Opinion ID: 2609273
Heading Depth: 1
Heading Rank: 2

Heading: prospective overruling

Text: Since the effect of our overruling of the Gruen case is prospective only and does not jeopardize the massive contractual and governmental enterprises done under its protective shield, we should discuss to some extent this perhaps novel, but well-established, principle of law. We wish that we could view our role as judges with the Olympian detachment expressed by the ancient writers who, when called upon to overturn a decison, could indulge the philosophy that, since judges did not make but simply found the law, the overruled decision was not and never had been the law. This classic doctrine, coming to light in the search for the very origins of judicial power, became known as the declaratory theory. [4] Under the declaratory theory, judges do not make the law, but declare it; a judicial decision merely asserts a principle that is and always has been. It follows then, under the declaratory theory, that an overruled decision is not merely poor law, nor bad law, nor erroneous law, but rather that it has never been the law. What is overruled is not the law, but nonlaw. Whereupon, if one accepts this ancient declaratory doctrine, it follows further that, since the overruling decision does not overturn the law nor substitute a better rule for a bad one, the overruling decision must be held to be retroactive in operation to square with the declaratory theory that it declares what always has been the law. [5] To overrule Gruen, we need not revive the ancient polemics on the origins of judicial power, but rather our aim is to show that stare decisis is dependent neither upon the declaratory theory of the early writers nor does it require retroactive operation of all overruling decisions. [6] Adherence to precedent is the nucleus of our judicial system; it binds the whole to all its parts and the parts to each other. Sometimes this concept is called stare decisis. [2] Through stare decisis, the law has become a disciplined art  perhaps even a science  deriving balance, form and symmetry from this force which holds the components together. It makes for stability and permanence, and these, in turn, imply that a rule once declared is and shall be the law. Stare decisis likewise holds the courts of the land together, making them a system of justice, giving them unity and purpose, so that the decisions of the courts of last resort are held to be binding on all others. Without stare decisis, the law ceases to be a system; it becomes instead a formless mass of unrelated rules, policies, declarations and assertions  a kind of amorphous creed yielding to and wielded by them who administer it. Take away stare decisis, and what is left may have force, but it will not be law. Yet there is another impelling reason, frequently overlooked, for stare decisis. The very ideal of equal justice under law, and the aspiration that one man shall be treated exactly like every other man under the same circumstances depends upon it. One has a right to know that the rules which govern him and his fellows today are a safe guide for his conduct tomorrow. And, curiously enough, though the ideals of uniformity and equality pervade the law, in part by means of stare decisis, it is here that the doctrine of prospective overruling enters. To be uniformly applied, and equally administered, the rules of law should be both just and adaptable to the society they govern. A bad law uniformly administered is equally unjust and uniformly bad. If a rule laid down by the courts proves in time to be a bad one, applying the bad rule evenly does not provide equal justice for all. It may be equal, but it will not be justice. And courts are instituted among men to do justice between them, and between men and their government. So, to do justice, courts have devised a means of getting rid of bad rules, yet, at the same time, preserving stare decisis. Rules of law, like governments, should not be changed for light or transient causes; but, when time and events prove the need for a change, changed they must be. If rights have vested under a faulty rule, or a constitution misinterpreted, or a statute misconstrued, or where, as here, subsequent events demonstrate a ruling to be in error, prospective overruling becomes a logical and integral part of stare decisis by enabling the courts to right a wrong without doing more injustice than is sought to be corrected. By means of this doctrine, courts of the most prudent and careful tradition can move boldly to right the very wrong they have been traditionally perpetuating under the old, rigidly-applied, single-minded view of the doctrine of stare decisis. The courts can act to do that which ought to be done, free from the fear that the law itself is being undone. And prospective overruling has yet another virtue hitherto unnoticed; it tends to stay the courts from engaging in pedantic exercises by freeing them from the heavy hand of the old declaratory theory of stare decisis. Under prospective overruling, courts need not strive for distinctions where none exist in order to escape the implications of a bad rule. Better to overrule a case flatly, and say so, giving the overruling decision prospective effect, than attain the same end through sophistry and evasion. In the long run, a search for distinctions, where there are no real differences, in order to bring a case to a just conclusion, contributes more to uncertainty in the law than does an outright reversal of policy and cancels two of the things upon which the law depends  reason and