Opinion ID: 591124
Heading Depth: 2
Heading Rank: 4

Heading: Reconciliation and Application

Text: 62 We might echo Justice Scalia's plea in his Kaiser Aluminum concurrence that the Supreme Court eliminate the confusion of the past two decades and unqualifiedly affirm the principle of construction to be applied in retroactivity cases. 494 U.S. at 858, 110 S.Ct. at 1588 (Scalia, J., concurring); see also Luddington v. Indiana Bell Telephone Co., 966 F.2d 225 (7th Cir.1992) (suggesting that the absence of a clear judicial retroactivity rule may provide an incentive for Congress to avoid addressing whether a new statute will have prospective or retroactive effect). We, however, obviously lack the power to overrule either Bowen or Bradley and therefore must find some principled way to determine which governs the case before us. 63 In our search we find persuasive and illuminating the exposition of Justice Scalia in his separate opinion in Kaiser Aluminum. As we discussed above, that separate opinion detailed how the historic line of Supreme Court decisions logically leads to a conclusion that new statutory law is presumed to apply prospectively except when the statute affirmatively so require[s]. Kaiser Aluminum, 494 U.S. at 844, 110 S.Ct. at 1580. Persuasive as we find this, however, it remains the exposition of a single Justice and cannot overrule Bradley and Thorpe. 64 A further element of authority informing our decisionmaking is prior case law within our Circuit. While we have not spoken to the question of retroactivity of the Civil Rights Act of 1991, we have previously addressed the general retroactivity principle which must govern it. Indeed, one district court within this Circuit has applied our prior teachings to the question of retroactivity of another provision of the 1991 Act. In Van Meter v. Barr, 778 F.Supp. 83, 84-85 (D.D.C.1991), the district court held that the statute applied only prospectively, and further held that this conclusion was compelled by our decisions Alpo Petfoods, Inc. v. Ralston Purina Co., 913 F.2d 958 (D.C.Cir.1990), and Wagner Seed, Inc. v. Bush, 946 F.2d 918 (D.C.Cir.1991). 65 Indeed, the district court's decision in Van Meter was obedient to our language in those cases. In Alpo, as the Van Meter court noted, we stated: 66 Retroactivity is not favored in the law. Thus, congressional enactments and administrative rules will not be construed to have retroactive effect unless their language requires this result. 67 913 F.2d at 964 n. 6 (Thomas, J.) (quoting Bowen v. Georgetown Univ. Hospital, 488 U.S. at 208, 109 S.Ct. at 471). Likewise, in Wagner Seed, we stated that [i]f the presumption against retroactivity is not rebutted by clear terms to the contrary ... then the statute applies only prospectively. 946 F.2d at 924. We cited an array of Supreme Court cases in support of this proposition. The Van Meter district court therefore was on firm ground when it held the presumption against retroactivity to be the law of this Circuit. 68 At first blush, it would appear that we, like the district court in Van Meter, should simply bind ourselves to our prior opinions and declare for Bowen over Bradley. We are, after all, bound by the decisions of prior panels of this Court unless and until overturned by the court en banc or by Higher Authority. Save Our Cumberland Mountains, Inc. v. Hodel, 826 F.2d 43, 54 (D.C.Cir.1987) (Ruth B. Ginsburg, J., concurring). However, for two reasons, we do not deem ourselves to be so completely bound in the present case. First, the quoted language from Alpo Petfoods is candidly dicta. As we stated later in the same footnote, even if we were to apply the Bradley presumption and give the 1988 Act retroactive effect, the substance of our ... analysis would remain the same. 913 F.2d at 964 n. 6. In Wagner Seed, the Bowen analysis is not determinative of the result either, and therefore must be deemed not a holding, but rather a dictum, albeit an exceedingly strong one. 5 Binding circuit law comes only from the holdings of a prior panel, not from its dicta. Cf. United States v. North, 910 F.2d 843, 881 (D.C.Cir.1990) ([w]e are bound only by prior published opinions of this Circuit and not by other means of deciding cases.). 69 Second, even if the language of Alpo Petfoods and Wagner Seed were holdings rather than dicta, we still would be left with the troubling fact that two unreversed decisions of the Higher Authority are contra. Therefore, although we conclude that the language of our prior decisions impels us toward a presumption of prospectivity, we cannot comfortably assert that we are fettered by them to that choice. 70 Thus, the greater weight of authority from the Supreme Court and the existing authority from this Circuit establish that as between the two propositions that statutes presumptively apply to pre-enactment conduct and that they presumptively apply only to post-enactment conduct, the latter prevails. That is, generally congressional enactments and administrative rules will not be construed to have retroactive effect unless their language requires this result. Bowen, 488 U.S. at 208, 109 S.Ct. at 471. In addition to conforming to the longest and largest line of Supreme Court decisions, this has the obvious salutary result that persons may know when they act the legal consequences of their actions.  '[R]etrospective laws are ... generally unjust; and ... neither accord with sound legislation nor with the fundamental principles of the social compact.'  Kaiser Aluminum v. Bonjorno, 494 U.S. at 855-56, 110 S.Ct. at 1587 (Scalia, J., concurring) (quoting J. STORY, COMMENTARIES ON THE CONSTITUTION, § 1398 (1851)). 71 Nonetheless, that leaves us, as an inferior court, with the question of what to do with the presumption stated by Thorpe and Bradley in the highest court. We are not in fact the first circuit to wrestle with this problem. The Fifth, Sixth, Seventh, and Eighth Circuits have already dealt with the question of the retroactivity or prospectivity of the Civil Rights Act of 1991. Fray v. Omaha World Herald Co., 960 F.2d 1370, 1374-78 (8th Cir.1992); Johnson v. Uncle Ben's, Inc., 965 F.2d 1363 (5th Cir.1992); Luddington v. Indiana Bell Telephone Co., 966 F.2d 225 (7th Cir.1992); Mozee v. American Commercial Marine Serv. Co., 963 F.2d 929, 934-38 (7th Cir.1992); and Vogel v. Cincinnati, 959 F.2d 594, 597-98 (6th Cir.1992). All have held, as we do, that the Act does not apply retroactively. 72 In our holding, we are informed, as have been three of our sibling circuits, by the Supreme Court's decision in Bennett v. New Jersey, 470 U.S. 632, 639, 105 S.Ct. 1555, 1560, 84 L.Ed.2d 572 (1985). See Fray, 960 F.2d at 1374; Uncle Ben's, 965 F.2d at 1374; and Mozee, 963 F.2d at 934. 73 In Bennett, the Supreme Court considered a controversy arising from efforts of the United States Secretary of Education to recover from the state of New Jersey federal grant funds allegedly misused during the years 1970-72. The statute governing the grants, 20 U.S.C. § 241(a) et seq. had been amended in 1978. The Third Circuit had held that standards set by the amendments should apply to determine the propriety of expenditures in previous years. New Jersey Department of Education v. Hufstedler, 724 F.2d 34, 36-37 (1983). The Supreme Court reversed, and in doing so, discussed Bradley. The Court noted that Bradley had held a statutory provision for attorney's fees applied retroactively to a fee request that was pending when the statute was enacted. 470 U.S. at 639, 105 S.Ct. at 1560. The Court further noted the Bradley Court's recognition of the general principle that a court must apply the law in effect at the time of its decision.... Id. However, the Bennett Court distinguished Bradley and applied the 1978 amendments prospectively only. It did so offering alternative rationales. First, the Court noted that it 74 has refused to apply an intervening change to a pending action where it has concluded that to do so would infringe upon or deprive a person of a right that had matured or become unconditional. 75 Id. (quoting Bradley, 416 U.S. at 720, 94 S.Ct. at 2020). Further, the Bennett Court discussed the evidence of congressional intent, and noted that it did not appear that Congress intended the substantive standards of the 1978 amendments to apply retroactively. 470 U.S. at 641, 105 S.Ct. at 1561. But most pertinently to the overarching question of the primacy of the Bowen presumption or the Bradley pronouncement, the Bennett Court stated that the limitation quoted above from the Bradley opinion comports with another venerable rule of statutory interpretation, i.e., that statutes affecting substantive rights and liabilities are presumed to have only prospective effect. 470 U.S. at 639, 105 S.Ct. at 1560, citing United States v. Security Industrial Bank, 459 U.S. 70, 79, 103 S.Ct. 407, 413, 74 L.Ed.2d 235 (1982); Greene v. United States, 376 U.S. 149, 160, 84 S.Ct. 615, 621, 11 L.Ed.2d 576 (1964). 76 The Supreme Court in Bennett did not purport to overrule Bradley. But it noted that the Bradley decision concerned allowance of attorney fees, while acknowledging the continued vitality of the venerable rule of statutory interpretation followed in Security Industrial and Greene as applicable to substantive rights and liabilities. 470 U.S. at 639, 105 S.Ct. at 1560. Therefore, we conclude that the Court has given us the basis upon which we must now distinguish the applicability of the two presumptions. The Bowen presumption must apply in the case of changes in substantive law. That being said, and Bradley still apparently being recognized by the Supreme Court, we agree with the Fifth Circuit that the Bradley presumption of applicability of law as of the time of decision must pertain to remedial provision[s]--not substantive obligations or rights under a statute. Uncle Ben's, 965 F.2d at 1374 (citing Bennett, 470 U.S. at 639, 105 S.Ct. at 1560). 77 The provision before the Court in Bradley, as noted in Bennett, applied to a remedy, not to the rights of the parties. The rights of the parties were the same before and after the change. The statutory amendment enlarged only the remedy. Likewise, in Thorpe, the amending statute altered procedural, not substantive, rights. Landlords had the same rights and limitations on eviction of tenants as before, but the required procedures had changed. 