Opinion ID: 591124
Heading Depth: 2
Heading Rank: 3

Heading: The Conflicting Presumptions

Text: 41 Before attempting to determine which of the apparently conflicting presumptions govern the case before us, we will review at some greater length the two lines of authority. In Bradley v. Richmond School Board, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974), several black plaintiffs had brought an action to compel desegregation of the public schools of Richmond, Virginia. During the progress of the litigation, the school board conceded that the plan under which it had been operating was not constitutional. After further proceedings concerning the remedy, the district court entered a judgment in favor of the plaintiffs, which included a fee award. The school board appealed from the award of fees. 42 Following initial submissions of the case to the Court of Appeals but before its decision, Congress enacted § 718 of the Education Amendments of 1972, 20 U.S.C. § 1617 which granted federal courts authority to award attorneys fees to a prevailing party in a school desegregation case. The Fourth Circuit, noting that no orders were pending or appealable before the district court on the effective date of the statute, ruled that § 718 did not apply to services rendered prior to its effective date. The Supreme Court reversed. 43 In analyzing the retroactivity question, the Bradley Court looked first to the words of Chief Justice Marshall in United States v. Schooner Peggy, 1 Cranch 103, 2 L.Ed. 49 (1801). In that case Marshall had noted for the Court that the general rule is that an appellate court is only to inquire whether a judgment, when rendered, was erroneous or not. Id. at 110 (emphasis supplied). But the Court further noted, if subsequent to the judgment and before the decision of the appellate court, a law intervenes and positively changes the rule which governs, the new law must be obeyed. Id. 44 The Court went on to qualify that obligation, however, by recognizing that [i]t is true that in mere private cases between individuals, a court will and ought to struggle hard against a construction which will, by a retrospective operation, affect the rights of parties.... Id. at 110. But the Schooner Peggy case was not a mere private case between individuals. It involved condemnation following seizure of a French vessel by an American ship. During the pendency of the case on appeal to the Supreme Court from the Circuit, the two nations entered a convention providing in part: 'property captured and not yet definitively condemned, or which may be captured before the exchange of ratification ... shall be mutually restored.'  Bradley, 416 U.S. at 712 n. 16, 94 S.Ct. at 2016 n. 16 (quoting Schooner Peggy, 1 Cranch at 107 (emphasis in Bradley )). This being the case, the Schooner Peggy Court went on to state that in great national concerns, ... the Court must decide according to existing laws, and if it be necessary to set aside a judgment, rightful when rendered, but which cannot be affirmed but in violation of law, the judgment must be set aside. 416 U.S. at 712, 94 S.Ct. at 2016 (quoting Schooner Peggy, 1 Cranch at 110). 45 Obviously, there is some distance between the Schooner Peggy ruling, establishing that the law at the time of the appellate hearing applies in cases of great national concern but is to be struggled against in cases between private parties, and a flat presumption that laws apply retroactively. In bridging that gap, the Bradley Court relied on only one case between the 1801 decision and its own 1974 holding. In that one case, Thorpe v. Housing Authority of Durham, 393 U.S. 268, 89 S.Ct. 518, 21 L.Ed.2d 474 (1969), the Court ruled in more general terms that an appellate court must apply the law in effect at the time it renders the decision. Id. at 281, 89 S.Ct. at 526. 46 In the Thorpe decision, after the plaintiff Municipal Housing Authority had obtained an eviction order from a state court, and after that order had been affirmed by the state supreme court, Housing Authority of Durham v. Thorpe, 267 N.C. 431, 148 S.E.2d 290, cert. granted, 385 U.S. 967, 87 S.Ct. 515, 17 L.Ed.2d 432 (1966), the Department of Housing and Urban Development published a circular ordering new procedural prerequisites for such an eviction. The United States Supreme Court then remanded to the Supreme Court of North Carolina for such further proceedings as [might] be appropriate in the light of the Housing and Urban Development directive. Thorpe v. Housing Authority of Durham, 386 U.S. 670, 673-74, 87 S.Ct. 1244, 1246, 18 L.Ed.2d 394 (1967) (per curiam). The North Carolina Supreme Court reaffirmed its original decision at 271 N.C. 468, 157 S.E.2d 147 (1967), sub. nom. Housing Authority of Durham v. Thorpe. 47 The United States Supreme Court again granted certiorari and this time reached the retroactivity issue. Relying on Schooner Peggy, the Court held that the general rule ... is that an appellate court must apply the law in effect at the time it renders its decision. 