Opinion ID: 1725021
Heading Depth: 1
Heading Rank: 9

Heading: prospective operation of unconstitutionality

Text: Relying upon Cipriano v. City of Houma, 395 U.S. 701, 89 S.Ct. 1897, 23 L.Ed.2d 647 (1969); Linkletter v. Walker, 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965); Chicot County Gravity Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 60 S.Ct. 317, 84 L.Ed. 329 (1940); Great Northern R. Co. v. Sunburst Oil and Refining Co., 287 U.S. 358, 53 S.Ct. 145, 77 L.Ed. 360 (1931), the Commission maintains a pronouncement of retroactive unconstitutionality herein may be decreed without violation of any constitutional provision, Federal or State. The decisions of the United States Supreme Court on the subject recognize that in instances of courts holding laws invalid, or reversing former decisions, the basic problems are primarily those of due process, vested rights and the finality of acts and contracts performed and entered into pursuant to laws which have been previously adjudged valid or decisions of courts which have become final. In this area, the highest Federal Court has evolved the rule that the Federal Constitution has no voice in the matter; that in overruling a statute or decision, a State court may do so either prospectively or retroactively, without in either case running afoul of any Federally guaranteed protection in the realm of due process or vested rights. See Great Northern R. Co. v. Sunburst Oil and Refining Co., above. The cases cited by the Commission stand for the proposition that the retroactive or prospective application of decisions overturning state statutes and prior court decisions is a matter of state rather than Federal constitutional law. They do not mandate either result, and do not support the conclusion that retroactive application is mandatory. To the contrary, the case most similar factually to that at bar makes a persuasive argument that a subsequent finding of unconstitutionality should not be applied retroactively to overturn a final judgment. See Chicot County Gravity Drainage District v. Baxter State Bank, above. In Chicot, the plaintiff bank was the holder of revenue bonds issued by the defendant drainage district. During the depression, the drainage district defaulted on its bonds. The district petitioned the U.S. District Court for authority to reorganize under the Municipal Dept. Readjustment Act of 1934, 48 Stat. at L. 798, chap. 345. Bondholders, including the bank, participated in the proceeding under which all claimants were given a period of one year to file claims with the clerk of the District Court. The decree stipulated that unless a claim was made within the one year period, it would be forever barred. The decree further provided for the cancellation of the old bonds and the issuance of new bonds to replace them. More than one year later, the bank sued on their bonds, which had never been presented to the clerk of court. The drainage district pleaded the judgment of the district court in the reorganization plan as res judicata. The bank demurred to the answer, and pleaded that the act of Congress under which the reorganization had been conducted had been declared unconstitutional by the Supreme Court in a proceeding conducted subsequent to the reorganization. In that context, Mr. Justice Hughes stated, for a unanimous Court: The courts below have been proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. (Citations omitted). It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects,with respect to particular relations, individual and corporate, and particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal, and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified. 308 U.S. at 374, 60 S.Ct. at 318. The Supreme Court then held the doctrine of res judicata would be applied, as the bank was a party to the earlier proceedings, and failed to raise the constitutional issue at that time. Here, however, res judicata is not applicable to the Commission since it was neither a party nor privy of a party to the former actions. The question here is what effect will be given the judgment obtained by Firefighters under the statutes which are now held invalid. In other words, we must decide whether the Acts will be declared null retroactively, thus divesting the rights and interests accrued thereunder, or whether we will declare the nullity prospectively and thus allow enforcement of all such rights accrued until the effective date decreed herein. The Commission asserts that unless subject statutes are declared invalid retroactively, the City fisc will suffer irreparable harm, and that members of the city fire department will receive preferential treatment not accorded other civil service employees. Conversely, Firefighters maintain they have a valid final judgment declaring their entitlement to the benefits provided by subject legislation. It is conceded by the Commission that some of the benefits provided by Acts 55 and 57 have been paid. We are of the view that final judgments should not be declared null retroactively save for the gravest of reasons such as the prevention of gross injustice or the elimination of unconscionable inequity. We find no such compelling reason in this instance.