experience. A study of the cases and authorities will, we think, bear this out. The idea of a prospective overruling of precedent is not recent, but has been applied in effect without a label for more than a century. Of historic interest is a series of cases coming from Mississippi in the 1840's, arising from suits on notes given as consideration for the purchase of slaves ( Groves v. Slaughter, 40 U.S. 286 (15 Peters 449) 10 L.Ed. 800 (1841)), after the adoption in 1832 of a constitutional provision prohibiting the introduction of slaves into Mississippi as merchandise or for sale after May 1, 1833. The Supreme Court of the United States, affirming what it considered to be the decisions of the Mississippi Supreme Court, upheld the notes as valid in the Groves case, supra, despite the possible illegality of the transaction. A few years later, the identical problem came before the Supreme Court in Rowan v. Runnels, 46 U.S. 158 (5 Howard 134) 12 L.Ed. 85 (1847), from Mississippi, but it appeared that, in the meanwhile, the Mississippi Supreme Court had changed its views from those indicated in Groves v. Slaughter, supra , and had subsequently held contracts for the sale of imported slaves to be illegal and notes given in purchase of such slaves void. Anticipating the doctrine of prospective overruling, the Supreme Court in an opinion by Chief Justice Taney said: ... Undoubtedly this court will always feel itself bound to respect the decisions of the State courts, and from the time they are made will regard them as conclusive in all cases upon the construction of their own constitution and laws. But we ought not to give to them a retroactive effect, and allow them to render invalid contracts entered into with citizens of other States, which in the judgment of this court were lawfully made.... Rowan v. Runnels, supra . And the United States Supreme Court amplified this statement in Ohio Life Ins. & Trust Co. v. Debolt, 57 U.S. 442 (16 Howard 416) 14 L.Ed. 997 (1853), when, in referring directly to Rowan v. Runnels, supra , it pointed out that the doctrine of that case would apply with equal force to contracts between citizens of the same state as well as with citizens of different states. Indeed, the duty imposed upon this court to enforce contracts honestly and legally made, would be vain and nugatory, if we were bound to follow those changes in judicial decisions which the lapse of time, and the change in judicial officers, will often produce. The writ of error to a State court would be no protection to a contract, if we were bound to follow the judgment which the State court had given, and which the writ of error brings up for revision here. And the sound and true rule is, that if the contract when made was valid by the laws of the State, as then expounded by all the departments of its government, and administered in its courts of justice, its validity and obligation cannot be impaired by any subsequent act of the legislature of the State, or decision of its courts, altering the construction of the law. Ohio Life Ins. & Trust Co. v. Debolt, supra . In this fashion, the supreme court anticipated the doctrine of prospective overruling by giving prospective effect only to the overruling decisions of the state courts, yet all the while declaring the decisions of those courts to be the final expressions of the law on the peculiar subjects involved. Perhaps the most important case in the evolution of the doctrine of prospective overruling is the opinion of Justice Cardozo in Great Northern R. Co. v. Sunburst Oil & Refining Co., 287 U.S. 358, 77 L.Ed. 360, 53 S.Ct. 145, 85 A.L.R. 254 (1932). We are not concerned here with the constitutional aspects of that decision, but only with the legal effect of an overruling decision. In 1921, the Supreme Court of Montana in Doney v. Northern Pac. R. Co., 60 Mont. 209, 199 Pac. 432, had held that a shipper could recover excessive freight charges where the tariffs were found to be unreasonable, even though the Montana Board of Railroad Commissioners, empowered by law, had fixed and published the freight tariffs. Several years later, the Supreme Court of Montana in two decisions, Montana Horse Products Co. v. Great Northern R. Co., 91 Mont. 194, 7 P. (2d) 919, and Sunburst Oil & Refining Co. v. Great Northern R. Co., 91 Mont. 216, 7 P. (2d) 927, overruled the Doney case, supra, but reserved the effect of the overruling decisions to future shipments only. The Doney case was expressly declared to be the law as to all shipments made during the period of its reign, for all persons who had acted under it. The effect of the decisions overruling it would, accordingly, be prospective only in most instances, and the shipper was allowed recovery for unreasonably excessive charges assessed and paid under the official tariff schedules, though the decisions of the Montana Supreme Court made it clear on rehearing that recovery would be denied in such cases in the future. Sunburst Oil & Refining Co. v. Great Northern R. Co., supra . The Supreme Court of the United States, in upholding the doctrine of prospective overruling had this to say: ... This is a case where a court has refused to make its ruling retroactive, and the novel stand is taken that the constitution of the United States is infringed by the refusal. We think the federal constitution has no voice upon the subject. A state in defining the limits of adherence to precedent may make a choice for itself between the principle of forward operation and that of relation backward. It may say that decisions of its highest court, though later