 

suggestion that a one-year retroactive period approaches the due process 

limit is based on dicta in Justice O’Connor’s concurring opinion in 

Carlton. See Carlton, 512 U.S. at 38, 114 S. Ct. at 2026, 129 L. Ed. 2d at 

33 (“A period of retroactivity longer than the year preceding the legislative 

session in which the law was enacted would raise, in my view, serious 

constitutional questions.”) (O’Connor, J., concurring). 

In our view, however, Justice O’Connor’s comments were not 

meant to amount to a per se rule in all cases of every variety involving 

taxes. Moreover, a majority of the Supreme Court in Carlton did not 

embrace a one-year rule, but instead provided a more flexible framework 

for deciding the due process question. See Montana Rail Link, Inc., 873 

F. Supp. at 1421 (rejecting plaintiff’s argument that all retroactive 

legislation must have a “short and limited period” of retroactivity, stating 

“in Carlton the Court did not establish a specific time frame for the 

validity of retroactive legislation”); Enter. Leasing Co. of Phoenix v. Ariz. 

Dep’t of Revenue, 211 P.3d 1, 5–6 (Ariz. Ct. App. 2008) (rejecting 

interpretation of Carlton as standing for proposition that “retroactivity in 

excess of one year . . . creates a due process issue” and holding six-year 

period of retroactivity did not violate due process), review denied, (Ariz. 

2009); Johnson Controls, 296 S.W.3d at 399 (rejecting “a specified 

modesty period,” noting eight of the nine justices in Carlton did not 

subscribe to a one–year limit on retroactivity); see also Canisius Coll., 

799 F.2d at 26–27 (rejecting “a one-year bench mark as the 

constitutional limit of retroactivity,” and holding four–year retroactive 
35

application of curative statute was not violative of due process); cf. Licari 

v. Comm’r of Internal Revenue, 946 F.2d 690, 695 (9th Cir. 1991) 

(rejecting due process challenge to statute retroactively increasing tax 

penalty, noting a four-year period of retroactivity was not, by itself, 

sufficient to violate due process), aff’d, 946 F.2d 898 (9th Cir. 1991); 

Temple Univ., 769 F.2d at 135 (in case involving clarifying legislation 

applied retroactively to plaintiff’s tax returns going back six years, court 

stated, “no federal court of appeals has yet adopted an absolute temporal 

limitation on retroactivity,” citing case allowing a nine-year period of 

retroactivity). Moreover, to the extent Carlton stands for the proposition 

that tax statutes must have a certain period of retroactivity, that 

proposition is inapplicable here because the legislation authorizing the 

city’s franchise fees is a curative act. 

It is, of course, possible under the Iowa due process clause to 

adopt a different approach from the federal model. Our recent cases 

emphasize that we jealously protect our right to engage in independent 

analysis of state constitutional claims, both with respect to the standards 

to be utilized and the application of those standards to the facts and 

circumstances of a given case. See, e.g., State v. Bruegger, 773 N.W.2d 

862, 883 (Iowa 2009); Racing Ass’n of Cent. Iowa v. Fitzgerald, 675 

N.W.2d 1, 6–7 (Iowa 2004). Here, however, the plaintiff does not propose 

a wholesale abandonment of established federal doctrine under the Iowa 

Constitution, but instead implies that the dicta in Justice O’Connor’s 

concurring opinion in Carlton should provide the basis for a decision in 

his favor under the Iowa Constitution. This dicta does not present a 

basis for decision under the Iowa Constitution in light of the nature of 

the dispute presented here and the lack of detrimental reliance by the 

taxpayers. While there are Iowa cases that suggest a short period of 
36

retroactivity for tax legislation, these cases do not involve ratification of 

prior acts of municipalities by the state. See, e.g., Shell Oil Co. v. Bair, 

417 N.W.2d 425, 431–32 (Iowa 1987); City Nat’l Bank of Clinton v. Iowa 

State Tax Comm’n, 251 Iowa 603, 608–09, 102 N.W.2d 381, 384 (1960).