6 Not so in the present case. In Johnson v. Uncle Ben's, Inc., the Fifth Circuit stated: 78 Section 101 affects substantive antecedent rights. Under Patterson, § 1981 did not prohibit discrimination in promotions before the enactment of § 101. Section 101 extended § 1981 to such discriminatory conduct. We then presume that § 101 does not apply to conduct that occurred before its enactment, absent clear evidence to the contrary. There is no such clear evidence. 79 965 F.2d at 1374. 80 Likewise here. Under Patterson, § 1981 did not prohibit discrimination in termination of contracts. Gersman v. Group Health Ass'n, Inc., 931 F.2d 1565, 1571. Section 101 extended § 1981 to that discriminatory conduct. Like the Fifth Circuit, we presume that a substantive statutory change such as § 101 does not apply to conduct that occurred before its enactment, absent clear evidence of congressional intent to the contrary. As we demonstrated above, there is no such clear evidence. 81 The fact, stressed by the dissent, that the conduct involved here occurred before the decision in Patterson is of no legal effect. It simply cannot be the law that retroactive application of a statute is governed by whether or not the parties reasonably, but mistakenly, believed that the law at the time of their conduct was what the law later became. One obvious problem with such a rule is that there is no way of determining in most cases what the parties mistakenly believed the law to be at the time of their conduct. Indeed, this is such a case. The dissent states, because the new law was the same as what the parties reasonably understood the law to be before Patterson, there is no reason not to apply § 101 retroactively. Dissent at 908. Our colleague does not, however, explain how she knows what Group Health understood the law to be at the time of its termination of the contract with Gersman. 82 The Fifth Circuit dealt with this same argument in Uncle Ben's, and dispatched it quickly. 83 As a matter of law, the rule announced in Patterson applies retroactively to UBI's conduct in 1974. Lavender v. V. & B. Transmissions & Auto Repair, 897 F.2d 805, 806-07 (5th Cir.1990). Cf. James B. Beam Distilling Co. v. Georgia, --- U.S. ----, 111 S.Ct. 2439, 115 L.Ed.2d 481 (1991). UBI is just as entitled to the preservation of its substantive interests under this rule as litigants whose conduct occurred after Patterson was decided. Any other holding would require unwieldy distinctions between classes of litigants based on the degree to which they relied on the legal regime antedating the Civil Rights Act of 1991. We decline to embark on such an inquiry. 84 965 F.2d at 1374. 85 Other than substituting GHA for UBI and a citation from this Circuit--the original opinion in this case, 931 F.2d at 1565--for Lavender, we merely join the language of our sibling circuit. See also Luddington v. Indiana Bell Telephone Co., 966 F.2d at 229-30. 7 86 Nor do we share our dissenting colleague's apparent conclusion that the Fifth Circuit in Landgraf v. USI Film Products, 968 F.2d 427 (5th Cir.1992), retreated from its application of Bowen in Uncle Ben's. The Uncle Ben's panel concluded as we do today that the Supreme Court in Bennett impels us toward the conclusion that the Bowen presumption of prospective application of statutory amendments, not the Bradley presumption of retroactive application, applies in cases where the substantive law is changed. 965 F.2d at 1372-74. The language quoted from Landgraf by our colleague is not to the contrary. True, Judge Higgenbotham (also the author of the Uncle Ben's decision) did state for the court the measure of manifest injustice under Bradley is not controlled by formal labels of substantive or remedial changes. Instead, we focus on the practical effects the amendments have upon the settled expectations of the parties. Id. 968 F.2d at 433. However, he did so, not in the context of determining which of the two conflicting presumptions applied, but rather to demonstrate that on the facts of the Landgraf case it did not matter. The amendments in question there would apply only prospectively in either event. 87 More specifically, the Landgraf panel was considering at that point whether § 102(a)(3), (b)(3), substantially expanding compensatory and punitive damage awards available in Title VII cases, would apply to pre-Act conduct. As the substantive-remedial distinction drawn in Uncle Ben's might lead to the conclusion that the Bradley presumption in favor of retroactivity would apply, Judge Higgenbotham was pointing out that even if it did, its own built-in exception for manifest injustice would lead to prospective application of the amendment. SUMMARY AND CONCLUSION 88 It is the general rule that substantive statutory amendments do not apply to pre-amendment conduct. This holding is consistent with Bradley and Thorpe, which dealt with remedial and procedural amendments. The present case concerns a substantive amendment and pre-amendment conduct. The rights of the parties must be adjudicated as they were under the law prevailing at the time of the conduct. Therefore, we adopt our prior decision in Gersman v. Group Health Ass'n, Inc., 931 F.2d 1565 (D.C.Cir.1991). The decision of the District Court is 89 Affirmed.