Opinion ID: 511000
Heading Depth: 2
Heading Rank: 1

Heading: Retroactivity of Garcia.

Text: 9 Only a retroactive application of Garcia could make the FLSA provisions applicable to appellants' employment before February 19, 1985, since during that period their work as police officers was plainly exempted by National League of Cities. National League of Cities expressly included police protection in a list of examples of traditional governmental functions of the states and their political subdivisions that were exempted from FLSA coverage. 2 426 U.S. at 851, 96 S.Ct. at 2474. 10 The district court correctly concluded that Garcia should be applied only prospectively. We recognize that [t]he longstanding common law rule is that a decision reformulating federal civil law will usually be applied retroactively. Kartevold v. Spokane County Fire Protection Dist. No. 9, 625 F.Supp. 1553, 1555 (E.D.Wash.1986); see also Thorpe v. Housing Auth. of the City of Durham, 393 U.S. 268, 281-82, 89 S.Ct. 518, 625-26, 21 L.Ed.2d 474 (1969) (an appellate court must apply the law in effect at the time it renders its decision). It is also true, however, that 11 ... at times application of this retroactivity precept produces inequitable results, penalizing parties who ordered their affairs in reasonable reliance on a rule of law that was later invalidated. Such inequity is undesirable, not only because of the harm to the party involved, but also because it discourages adherence to contemporary laws. 12 Mineo v. Port Auth. of New York and New Jersey, 779 F.2d 939, 943 (3d Cir.1985), reh'g denied, 783 F.2d 42 (3d Cir.1986) (en banc), cert. denied, 478 U.S. 1005, 106 S.Ct. 3297, 92 L.Ed.2d 712 (1986). We agree that retroactive application would be inappropriate in this case. 13 Decisions that are to be applied only prospectively must satisfy the three-pronged test set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). Under Chevron, the decision to be applied only prospectively must: 14 1) establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolution was not clearly foreshadowed; 15 2) state a rule whose retrospective operation will retard more than further its operation, considering the rule's prior history and its purpose and effect; 16 3) be a decision whose retroactive application could produce substantial inequitable results, and for which a holding of nonretroactivity would avoid injustice or hardship. 17 Id. at 106-07, 92 S.Ct. at 355. 18 We conclude that application of the Chevron factors mandates that Garcia not be applied retroactively. Without question, the first prong weighs against retroactive application. Following in the wake of the 1974 FLSA amendments and National League of Cities, Garcia was anything but an issue of first impression. And while National League of Cities was a vigorously criticized decision, Garcia 's holding cannot be said to have been clearly foreshadowed. See Kartevold, 625 F.Supp. at 1556-57. More important, Garcia overruled clear past precedent. It expressly reversed National League of Cities, which had specified that the FLSA did not apply to police, firefighters, and other traditional function employees. 19 The second prong presents a less clear answer. It is true that the FLSA should be read broadly to accomplish its remedial objectives. Kartevold, 625 F.Supp. at 1557 (citing Tony & Susan Alamo Found. v. Secretary of Labor, 471 U.S. 290, 105 S.Ct. 1953, 85 L.Ed.2d 278 (1985)). One might think retroactive application of its protections to all public employees would substantially benefit those the FLSA was intended to help. However, we think it more likely that retroactive application of Garcia here would actually hinder its prospective application because it would wreak havoc on municipal budgeting and create unanticipated financial liability for already strapped municipalities. Brooks v. Village of Lincolnwood, 620 F.Supp. 24, 26 (N.D.Ill.1985). Our assessment coincides with that of Congress, which amended the FLSA to defer[ ] application of the FLSA overtime provisions until exactly one year after the mandate in Garcia so that state and local governments may make necessary adjustments in their work practices, staffing patterns, and fiscal priorities. S.Rep. No. 159, 99th Cong., 1st Sess. 15, reprinted in 1985 U.S.Code Cong. & Admin.News 651, 663. Congress's action was a response to municipalities that had expressed an urgent need for lead-time in which to reorder their budgetary priorities while maintaining fiscal stability. Id. at 8; 1985 U.S.Code Cong. & Admin.News at 656. We note also that, given both Garcia and the 1985 FLSA amendments' clear requirement that state and local governments comply with the Act's provisions, retroactive application of Garcia would be unlikely to effect a higher level of compliance. See Mineo v. Port Authority, 779 F.2d at 945. 