Having rejected a rigid limit on the allowable period of retroactivity 

for curative legislation, we will consider the plaintiff’s argument that only 

a modest period of retroactivity can satisfy due process using the 

substantive due process principles outlined above. As we have 

discussed, the purpose of the 2007 act passed by the Iowa legislature 

was to safeguard the financial stability of municipalities by ensuring they

would not be required to refund substantial sums that they had already 

collected––and spent. Clearly, the validation of past collections was a 

reasonable fit with this legislative purpose. The plaintiff has not 

demonstrated why this purpose––to safeguard the public fisc––is 

advanced by allowing the city to retain the past one or two years of taxes, 

but not the past five and one-half years of taxes. See The 

Constitutionality of Retroactive Legislation, 73 Harv. L. Rev. at 704 

(“[W]hen dealing with curative statutes, the Court has consistently held 

that the legislative purpose is of itself sufficient to justify the concomitant 

retroactivity.”); cf. Rocanova v. United States, 955 F. Supp. 27, 30

(S.D.N.Y. 1996) (holding six-year period of retroactivity for lengthened 

statute of limitations governing government claims for back taxes did not 

violate due process as “[t]he very purpose of the Amendment required its 

application to all existing tax liabilities”), aff’d, 109 F.3d 127 (2d Cir.), 

cert. denied, 522 U.S. 821 (1997); Johnson Controls, 296 S.W.3d at 401 

(rejecting due process challenge to 2000 statute that gave effect to taxing 

authority’s interpretation of tax statute from 1988 to 1994, an 

interpretation that was held erroneous by the Kentucky Supreme Court 
37

in 1994). See generally Waters, 251 N.W.2d at 548 (stating a curative act 

“ ‘is necessarily retrospective in character’ ” (quoting McSurely v. McGrew,

140 Iowa 163, 172, 118 N.W. 415, 419 (1908))). Therefore, the plaintiff 

has not carried his burden to establish the unconstitutionality of the 

legislature’s action.

X. Summary and Disposition.

We recognize the result in this case makes litigation challenging 

municipal taxes that have not been authorized by the state less attractive 

as recovery of potential refunds may be cut off by the legislature. Yet, 

any municipality that imposes unauthorized taxes runs the risk of fiscal 

disruption in the event the legislature declines to ratify its actions.13 If 

the legislature wishes to provide taxpayers with a mandatory recovery 

when unauthorized taxes are levied by local governments, it may do so 

through appropriate legislation. As even the Carlton Court stated with 

respect to the retroactive imposition of a new tax: 

“Provided that the retroactive application of a statute is 

supported by a legitimate legislative purpose furthered by a 

rational means, judgments about the wisdom of such 

legislation remain within the exclusive province of the 

legislative and executive branches. . . .”

Carlton, 512 U.S. at 30–31, 114 S. Ct. at 2022, 129 L. Ed. 2d at 28

(quoting Pension Benefit Guar. Corp., 467 U.S. at 729, 104 S. Ct. at 2718, 

81 L. Ed. 2d at 611); accord Usery v. Turner Elkhorn Mining Co., 428 U.S. 

1, 19, 96 S. Ct. 2882, 2894, 49 L. Ed. 2d 752, 768–69 (1976) (noting 

wisdom of retroactive application of statute imposing liability on coal 

mine operators for disabilities of former employees was “not a question of 

 13We note the fees determined to constitute illegal taxes in Kragnes were 

imposed on gas and utility services. The legislation at issue here does not ratify such 

fees, and in fact, the plaintiff in this case has a pending claim for refund of gas and 

utility fees. 
38

constitutional dimension,” and holding retroactivity was not a due 

process violation). This court made a similar observation in State v. 

Miner, 331 N.W.2d 683 (Iowa 1983), in considering a substantive due 

process challenge to economic regulation: “Our function is not that of a 

super-legislature which weighs the wisdom of legislation; we look only to 

whether the means chosen by the State are rational and reasonably 

necessary to the accomplishment of the State’s purpose.” 331 N.W.2d at 

689 (citation omitted). For the present, our legislature has reserved to 

itself the power to determine whether to ratify unauthorized local taxes 

on a case-by-case basis. We must defer to a constitutional exercise of 

that judgment.

In summary, the legislature’s ratification of the city’s unauthorized 

tax is a curative statute whose purpose––to safeguard the public fisc and 

the financial stability of local municipalities––is rationally related to its 

retroactivity. Therefore, this statute does not violate the plaintiff’s 

substantive due process rights. We affirm the district court’s summary 

judgment for the city on the plaintiff’s claim for a refund of fees paid on 

cable television services. We remand this case for further proceedings on 

the plaintiff’s claim for a refund of gas and utility fees.