overruled, are law none the less for intermediate transactions.... The common law as administered by her judges ascribes to the decisions of her highest court a power to bind and loose that is unextinguished, for intermediate transactions, by a decision overruling them. As applied to such transactions we may say of the earlier decision that it has not been overruled at all. It has been translated into a judgment of affirmance and recognized as law anew. Accompanying the recognition is a prophecy, which may or may not be realized in conduct, that transactions arising in the future will be governed by a different rule. If this is the common law doctrine of adherence to precedent as understood and enforced by the courts of Montana, we are not at liberty, for anything contained in the constitution of the United States, to thrust upon those courts a different conception either of the binding force of precedent or of the meaning of the judicial process. Great Northern R. Co. v. Sunburst Oil & Refining Co., supra . We note that the doctrine had not yet attained full vigor but was still geared to the concept that the overruling in futuro was in some way connected with the idea that it was more a prophecy of what the law would be in the future, than a declaration of a rule of law. Not so the doctrine today. We no longer need measure the niceties of stare decisis which heretofore have characterized adherence to precedent. The doctrine of prospective overruling is confirmed and Great Northern R. Co. v. Sunburst Oil & Refining Co., supra , is cited with approval in Garner v. Louisiana, 368 U.S. 157, 7 L.Ed. (2d) 207, 82, S.Ct. 248 (1961). Experience and reason have combined to cut away the strictures binding the doctrine to the declaratory theory, and, thus liberated, it is now revealed to us as a true component of stare decisis. For example, the Supreme Court of Wisconsin, after tracing the doctrine of governmental immunity of cities and towns in tort actions in Holytz v. Milwaukee, 17 Wis. (2d) 26, 115 N.W. (2d) 618 (1962), an immunity first declared by that court in 1873, found the immunity doctrine to be faulty and erroneous and not supported by the historic reasons claimed for it, and, accordingly, overruled a long line of cases. Yet, to avoid working an unjust hardship on municipalities, the court expressly made the overruling decision prospective in operation as of a day certain in the following language: To enable the various public bodies to make financial arrangements to meet the new liability implicit in this holding, the effective date of the abolition of the rule of governmental immunity for torts shall be July 15, 1962.... The new rule shall not apply to torts occurring before July 15, 1962.... The same doctrine of prospective overruling was applied with respect to the immunity of charitable hospitals in Kojis v. Doctors Hospital, 12 Wis. (2d) 367, 107 N.W. (2d) 292 (1961). Likewise, the Supreme Court of Illinois held the doctrine of prospective overruling compatible with stare decisis when it overturned the long-standing immunity of school districts to liability for torts in Molitor v. Kaneland Community Unit Dist. No. 302, 18 Ill. (2d) 11, 163 N.E. (2d) 89 (1960), and made the operation of the overruling decision prospective. To the same effect is City of Fairbanks v. Schaible, 375 P. (2d) 201 (Alaska, 1962). That elemental justice forces prospective overruling in many cases is evident from the case of Florida Forest & Park Ser. v. Strickland, 154 Fla. 472, 18 So. (2d) 251 (1944). There the plaintiff, a workman, was wounded on the job by a fellow employee and sought compensation under the Florida Workmen's Compensation Act. His claim was denied by a deputy commissioner and he appealed. During the course of the appeal, the Supreme Court of Florida handed down a decision ( Tigertail Quarries, Inc. v. Ward, 154 Fla. 122, 16 So. 812 (1944)), holding that an appeal from the order of an individual deputy commissioner did not lie  only the orders of the full commissioner were appealable  and expressly overruling the case of Johnson v. Midland Constructors, 150 Fla. 353, 7 So. (2d) 449 (1942), which had held otherwise. Holding that even though the overruling decision had not fixed the time of its taking effect, the court said: Ordinarily, a decision of a court of last resort overruling a former decision is retrospective as well as prospective in its operation, unless specifically declared by the opinion to have a prospective effect only.... To this rule, however, there is a certain well-recognized exception that where a statute has received a given construction by a court of supreme jurisdiction and property or contract rights have been acquired under and in accordance with such construction, such rights should not be destroyed by giving to a subsequent overruling decision a retrospective operation.... Florida Forest & Park Ser. v. Strickland, supra . That decisions will be given prospective effect in the field of ad valorem taxation is shown in Southern Pac. Co. v. Cochise Cy., 92 Ariz. 395, 377 P. (2d) 770 (1963), where the plaintiff railroad claimed that its properties were assessed by the State Tax Commission at 89 per cent of market value, whereas other property in the state was assessed at 20 per cent of market value. In a decision upholding the railroad's claim, the court, nevertheless, found it necessary to give future effect only to its ruling, when it said: We take judicial notice that the taxing subdivisions of the state have long predicated their fiscal affairs upon the practices alleged in appellant's complaint. For