393 U.S. at 281, 89 S.Ct. at 526. In its analysis of Thorpe, the Bradley Court reaffirmed that the decision stands for the proposition that even where the intervening law does not explicitly recite that it is to be applied to pending cases, it is to be given recognition and effect. 416 U.S. at 715, 94 S.Ct. at 2018. 48 The Bradley Court went on to note, as we did in our brief discussion above, that this presumption would apply only in the absence of clear legislative direction to the contrary.... 416 U.S. at 715, 94 S.Ct. at 2018. Moreover, it suggested a remaining vitality to Chief Justice Marshall's concern about retroactivity in  'mere private cases between individuals.'  416 U.S. at 718, 94 S.Ct. at 2019 (quoting Schooner Peggy, supra, at 110). The Court also noted possible exceptions to retroactivity in cases where it could cause a party to suffer manifest injustice. 416 U.S. at 716, 94 S.Ct. at 2019 (citing Thorpe, 393 U.S. at 282, 89 S.Ct. at 526 (in turn citing Greene v. United States, 376 U.S. 149, 160, 84 S.Ct. 615, 621, 11 L.Ed.2d 576 (1964))). In expositing its concern for the disruption of the legal relationship between private parties, the Court suggested that possible injustices resulting from retrospective application would include infringement upon or deprivation of a right that had matured or become unconditional. 416 U.S. at 720, 94 S.Ct. at 2020 (citing Greene v. United States, 376 U.S. at 160, 84 S.Ct. at 621). Finally, the Bradley Court implied that such manifest injustice would occur where the retrospective application would impose new and unanticipated obligations ... without notice or an opportunity to be heard. 416 U.S. at 720, 94 S.Ct. at 2021. 49 Appellants argue that none of these exceptions applies and therefore that the Bradley presumption should govern. Unfortunately for appellants (and perhaps for our ease of decision, although the question of the application of the exceptions may not be as simple as appellants assume), that is not the end of the Supreme Court's treatment of the retroactivity question. In Bowen v. Georgetown Univ. Hospital, 488 U.S. 204, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988), the Supreme Court held, [r]etroactivity 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. Id. at 208, 109 S.Ct. at 471. In Bowen, the Secretary of Health and Human Services had promulgated new regulations setting limits on the level of reimbursement allowable for Medicare costs. The Secretary attempted to apply these limitations retroactively. In the language quoted above, the Supreme Court affirmed the Court of Appeals and District Court decisions denying the Secretary's retroactive application. Justice Kennedy, writing for a unanimous Supreme Court, 3 did so without citing either Bradley or Thorpe. 50 The Bowen Court did, however, cite a long line of cases supporting its presumption against retroactivity--a line not overruled in either Bradley or Thorpe. See, e.g., Greene v. United States, 376 U.S. 149, 160, 84 S.Ct. 615, 621, 11 L.Ed.2d 576 (1964) 4 ; Claridge Apartments Co. v. Commissioner, 323 U.S. 141, 164, 65 S.Ct. 172, 185, 89 L.Ed. 139 (1944); Miller v. United States, 294 U.S. 435, 439, 55 S.Ct. 440, 44142, 79 L.Ed. 977 (1935); and United States v. Magnolia Petroleum Co., 276 U.S. 160, 162-63, 48 S.Ct. 236, 237, 72 L.Ed. 509 (1928). 51 To take the oldest from the Bowen Court's list, in the Magnolia Petroleum case, the Supreme Court considered an amendment to the Revenue Act affecting the computation of interest on refunds. The Commissioner of Internal Revenue had calculated interest due based on the statute in effect at the time of the payment. The taxpayer contended that interest should be computed according to the later enactment. In rejecting the taxpayer's contention, the unanimous Supreme Court held, [s]tatutes are not to be given retroactive effect or construed to change the status of claims fixed in accordance with earlier provisions unless the legislative purpose so to do plainly appears. 276 U.S. at 162-63. In support of this proposition, the Magnolia Petroleum Court cited a line of cases dating back to United States v. Heth, 3 Cranch 399, 413, 2 L.Ed. 479 (1806) ([w]ords in a statute ought not to have a retrospective operation, unless they are so clear, strong, and imperative, that no other meaning can be annexed to them, or unless the intention of the legislature cannot be otherwise satisfied.). 