AFFIRMED AND CASE REMANDED.

All justices concur except Wiggins and Hecht, JJ., who dissent.
39

#07–1819, Zaber v. City of Dubuque

WIGGINS, Justice (dissenting).

The facts of this case illustrate why many ordinary citizens distrust 

their elected officials. In 2002 this court’s decision in Home Builders 

Ass’n of Greater Des Moines, established the proposition that any fees a 

city collects is an illegal tax when it charges franchise fees not 

reasonably related to the reasonable costs of inspecting, licensing, 

supervising, or otherwise regulating a franchised activity. Home Builders 

Ass’n of Greater Des Moines v. City of W. Des Moines, 644 N.W.2d 339, 

347–48 (Iowa 2002). 

On May 2, 2005, the elected officials of the City of Dubuque 

enacted a cable franchise fee. Dubuque Mun. Code ch. 11, § 3A-7(1). 

Under existing Iowa law, the city should have known that such a fee is 

an illegal tax to the extent it exceeds the reasonable administrative costs 

of regulating the cable provider. The fee as enacted was due not to the 

city, but to cable providers who would disconnect a subscriber’s cable 

service if he or she refused to pay the illegal tax. Once the citizens of 

Dubuque realized the franchise fee was nothing more than an illegal tax, 

they brought this action to seek a refund.

On May 26, 2006, this court issued the Kragnes decision. Kragnes 

v. City of Des Moines, 714 N.W.2d 632 (Iowa 2006). In Kragnes, this 

court held the citizens of a municipality could bring an action against the 

municipality for a refund of that part of a franchise fee paid by the 

citizens that exceeded the reasonable administrative costs related to gas 

and electric utility franchises. Id. at 643–44. In response to Kragnes, 

the 82nd General Assembly passed a law authorizing franchise fees in 

excess of a city’s administrative costs and giving municipalities the right 

to retain the revenues it collected from the illegal tax. Iowa Code 
40

§ 477A.7(5) (Supp. 2007). This law became effective May 29, 2007. 2007 

Iowa Acts ch. 201, § 15.

I assume that in 2005, when the Dubuque City Council passed its 

franchise fee, the 81st General Assembly had neither the votes nor the 

political will to authorize the city to collect franchise fees on cable 

services in excess of the reasonable costs of inspecting, licensing, 

supervising, or otherwise regulating such services. Subsequently, the 

82nd General Assembly, a legislative body not elected by the people at 

the time the Dubuque City Council levied and collected the illegal tax, 

decided the city could retain the revenues generated by the tax. The 

actions of the 82nd General Assembly, authorizing the collection of the 

illegal tax retrospectively, compounded the unfairness of the actions of 

the Dubuque City Council when it enacted the tax without legislative 

authority. Such conduct by these elected officials completely disregarded 

the political will of the general assembly at the time the Dubuque City 

Council imposed the franchise fee on cable services. These actions are 

as repugnant to the American system of taxation as the concept of

taxation without representation.

The majority decision holds, a curative statute may, consistent 

with due process principles, authorize the unfettered retroactive 

application of an illegal tax so long as the purpose of the curative statute 

is to protect the public fisc. Of course, any time a city must pay out 

funds the public fisc is at risk. Thus, under the majority’s decision, a 

curative statute authorizing the imposition and retention of an illegal tax

can never be subject to a due process challenge.

Taking the holding of the majority to its logical conclusion leads to 

the result that any act a legislative body had the power to enact, but did 

not authorize by formal legislative enactment, could be the subject of a 
41

curative act and evade the requirements of the Due Process Clauses of 

the United States and Iowa Constitutions. This reasoning is illogical, 

and its flaw is illustrated by the following example. 

The general assembly has the power to enact a fee on hunters. 

However, such a fee is nothing more than an illegal tax until a bill 

enacting such a fee is introduced in the general assembly, passed by a 

constitutional majority of the house and senate, and signed by the 

governor. Suppose the department of natural resources decides the 

state’s financial situation requires more revenues and on its own, enacts 

a rule to collect an additional ten percent fee on hunting licenses without 

the authorization of a law enacting such an increase. Because the 

legislature has not authorized this fee, it is an illegal tax. Under the logic 

of the majority, the department may collect and retain this tax without 

legislative authority so long as a subsequent general assembly enacts a 

curative act allowing the state to retain the illegal tax it previously 

collected.

