Opinion ID: 699520
Heading Depth: 3
Heading Rank: 1

Heading: Beam, Harper, and Hyde

Text: 28 In Beam the Supreme Court considered whether a rule of law newly announced in a judicial decision must be applied retroactively to claims arising on facts antedating that decision. 501 U.S. at 532, 111 S.Ct. at 2441. Noting that both parties before the Court had assumed that Chevron Oil permitted exceptions to the rule of retroactive application in civil cases, Justice Souter (joined by Justice Stevens) concluded that Chevron Oil did not provide an answer. Id. at 537-39, 111 S.Ct. at 2444-45. He pointed out that Chevron Oil had been a case with no retroactive application at all--the new rule announced therein was applied neither to that case nor to others involving conduct or events occurring prior to the announcement of the new rule--and determined that the selectively retroactive application of a judicial decision never [had] been endorsed in the civil context. Id. 29 Concluding that selective retroactivity breaches the principle that litigants in similar situations should be treated the same, a fundamental component of stare decisis and the rule of law generally, id. at 537-38, 111 S.Ct. at 2444, and invoking the nature of precedent, as a necessary component of any system that aspires to fairness and equality,id. at 543, 111 S.Ct. at 2447, Justice Souter held that it was error to refuse to apply a rule of federal law retroactively after the case announcing the rule has already done so. Id. at 540, 111 S.Ct. at 2446. Four other Justices concurred separately in that view. See id. at 544, 111 S.Ct. at 2448 (White J., concurring in the judgment); id. at 547, 111 S.Ct. at 2449-50 (Blackmun J., joined by Marshall J. and Scalia, J., concurring in the judgment); id. at 548, 111 S.Ct. at 2450 (Scalia J., joined by Marshall J. and Blackmun J., concurring in the judgment). 30 Nonetheless, Justice Souter did leave open the possibility that a court might, as a remedial matter, decline to apply a judicial decision retroactively. In his view, retroactivity as a remedial matter presents a different question than does retroactivity as a choice of law matter (referring here to the choice between the new and the old rule). Id. at 538-39, 111 S.Ct. at 2444-45. Justice Souter specifically reserved judgment on the question whether a court might simultaneously apply a decision retroactively yet relieve the adverse party of its full consequences, based upon the equities of its particular case. See id. (respondent [may] demonstrate reliance interests entitled to consideration in determining the nature of the remedy that must be provided ...). Indeed, the result in Beam highlights the distinction between choice-of-law and remedy: the Court held a Georgia tax law unconstitutional based upon the retroactive application of a recent Court decision, but expressed no opinion upon the question whether the plaintiff was entitled to a refund of the taxes it had already paid. Although none of the Justices concurring in the judgment of the Court commented separately upon Justice Souter's distinction between retroactivity as a choice-of-law and as a remedial issue, their joining in the judgment remanding the case for a determination of the proper remedy at least suggests that Chevron Oil may have had some continuing role to play as a remedial doctrine. 31 Two years later, however, in Harper the Supreme Court solidified its position, holding that the Court's application of a rule of federal law to the parties before [it] requires every court to give retroactive effect to that decision. --- U.S. at ----, 113 S.Ct. at 2513. Noting that Justice Souter's view of retroactivity [in Beam ] superseded 'any claim based on a Chevron Oil analysis,'  the Court held that a rule of federal law, once announced and applied to the parties to the controversy, must be given full retroactive effect by all courts adjudicating federal law. Id. at ----, 113 S.Ct. at 2517. 