Opinion ID: 1162670
Heading Depth: 1
Heading Rank: 12

Heading: Retroactive vs. Prospective Application.

Text: The City contends the refunds the trial court awarded were based upon an improper retroactive application of the San Telmo and R/L Assocs. decisions which invalidated the HPO. To apply an appellate decision retroactively means to apply its holding to causes of action which arose prior to the announcement of the decision. Retroactive application of the San Telmo and R/L Assocs. decisions, the City submits, would be contrary to this court's decision in National Can Corp. v. Department of Rev., 109 Wn.2d 878, 749 P.2d 1286, appeal dismissed, cert. denied, 486 U.S. 1040 (1988). [6] The Robinsons argue that, to the contrary, the criteria stated by this court in National Can favor the trial court's award of refunds to the plaintiffs in this class action. In National Can, this court held the invalidation of a statutory taxing scheme does not automatically entitle a taxpayer to a refund. Before an HPO refund is allowed in this case, the City submits that under National Can this court must determine whether a refund (requiring retroactive application of the cases invalidating the HPO to the Robinsons' claims) is equitable. Since Washington law does not foreclose an inquiry into prospective application, we turn to the factors enunciated by the United States Supreme Court to determine whether prospective application is to be afforded in this case. National Can, at 881. In making this analysis, the court in National Can utilized the following 3-factor approach: (1) determine whether the decision establishes 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; (2) weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect and whether retrospective operation will further or retard its operation; and (3) weigh the inequity imposed by retroactive application. National Can, at 881 (citing Chevron Oil Co. v. Huson, 404 U.S. 97, 30 L.Ed.2d 296, 92 S.Ct. 349 (1971)). The City contends, citing the Chevron Oil analysis upon which National Can rests, that this case calls for prospective application of both the San Telmo and R/L Assocs. decisions. This is because those decisions established a new principle of law, and (1) this new principle was not clearly foreshadowed, (2) this new principle would not further the purposes of those two cases to apply their rules retrospectively, and (3) retroactive application of this new principle would be inequitable. The Robinsons claim to the contrary that even if applicable, National Can's analysis under the Chevron Oil rule favors retroactive application. The Robinsons argue they are entitled to refunds of payments made pursuant to the HPO, as neither their case nor the San Telmo or R/L Assocs. decisions involved the overruling of clear past precedent. As to purpose, they add that neither the San Telmo nor the R/L Assocs. decisions limited recovery of fees to prospective application only, unlike the decision in National Can. The Robinsons finally argue they would be entitled to refunds even in the absence of the holdings of San Telmo and R/L Assocs., as their suit relied on preexisting law, and note that their suit was filed before this court's decision in R/L Assocs. Both parties to this action agree that the Chevron Oil Co. v. Huson, supra , analysis relied upon in National Can is relevant to our determination of whether the rules of our San Telmo and R/L Assocs. decisions should be applied retroactively. However, the United States Supreme Court has recently limited the Chevron Oil Co. v. Huson, supra , rule regarding retroactive application in the case of James B. Beam Distilling Co. v. Georgia, ___ U.S. ___, 115 L.Ed.2d 481, 111 S.Ct. 2439 (1991).