Moreover, a retroactive tax is a new tax whether the legislature 

enacts it as a curative statute or by other legislation. The effect is the 

same, the legislature is authorizing a governmental entity to collect and 

retain the revenues of a tax that the entity previously was not authorized 

to collect. The manner in which the legislature enacts a retroactive tax is 

a distinction without a difference. 

This does not mean, however, retroactive taxes necessarily violate 

the Due Process Clauses of the Federal or State Constitutions. See, e.g., 

United States v. Carlton, 512 U.S. 26, 35, 114 S. Ct. 2018, 2024, 129 L. 

Ed. 2d 22, 31 (1994) (applying federal due process); United States v. 

Hemme, 476 U.S. 558, 571, 106 S. Ct. 2071, 2079, 90 L. Ed. 2d 538, 

550 (1986) (same); United States v. Darusmont, 449 U.S. 292, 297–99, 
42

101 S. Ct. 549, 552–53, 66 L. Ed. 2d 513, 517–19 (1981) (same); Welch v. 

Henry, 305 U.S. 134, 149–51, 59 S. Ct. 121, 126–27, 83 L. Ed. 87, 94–95 

(1938) (same); United States v. Hudson, 299 U.S. 498, 500–01, 57 S. Ct. 

309, 310, 81 L. Ed. 370, 372 (1937) (same); Shell Oil Co. v. Bair, 417 

N.W.2d 425, 431–32 (Iowa 1987) (same); City Nat’l Bank of Clinton v. 

Iowa State Tax Comm’n, 251 Iowa 603, 608–09, 102 N.W.2d 381, 384 

(1960) (applying state and federal due process principles).

The most recent Supreme Court decision to address the 

retroactivity of a tax is Carlton. In Carlton, a taxpayer relied on the Tax 

Reform Act of 1986 to exclude from federal estate taxation one-half of the 

proceeds from the sale of securities to an Employee Stock Ownership 

Plan. Carlton, 512 U.S. at 28, 114 S. Ct. at 2020–21, 129 L. Ed. 2d at 

26–27. In January 1987, after the taxpayer made the sale, the Internal 

Revenue Service (IRS) issued a notice stating it would not recognize such 

a deduction unless the decedent directly owned the stock immediately 

prior to his or her death. Id. at 29, 114 S. Ct. at 2021, 129 L. Ed. 2d at 

27. In December 1987 Congress enacted a statute codifying the 

substance of the IRS notice. Id. The IRS then disallowed the deduction 

because the decedent did not own the stock immediately before her 

death. Id. The taxpayer paid the deficiency, filed a claim for a refund, 

and instituted a suit for refund arguing the government’s retroactive use 

of the December 1987 law to deny a deduction available to the taxpayer 

when the taxpayer made the sale violated the Due Process Clause of the 

Fifth Amendment to the United States Constitution. Id. 

Prior to Carlton, the Supreme Court determined the validity of a 

retroactive tax statute under the Due Process Clause by determining 

whether its “ ‘retroactive application is so harsh and oppressive as to 

transgress the constitutional limitation.’ ” Id. at 30, 114 S. Ct. at 2022, 
43

129 L. Ed. 2d at 28 (quoting Welch, 305 U.S. at 147, 59 S. Ct. at 126, 83 

L. Ed. at 93). In applying the harsh and oppressive test, the Ninth 

Circuit in Carlton, considered two factors. Carlton v. United States, 972 

F.2d 1051, 1059 (9th Cir. 1992), rev’d, 512 U.S. 26 (1994). These factors 

are “[f]irst, did the taxpayer have actual or constructive notice that the 

tax statute would be retroactively amended? Second, did the taxpayer 

rely to his detriment on the pre-amendment tax statute, and was such 

reliance reasonable?” Id. A third factor used by courts prior to the 

Supreme Court’s decision in Carlton in determining whether a retroactive 

application of a tax meets due process requirements was whether 

Congress acted promptly and established a modest period of 

retroactivity. Darusmont, 449 U.S. at 296–97, 101 S. Ct. at 551–52, 66 

L. Ed. 2d at 517.

After applying the factors of the harsh and oppressive test, the 

Ninth Circuit found the retroactive application of the tax 

unconstitutional. Carlton, 972 F.2d at 1062. In reversing the Ninth 

Circuit, the Supreme Court abandoned the factors of reliance and notice 

previously used by the Court in applying the harsh and oppressive test. 