32 Nonetheless, the Court still did not make entirely clear (1) whether it adhered to Justice Souter's distinction between retroactivity as a choice-of-law and as a remedial question and (2) if it did, whether Chevron Oil had any continuing validity. On the one hand, the Court clearly held that the federal law applicable to a particular case does not turn on whether litigants actually relied on an old rule or how they would suffer from retroactive application of a new one, thereby suggesting that reliance interests are irrelevant, presumably even at the remedial stage. See id. at ---- n. 9, 113 S.Ct. at 2516 n. 9. On the other hand, the Court declined to decide whether Chevron Oil represented a true choice-of-law principle or merely a remedial principle for the exercise of equitable discretion by federal courts, and thus it did not expressly overrule that case. Id. 33 Moreover, the outcome of Harper suggested that the distinction between remedy and choice-of-law was alive and well: Reversing the decision of the Supreme Court of Virginia holding that Chevron Oil countenanced its failure to apply the U.S. Supreme Court's earlier decision to the later plaintiff, the Court nevertheless declined to order that the amounts paid under the unconstitutional tax be refunded, leaving to Virginia courts ... the crafting of any appropriate remedy. Id. at ----, 113 S.Ct. at 2520. 34 Harper was the Supreme Court's last word on retroactivity prior to the Commission's issuance of the Third and Fourth Orders. As noted above, the Commission concluded in the Third Order that Chevron Oil survived as a remedial doctrine under which it could grant relief to a party that had acted in reliance upon the law as it stood prior to our decision supposedly announcing a new rule of law. While that conclusion is perhaps understandable after Harper, it is untenable in light of the Court's subsequent decision in Reynoldsville Casket Co. v. Hyde, --- U.S. ----, 115 S.Ct. 1745, 131 L.Ed.2d 820 (1995), which was issued only after the oral argument in this case. 35 In Hyde, the Supreme Court clearly held that retroactive application of a judicial decision cannot, except in certain limited and specifically defined circumstances, be blunted at the remedial stage. The plaintiff in Hyde acknowledged that her case was governed by Harper and that a prior decision of the Supreme Court had retroactively invalidated the tolling provision that [made] her suit timely. Id. at ----, 115 S.Ct. at 1748. She nevertheless asked the Court to allow her suit to go forward, not[ing] the possibility of recharacterizing Chevron Oil as a case in which the Court simply took reliance interests into account in tailoring an appropriate remedy for a violation of federal law. Id. 36 The Court, per Justice Breyer, squarely rejected that argument: 37 [W]e do not see how ... the Ohio Supreme Court could change a legal outcome that federal law ... would otherwise dictate simply by calling its refusal to apply that federal law an effort to create a remedy. 38 Id. at ----, 115 S.Ct. at 1749. The Court then noted that the plaintiff's reliance interest was of the same kind and degree as that involved in Chevron Oil, and asked rhetorically: 39 If Harper has anything more than symbolic significance, how could virtually identical reliance, without more, prove sufficient to permit a virtually identical denial simply because it is a denial based on remedy rather than non-retroactivity? Id. 40 In Hyde, the Court clearly holds that Chevron Oil does not allow a court to depart, even at the remedial stage, from the rule of Harper requiring that a judicial decision be applied retroactively. Instead, where Harper is applicable, a remedy other than retroactive application of a prior decision can be awarded only in four specific circumstances: 41 [A] court may find (1) an alternative way of curing the constitutional violation, (2) a previously existing, independent legal basis (having nothing to do with retroactivity) for denying relief, or (3) as in the law of qualified immunity, a well-established legal rule that trumps the new rule of law, which general rule reflects both reliance interests and other significant policy justifications, or (4) a principle of law ... that limits the principle of retroactivity itself. 42 Id. at ----, 115 S.Ct. at 1751. Thus, to the extent that a court may, after Hyde, still depart from the norm of retroactive application based upon a party's reliance interest, its authority to do so has been limited to the most compelling circumstances. See Ryder v. United States, --- U.S. ----, ---- - ----, 115 S.Ct. 2031, 2036-37, 132 L.Ed.2d 136 (1995) (whatever the continuing validity of Chevron Oil after [Harper ] and [Hyde ], there is not the sort of grave disruption or inequity involved in awarding retrospective relief to this petitioner that would bring that doctrine into play). Hence, if Harper is applicable here, then we do not need to consider whether the Commission properly applied Chevron Oil; we need only consider whether any of the four circumstances identified in Hyde might apply here. 43