example, school districts have been organized and have issued bonds for capital improvements pursuant to the authority granted by the Constitution ... in anticipation of continued revenues derived from the taxation practices now complained of.... ... The principle that the decision will be made prospective only is not unknown. Where judicial interpretations of taxing acts have been overruled resulting in hardship, we have not hesitated to direct the decison to the future only.... Accordingly, the relief granted commenced with the taxable year next ensuing. This view on prospective overruling is directly supported in Button v. Drake, 302 Ky. 517, 195 S.W. (2d) 66, 167 A.L.R. 1046 (1946), and Commonwealth v. Whitelaw, 302 Ky. 526, 195 S.W. (2d) 71 (1946). And the doctrine is well known, too, in probate law. In Phillips Exeter Academy v. Gleason, 102 N.H. 369, 157 A. (2d) 769 (1960), it is said: When a decision overrules earlier precedents it may be given retroactive effect but there is no constitutional requirement that it must be. Great Northern Ry. Co. v. Sunburst Co., 287 U.S. 358; Opinion of the Justices, 95 N.H. 533, 536. Particularly in probate matters where previous decisions are overruled this jurisdiction has frequently stated that the overruling decision will not be applied retroactively to the detriment of those who had previously relied on the former decisions.... For a declaration of a similar rule in the area of criminal law, see Commonwealth ex rel. Almeida v. Rundle, 409 Pa. 460, 187 A. (2d) 266 (1963). In a decision which places strong emphasis on stare decisis, the Supreme Court of California said, in a case involving the question of procedural timeliness, that in an overruling decision matters of procedure would have to be prospective in operation so as to preserve the remedy to parties litigant who acted under the overruled decision. This holding was based on the reason that fairness alone induced the result. Auto Equity Sales v. Superior Court of Santa Clara Cy., 20 Cal. Rptr. 321, 369 P. (2d) 937 (1962). So it is that the doctrine of prospective overruling has attached in many areas: in constitutional law, contracts, torts, criminal law, taxation, and in the field of procedure, giving the doctrine both sanction and acceptance throughout our jurisprudence. Prospective overruling imparts that final degree of resilience, to the otherwise rigid concepts of stare decisis, so necessary to prevent the system from becoming brittle. It enables the law under stare decisis to grow and change to meet the ever-changing needs of an ever-changing society and yet, at once, to preserve the very society which gives it shape. It follows, then, that to overrule Gruen v. State Tax Comm. supra , prospectively makes good sense and good law. [3] To give precise definition to our ruling here, and by way of summary, we now declare that Gruen v. State Tax Comm. 35 Wn. (2d) 1, 211 P. (2d) 651 (1949), erroneously allowed the state to exceed the debt limitation of $400,000 fixed by Article 8 of the Constitution of the State of Washington; the case is overruled prospectively, and the overruling is not retroactive; the bonds issued and to be issued and sold pursuant to Laws of 1961, Ex. Ses., chapter 3, p. 2521, and Laws of 1961, Ex. Ses., chapter 23, p. 2656, are lawful and valid and shall be issued in accordance with the terms of the statutes authorizing them; all bonds authorized by preceding sessions of the legislature under Gruen are valid; limited obligation bonds authorized by Laws of 1963, Ex. Ses., chapter 26 (Senate Bill No. 9), do not come within the Gruen v. State Tax Comm., 35 Wn. (2d) 1, 211 P. (2d) 651 (1949), ruling, and will, therefore, put the state in debt beyond its constitutional debt limit, and, accordingly, § 8 of the act (Laws of 1963, Ex. Ses., chapter 26 (Senate Bill No. 9)) providing for submission to a vote of the people should be invoked. The writ of mandamus will issue, directing the State Treasurer to complete the issuance and sale of the bonds authorized by Laws of 1961, Ex. Ses., chapter 3, p. 2521, and Laws of 1961, Ex. Ses., chapter 23, p. 2656. It is so ordered. OTT, C.J., FINLEY, WEAVER, ROSELLINI, HUNTER, and HAMILTON, JJ., concur. HILL, J., (concurring specially) I am in complete accord with the majority opinion in its determination that the Gruen case [7] is overruled insofar as it purports to hold that no state debt is incurred by the issuance and sale of limited obligation bonds if they are to be paid from excise taxes. I agree further that the overruling of the Gruen case, and its theory of what constitutes a debt, cannot be permitted to operate retroactively, and that bonds heretofore issued and sold in reliance upon that decision are valid and must be paid. I also agree that, under certain circumstances, bonds, authorized in reliance upon that decision and not yet issued and sold, may be issued and sold. The state should fulfill its commitments made in reliance on that decision. I would limit the issuance and sale of Public School Plant Facilities Bonds to an amount necessary to enable the state to fulfill its commitments to school districts which have commenced construction, using their available funds in reliance upon such commitments, to make possible the completion of their projects. I would limit the issuance and sale of Capitol Improvement Project Bonds to an amount necessary to enable the state to fulfill its existing commitments on projects now under way. It is my view, therefore, that the Writ of Mandamus to the State Treasurer should be limited to directing him to