Carlton, 512 U.S. at 30–34, 114 S. Ct. at 2022–24, 129 L. Ed. 2d at 28–

31. In place of the factors the Supreme Court previously applied under 

the harsh and oppressive test, the Court held, when dealing with 

economic policy, the harsh and oppressive test should not differ from the 

prohibition against arbitrary and irrational legislation. Id. at 30, 114 

S. Ct. at 2022, 129 L. Ed. 2d at 28. Thus, the Court held as long as a 

retroactive tax is supported by a legitimate legislative purpose furthered 

by rational means, the retroactive application will not violate the Federal 

Due Process Clause. Id. at 30–31, 114 S. Ct. at 2022, 129 L. Ed. 2d at 

28.
44

In Carlton, when deciding whether the retroactive application of a 

tax is supported by a legitimate legislative purpose furthered by rational 

means, the Supreme Court considered two factors. First, the Supreme 

Court determined whether the legislative body’s purpose in enacting the 

retroactive application of the statute was illegitimate or arbitrary. Id. at 

32, 114 S. Ct. at 2023, 129 L. Ed. 2d at 29. It is sufficient “if there exists 

some legitimate purpose underlying the retroactivity provision.” Id. at 

37, 114 S. Ct. at 2025, 129 L. Ed. 2d at 32 (O’Connor, J., concurring). 

The Supreme Court concluded the retroactive application of the tax was 

neither illegitimate nor arbitrary. Id. at 32, 114 S. Ct. at 2023, 129 L. 

Ed. 2d at 29. The Court determined Congress had a legitimate purpose 

in correcting a mistake it made when it enacted the Tax Reform Act of 

1986. Id. A failure to rectify the mistake would lead to billions of dollars 

in lost revenue for the government, and innocent taxpayers would have 

to help replenish the federal coffers if the mistake was not rectified 

retroactively. Id. at 31–32, 114 S. Ct. at 2022–23, 129 L. Ed. 2d at 29. 

Second, the Supreme Court determined whether the legislature 

“acted promptly and established only a modest period of retroactivity.” 

Id. at 32, 114 S. Ct. at 2023, 129 L. Ed. 2d at 29. If the legislature acted 

promptly and established only a modest period of retroactivity, the 

statute would comport with due process. Id. The Supreme Court 

determined the retroactivity of the tax in question extended for a modest 

period of slightly greater than one year. Id. at 33, 114 S. Ct. at 2023, 

129 L. Ed. 2d at 30. Therefore, the Supreme Court upheld the 

retroactive application of the tax against a due process challenge. Id. at 

35, 114 S. Ct. at 2024, 129 L. Ed. 2d at 31. 

Following the Carlton decision, legal scholars agreed that, in order 

for the retroactive application of a tax to pass constitutional muster 
45

under the Due Process Clause, a legislative body’s purpose in enacting 

the retroactive application of a tax statute can be neither illegitimate nor 

arbitrary, and the statute must possess a modest period of retroactivity. 

See, e.g., Charles H. Koch, Jr., 3 Administrative Law & Practice

§ 12.34[11] (2d ed. 1997); Pat Castellano, Retroactively Taxing Done 

Deals: Are There Limits?, 43 U. Kan. L. Rev. 417, 438 (1995); Lynn A. 

Gandhi, Taxation, 53 Wayne L. Rev. 599, 607 n.70 (2007); Robert R. 

Gunning, Back From the Dead: The Resurgence of Due Process Challenges 

to Retroactive Tax Legislation, 47 Duq. L. Rev. 291, 293–94 (2009); Leo P. 

Martinez, Of Fairness and Might: The Limits of Sovereign Power to Tax 

After Winstar, 28 Ariz. St. L.J. 1193, 1208–09 (1996); Kaiponanea T. 

Matsumura, Reaching Backward While Looking Forward: The Retroactive 

Effect of California’s Domestic Partner Rights and Responsibilities Act, 54 

UCLA L. Rev. 185, 203 (2006); Michael J. Phillips, The Slow Return of 

Economic Substantive Due Process, 49 Syracuse L. Rev. 917, 964 n.306 

(1999); Monica Risam, Retroactive Reinstatement of Top Federal Estate 

Tax Rates Is Constitutional: Kane v. United States, 51 Tax Law. 481, 485

(1998).