52 In fact, as one of our sibling circuits has noted, the principle of legislative prospectivity began with Roman civil law and extended forward through the centuries [of] venerable common law commentators such as Bracton, Cope, Blackstone, and Sir Francis Bacon. Fray v. Omaha World Herald Company, 960 F.2d 1370, 1374 (8th Cir.1992) (citing Smead, The Rule Against Retroactive Legislation: A Basic Principle of Jurisprudence, 20 Minn.L.Rev. 775, 775-81 (1936)). As the Fray Court further noted, prior to the Thorpe decision this was a long and well established principle of American jurisprudence as well.... Id. 53 In fact, the Supreme Court has stated more than once that 54 [T]he first rule of construction is that legislation must be considered as addressed to the future, not to the past ... a retrospective operation will not be given to a statute which interferes with antecedent rights ... unless such be the unequivocal and inflexible import of the terms and the manifest intention of the legislature. 55 Greene v. United States, 376 U.S. at 160, 84 S.Ct. at 621-22 (quoting Union Pacific Railroad Co. v. Laramie Stockyards Co., 231 U.S. 190, 199, 34 S.Ct. 101, 102, 58 L.Ed. 179 (1913)). As the Eighth Circuit noted in Fray, the Supreme Court destabilized this rather settled doctrine in Thorpe ... and again in Bradley.... 960 F.2d at 1374. Unfortunately, as we noted above, the Bradley and Thorpe decisions do not overrule the prospective presumption lines and the Bowen Court neither overrules nor cites Bradley and Thorpe. Thus, the two presumptions continue to exist in apparent inconsistency. 56 The problem posed by the conflicting lines surfaced in Kaiser Aluminum and Chemical Corp. v. Bonjorno, 494 U.S. 827, 110 S.Ct. 1570, 108 L.Ed.2d 842 (1990). There, the Court considered an amendment to 28 U.S.C. § 1961 changing the rate at which post-judgment interest should be calculated passed after the entry of a judgment. Justice O'Connor, for the majority, recognized the two presumptions and the apparent tension between the rule articulated in Bradley  and the generally accepted axiom reaffirmed in Bowen. 494 U.S. at 837, 110 S.Ct. at 1577. The Court nonetheless did not find it necessary to reconcile the two lines of precedent because the Court found clear congressional intention that the amendment to § 1961 was to apply prospectively only. Id. 57 However, four justices of the Court did not find congressional intent to be nearly so clear as did the majority. Justice White, writing for himself and Justices Marshall, Brennan, and Blackmun, determined that the tension between Bradley and Bowen is more apparent than real.... 494 U.S. at 864, 110 S.Ct. at 1591 (White, J., dissenting). In his view--which admittedly we oversimplify--the Bowen presumption applies to prevent  'altering the past legal consequences of past actions.'  Id. at 866, 110 S.Ct. at 1592 (emphasis in original) (quoting Bowen, 488 U.S. at 219, 109 S.Ct. at 477 (Scalia, J., concurring)). The Bradley presumption, on the other hand, is in Justice White's view a choice-of-law rule making it the general practice that changes in law apply to pending cases. Justice White would not apply this choice-of-law rule mechanically, but would examine the status of rights involved and the public interest implicated. 58 Justice Scalia, who joined Justice O'Connor's majority opinion in Kaiser Aluminum, nonetheless wrote separately to treat at length the Bradley- Bowen problem. To him the two lines of cases are not merely ... in 'apparent tension' ... they are in irreconcilable contradiction.... 494 U.S. at 841, 110 S.Ct. at 1579 (Scalia, J., concurring). Justice Scalia's concurrence catalogs at length the history of the presumption against retrospective operation, concluding that [d]uring ... more than 150 years of doctrinal certainty, the Supreme Court denied retroactive application to new statutory law except when the statute affirmatively so required. Id. at 844, 110 S.Ct. at 1580. He then reviewed the Thorpe- Bradley line and argued that those cases misinterpreted and misapplied Schooner Peggy. In Justice Scalia's view, Schooner Peggy stands for the proposition that only when Congress plainly says  that legislation has retroactive effect are courts to depart from the ordinary presumption which courts will 'struggle hard' to apply against retroactivity. Id. at 846-47, 110 S.Ct. at 1582 (emphasis in original) (quoting Thorpe, 393 U.S. at 281, 89 S.Ct. at 526). Without reiterating the entire argument, we note that Justice Scalia set forth a record of 59 (1) An unbroken line of precedent, prior to 1969, applying a presumption that statutes are not retroactive (except for repeal of penal provisions in all cases). (2) In 1969, with Thorpe, a departure from the tradition ... for cases in which the statute has been enacted after initial adjudication. (3) From 1969 to the present, (a) firm adherence to the prior tradition in cases not involving post-adjudication enactment, and (b) the expression of adherence to the new presumption in post-adjudication enactment cases, but with only one case (Bradley, in 1974) where it seemingly produced a difference in outcome.... 60 Id. at 853-54, 110 S.Ct. at 1985-86. 61 It is against this background that we must determine the retroactivity question in the present case.