20 Third, we find that Garcia would produce substantial inequitable results if applied retroactively. Chevron, 404 U.S. at 107, 92 S.Ct. at 355. This prong is enmeshed with the first. A retroactive application of Garcia would punish the City of Bisbee for structuring its employment contracts according to the clear past precedent that was controlling when the contracts were entered into. [W]hen thousands of public officials across the country ... proceed in good faith to discharge their duty by entering into contractual agreements with their employees and on behalf of their constituency in reasonable reliance upon longstanding precedent, ... to have their efforts declared retrospectively unlawful ... is unfair to the public officials, to their taxpayers, and to the system at large. Kartevold, 625 F.Supp. at 1558-59. In addition, we read the 1985 FLSA amendments as Congress's recognition of the manifest unfairness of conferring liability retroactively. 21 All three prongs of the Chevron test need not be satisfied for a finding of nonretroactivity, since no single prong is dispositive. See Barina v. Gulf Trading and Transp. Co., 726 F.2d 560, 563-64 (9th Cir.1984); Kartevold, 625 F.Supp. at 1557. Here Garcia 's clear satisfaction of the first and third prongs, and probable satisfaction of the second, compels a finding that it should not be applied retroactively to these plaintiffs. Most other courts agree. See Mineo v. Port Authority, 779 F.2d at 946; Kartevold, 625 F.2d at 1559; Thurmond v. City of Union City, Tenn., 628 F.Supp. 146, 148 (W.D.Tenn.1986); Kukla v. Village of Antioch, 647 F.Supp. 799, 815-16 (N.D.Ill.1986); Brooks v. Village of Lincolnwood, 620 F.Supp. at 26. 22 The cornerstone of appellants' argument for retroactivity is the district court opinion in Joiner v. City of Macon, 627 F.Supp. 1532 (M.D.Ga.1986), reversed in part on other grounds, 814 F.2d 1537 (11th Cir.1987). Joiner, however, is inapposite. The district court in Joiner rejected a Chevron analysis because the City of Macon's liability to its public transit workers was founded on a consistent history of application of FLSA to publicly-owned mass transit workers as nontraditional employees under National League of Cities, see Alewine v. City Council of Augusta, Georgia, 699 F.2d 1060, 1069 (11th Cir.1983), cert. denied sub nom. City of Macon v. Joiner, 470 U.S. 1027, 105 S.Ct. 1391, 84 L.Ed.2d 781 (1985), so that Garcia did not constitute a clear break with past precedent. Joiner, 627 F.Supp. at 1536-37. In other words, Macon's public transit workers were already covered by FLSA prior to Garcia. Thus, retroactive application of Garcia was unnecessary to Joiner 's holding. 23 Appellants also direct our attention to Judge Becker's arguments in Mineo against Garcia 's satisfaction of Chevron nonretroactivity. 779 F.2d at 951 (Becker, J., dissenting). However, those arguments are inapplicable to the case at bar. Like Joiner, Mineo presented the question whether the plaintiff employees were engaged in a state's traditional governmental function. Judge Becker's main argument was that Garcia failed the first prong--it did not overrule clear past precedent on the applicability of the FLSA to Port Authority detectives--because the detectives were arguably public transit employees, thus falling outside National League of Cities' traditional governmental function exception. Id. at 952-53. 24 Judge Becker also found Chevron 's second prong was not met by Garcia. I believe that non-retroactive application of Garcia results in the unseemly spectacle of the court's deciding this case under a pre-existing analytical framework that the Supreme Court has found to be unsound in principle and unworkable in practice. Id. at 954. In response, we simply point out that whatever the failings of the former rule, precipitate application of the new one presents its own difficulties. 25 Plaintiffs also rely on Griffith v. Kentucky, 479 U.S. 314, 107 S.Ct. 708, 93 L.Ed.2d 649 (1987), which held that a new rule of criminal procedure is to be applied retroactively to all pending cases, state or federal. Plaintiffs argue that Griffith 's holding should govern the retroactive application of rules announced in civil cases as well. This claim is utterly baseless. In a footnote to its Griffith opinion, the Supreme Court expressly states that the area of civil retroactivity continues to be governed by the standard announced in Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07 [92 S.Ct. 349, 355, 30 L.Ed.2d 296] (1971). 479 U.S. at 322 n. 8, 107 S.Ct. at 713 n. 8. 26 Because we are persuaded that the City of Bisbee is not liable to its police officers for overtime accrued before Garcia overruled National League of Cities, we affirm the grant of summary judgment against Officer Gojkovich, and against Officer Austin for those hours he claims prior to February 19, 1985, the date Garcia was decided. 27