Other courts have passed on the constitutionality of a retroactive 

tax statute since the Supreme Court’s decision in Carlton. These courts 

have applied the two-part Carlton test. See, e.g., Quarty v. United States, 

170 F.3d 961, 965–68 (9th Cir. 1999) (upholding a retroactive tax by 

finding an eight-month period of retroactivity to be a modest period of 

retroactivity); Kitt v. United States, 277 F.3d 1330, 1334–35 (Fed. Cir. 

2002) (upholding a retroactive tax by finding a seven-month period of 

retroactivity to be a modest period of retroactivity); Kane v. United States, 

942 F. Supp. 233, 234 (E.D. Pa. 1996) (upholding a retroactive tax by 

finding an eight-month period of retroactivity to be a modest period of 
46

retroactivity); Enter. Leasing Co. of Phoenix v. Ariz. Dep’t of Revenue, 211 

P.3d 1, 5–7 (Ariz. Ct. App. 2008) (upholding a retroactive tax by finding a 

one-month period of retroactivity to be a modest period of retroactivity); 

Gardens at W. Maui Vacation Club v. County of Maui, 978 P.2d 772, 782–

83 (Haw. 1999) (upholding a retroactive tax by finding a six-month period 

of retroactivity to be a modest period of retroactivity); Rivers v. State, 490 

S.E.2d 261, 264–65 (S.C. 1997) (holding a retroactive tax of at least two 

to three years is not a modest period of retroactivity; therefore, the 

statute’s retroactivity violates state and federal due process).

Prior to the Supreme Court’s decision in Carlton, this court had 

two occasions to look at the retroactivity of a tax statute. The first was 

City National Bank of Clinton. There, a taxpayer asked this court to 

determine the constitutionality of the retroactive application of a tax law 

regarding capital gains. City Nat’l Bank of Clinton, 251 Iowa at 605, 102 

N.W.2d at 382. The taxpayer claimed the retroactive application of the 

statute violated the Due Process Clauses of both the United States and 

Iowa Constitutions. Id. at 607, 102 N.W.2d at 383. In deciding 

otherwise, this court applied a two-factor test under both Constitutions. 

Id. at 608–09, 102 N.W.2d at 383–84. The first factor considered by this 

court in determining if the retroactive application of the statute violated 

due process was whether its retroactivity would be “harsh and 

oppressive.” Id. at 608, 102 N.W.2d at 384. In using this factor, this 

court applied the federal due process standard used by the Supreme 

Court at the time. See, e.g., Welch, 305 U.S. at 147, 59 S. Ct. at 125–26, 

83 L. Ed. at 93. 

The second factor this court considered in City National Bank of 

Clinton, when determining if the retroactive application of the statute 

violated due process, was the period of retroactivity. City Nat’l Bank of 
47

Clinton, 251 Iowa at 608–09, 102 N.W.2d at 384. Consideration of the 

period of retroactivity is the same as the second factor used by the 

Supreme Court in Carlton. Carlton, 512 U.S. at 32–33, 114 S. Ct. at 

2023, 129 L. Ed. 2d at 29–30. In applying this factor under the Iowa 

Constitution, this court stated the period of retroactivity should extend 

“no further than two years, or up to the adjournment of the last previous 

legislative session.” City Nat’l Bank of Clinton, 251 Iowa at 608–09, 102 

N.W.2d at 384. This limitation on retroactivity prevents the legislature 

from enacting a tax that a prior legislature did not have the political will 

to enact. See Iowa Code § 2.2 (2007) (stating a regular session of the 

general assembly lasts for two years with the session beginning in the 

odd-numbered year).

The other case decided by this court dealing with the retroactivity 

of a tax statute was Shell Oil Co. There, a taxpayer claimed the 

retroactive application of a tax law dealing with the deductibility of a 

windfall profit tax violated the Federal Constitution’s Due Process 

Clause. Shell Oil Co., 417 N.W.2d at 430. In Shell Oil Co., this court 

reaffirmed the two-factor test it applied in City National Bank of Clinton

and held the retroactive application of the tax did not violate due 

process. Id. at 431–32.

