Opinion ID: 1230026
Heading Depth: 1
Heading Rank: 3

Heading: due process and vested rights

Text: DSHS argues that the trial court erred in ruling the 1991 legislative amendments violate Caritas's due process rights. As explained above, this legislation amended the state DEFRA restrictions to specifically include land. For instance, RCW 74.46.360(4)(a) was amended by changing depreciable assets to land or depreciable assets and depreciation base of assets to cost basis or depreciation base of assets. Laws of 1991, 1st Sp. Sess., ch. 8, § 18. Due process is violated if the retroactive application of a statute deprives an individual of a vested right. In re Marriage of MacDonald, 104 Wn.2d 745, 750, 709 P.2d 1196 (1985) (citing Lynch v. United States, 292 U.S. 571, 576-80, 78 L.Ed. 1434, 54 S.Ct. 840 (1934)). See also Laurence H. Tribe, American Constitutional Law 587 (2d ed. 1988) (We deal here with the idea that government must respect `vested rights' in property and contract  that certain settled expectations of a focused and crystallized sort should be secure against governmental disruption, at least without appropriate compensation.). The only element at issue is whether Caritas had a vested right in the pre-amendment reimbursement methodology. A vested right entitled to protection under the due process clause: must be something more than a mere expectation based upon an anticipated continuance of the existing law; it must have become a title, legal or equitable, to the present or future enjoyment of property, a demand, or a legal exemption from a demand by another. MacDonald, 104 Wn.2d at 750 (quoting Godfrey v. State, 84 Wn.2d 959, 963, 530 P.2d 630 (1975)). [21] The Superior Court held that Caritas had a vested right to reimbursement based on the formula for calculating payment that existed at the time the services were performed. It is true that Caritas had no vested right in a specific reimbursement beyond the 1-year period of the renewable contracts, since the statutes provided for yearly changes in the reimbursement formula. But once Caritas performed its services pursuant to the contract, which included a specific formula for reimbursement, its right to reimbursement became something more than a mere expectation. [22] DSHS points to yet another reservation of powers clause, one that specifically addresses the issue of vested rights. The legislature reserves the right to amend or repeal all or any part of this chapter [subchapter] at any time and there shall be no vested private right of any kind against such amendment or repeal. RCW 74.09.780. Yet this provision facially applies only to prospective legislative amendments, and means only that no provider has a vested right against any prospective change in the reimbursement system. Its failure to explicitly mention retroactively effective changes is fatal under the rule announced in Carlstrom. In any case, even an explicit reservation of state power against vested rights would not automatically pass muster under the due process clause. Undoubtedly, whatever is reserved of state power must be consistent with the fair intent of the constitutional limitation of that power.  Moreover, the scope of the State's reserved power depends on the nature of the contractual relationship with which the challenged law conflicts. (Citation omitted. Italics ours.) United States Trust Co., 431 U.S. at 21-22. We find that the retroactive amendments deprived Caritas of vested rights protected by the due process clause.