I believe the proper test to determine if a retroactive tax meets the 

due process requirements of the Federal and State Constitutions is 

whether the retroactive application of the tax statute is supported by a 

legitimate legislative purpose furthered by rational means. I also believe 

the two factors used by the Supreme Court in Carlton is the proper 

analysis to determine if the retroactive application of the statute is 

supported by a legitimate legislative purpose furthered by rational 

means. The first factor requires the court to determine whether the 
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legislative body’s purpose in enacting the retroactive application of the 

statute was illegitimate or arbitrary. The second factor requires the court 

to determine whether the legislature enacted only a modest period of 

retroactivity. Labeling the tax as a tax enacted by a curative statute does 

not change this analysis. 

I agree with the majority’s analysis that the enactment of Iowa 

Code section 477A.7(5) is supported by a legitimate legislative purpose 

furthered by rational means. The majority, however, stops its analysis of 

the constitutionality of the statute at this point by labeling the tax as a 

tax authorized by a curative statute. Here, the majority and I part ways. 

In determining the constitutionality of section 477A.7(5), the court must 

also examine the period of retroactivity to determine if the tax violates 

substantive due process under the Federal and State Constitutions.

Under a federal constitutional analysis, the modest period of 

retroactivity does not have a bright-line rule. Justice O’Connor 

suggested in her concurring opinion that “[a] period of retroactivity longer 

than the year preceding the legislative session in which the law was 

enacted would raise, in [her] view, serious constitutional questions.” 

Carlton, 512 U.S. at 38, 114 S. Ct. at 2026, 129 L. Ed. 2d at 33 

(O’Connor, J., concurring). Justice Scalia, in his concurring opinion with 

Justice Thomas joining, urged abandonment of the modest-period-ofretroactivity factor and proposed the Court should consider the 

taxpayer’s reliance on the existing law as the second factor. Id. at 40, 

114 S. Ct. at 2026–27, 129 L. Ed. 2d at 34 (Scalia, J., concurring). 

However, the majority of the Court applied the modest-period-ofretroactivity factor, but did not specify a certain period of retroactivity 

that would comport with due process under the Federal Constitution. Id.

at 32–33, 114 S. Ct. at 2023, 129 L. Ed. 2d at 29–30. Rather than 
49

specifying a specific period of retroactivity, the majority cited its prior 

decisions holding that a modest retroactivity period is “ ‘customary 

congressional practice’ ” and that a retroactive application of slightly 

greater than one year will not violate the Federal Due Process Clause. Id.

(quoting Darusmont, 449 U.S. at 296–97, 101 S. Ct. at 552, 66 L. Ed. 2d 

at 517). 

The Supreme Court has upheld retroactive federal tax laws against 

federal due process challenges when the period of retroactivity was less 

than fourteen months. See id. at 28–29, 114 S. Ct. at 2021, 129 

L. Ed. 2d at 26–27 (upholding a fourteen-month retroactive federal tax 

law against a due process challenge); Hemme, 476 U.S. at 562, 106 S. Ct. 

at 2074–75, 90 L. Ed. 2d at 544–45 (upholding a four-month retroactive 

federal tax law against a due process challenge); Darusmont, 449 U.S. at 

294–95, 101 S. Ct. at 550–51, 66 L. Ed. 2d at 516 (upholding a tenmonth retroactive federal tax law against a due process challenge);

Hudson, 299 U.S. at 501, 57 S. Ct. at 310, 81 L. Ed. at 372 (upholding a 

one-month retroactive federal tax law against a due process challenge). 

The Supreme Court has also upheld a retroactive state tax law against a 

due process challenge that reached back two years. Welch, 305 U.S. at 

141–42, 59 S. Ct. at 123, 83 L. Ed. at 90. There, the Supreme Court 

emphasized that the Wisconsin legislature met biannually and passed its 

curative act “at the first opportunity after the tax year in which the 

income was received.” Id. at 150–51, 59 S. Ct. at 127, 83 L. Ed. at 95. 

Under the Iowa Constitution, this court has developed a bright-line 

rule, consistent with Justice O’Connor’s concurring opinion in Carlton, 

for the modest period a legislature can apply a retroactive tax. In City 

National Bank of Clinton, this court applied a state due process analysis 

and held that for a retroactive tax to be valid, the period of retroactivity 
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should extend “no further than two years, or up to the adjournment of 

the last previous legislative session.” City Nat’l Bank of Clinton, 251 Iowa 

at 608, 102 N.W.2d at 384. I believe under an Iowa constitutional due 

process analysis, this court should continue to apply this bright-line rule 

because this limitation on retroactivity prevents the legislature from 

enacting a tax that a prior legislature did not have the political will to 

enact. 

Because this court has held the Iowa Constitution’s due process 

clause has a bright-line rule as to what constitutes a modest period of 

retroactivity, I would analyze the constitutionality of section 477A.7(5) 

under the due process clause of the Iowa Constitution. Although the

legislature acted promptly in enacting section 477A.7(5) after this court 

announced its decision in Kragnes, the legislature did not include a 

period of retroactivity within the bright-line rule established in City 

National Bank of Clinton. In fact, the legislature chose to give section 

477A.7(5) an unfettered period of retroactivity. See Iowa Code 

§ 477A.7(5). This unlimited period of retroactivity far exceeds the brightline rule that the period of retroactivity should extend “no further than 

two years, or up to the adjournment of the last previous legislative 

session.” City Nat’l Bank of Clinton, 251 Iowa at 608, 102 N.W.2d at 384. 

Therefore, I would hold, separately and independently from a federal due 

process analysis and in the exercise of this court’s exclusive prerogative 

to determine the constitutionality of an Iowa statute under the Iowa 

Constitution, that section 477A.7(5)’s unlimited period of retroactivity 

violates the due process clause contained in article I, section 9, of the 

Iowa Constitution.

However, I would not end the inquiry here. In construing a statute 

the court’s ultimate goal is to ascertain and, if possible, give effect to the 
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intention of the legislature. Janson v. Fulton, 162 N.W.2d 438, 442 (Iowa 

1968). Additionally, it is the court’s duty in construing a statute to 

preserve it and render it consistent with the state constitution, if 

possible. Hines v. Ill. Cent. Gulf R.R., 330 N.W.2d 284, 290 (Iowa 1983). 

It is clear that when the legislature enacted section 477A.7(5), it 

intended to retroactively authorize the collection and retention of a cable 

franchise tax, including the fees collected in excess of the municipality’s 

reasonable costs of inspecting, supervising, or otherwise regulating the 

franchise. Accordingly, if I were to hold section 477A.7(5) 

unconstitutional because of its unlimited period of retroactivity, I would 

be defeating the legislature’s clear intent. Therefore, rather than holding 

the statute entirely unconstitutional, I believe the proper remedy would 

be to hold unconstitutional only that part of the retroactive period that is 

inconsistent with the due process principles contained in this dissent. 

See Peterson v. Comm’r of Revenue, 825 N.E.2d 1029, 1037–41 (Mass. 

2005) (giving a statute limited retroactivity after the court held it could 

not allow the period of retroactivity as enacted by the legislature). 

Consequently, I would hold section 477A.7(5) can be applied 

retroactively, but its period of retroactivity shall not extend further than 

two years, or up to the adjournment of the last legislative session.

The last legislative session prior to the enactment of section 

477A.7(5), ended May 3, 2006. See Iowa Sen. J., 81st G.A., Reg. Sess., 

at 1090 (2006); Iowa H.J., 81st G.A., Reg. Sess., at 1755 (2006). Thus, 

under my analysis, the city could collect cable franchise taxes beginning 

on May 3, 2006. However, I believe any retention of cable franchise taxes 

prior to that date violates the due process clause contained in article I, 

section 9 of the Iowa Constitution.
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The substantive component of the Due Process Clause “bars 

certain arbitrary, wrongful government actions ‘regardless of the fairness 

of the procedures used to implement them.’ ” Zinermon v. Burch, 494 

U.S. 113, 125, 110 S. Ct. 975, 983, 108 L. Ed. 2d 100, 113 (1990) 

(quoting Daniels v. Williams, 474 U.S. 327, 331, 106 S. Ct. 662, 665, 88 

L. Ed. 2d 662, 668 (1986)). By not applying the proper due process 

analysis, the majority permits municipalities to collect unauthorized 

taxes and legitimize them later, without temporal limitation. The 

majority’s holding under this factual situation gives credence to Justice 

Scalia’s notion that substantive due process is an oxymoron. Carlton, 

512 U.S. at 39, 114 S. Ct. at 2026, 129 L. Ed. 2d at 33 (Scalia, J., 

concurring). 

Hecht, J., joins this dissent.