Opinion ID: 1879728
Heading Depth: 1
Heading Rank: 1

Heading: retroactive/prospective analysis

Text: In my view, the trial court erred in not addressing the retroactive versus prospective application issue, rather than merely ruling that the Walz decision was statutorily abrogated. The majority compounds the error through its flawed analysis of that issue. [1] In my opinion, the trial court's judgment should be affirmed on the basis of a prospective application of Walz v. City of Hudson, 327 N.W.2d 120 (S.D.1982). A chronology of events demonstrates my rationale. In 1976, in Griffin v. Sebek, 90 S.D. 692, 245 N.W.2d 481, this court held that no common law dram shop action (and impliedly, no statutory cause of action) existed in this state. The plaintiff herein was injured on July 24, 1982. On December 15, 1982, (five months after plaintiff's injuries) this court handed down Walz, recognizing for the first time a statutory law dram shop cause of action. Subsequently, the legislature amended the statutes as indicated in the majority opinion. Certainly Walz cannot and should not be given a retroactive application for all injuries incurred prior to its issuance. First of all, the majority claims that Walz did not overrule prior settled law, as there was no prior settled law construing civil liability under SDCL 32-4-78(2). I disagree. As noted by Justice Morgan in his special concurrence in Walz, although the interpretation of SDCL 35-4-78(2) was not adopted by the majority in Griffin, its mention implies that it was considered. Furthermore, footnote 3 of the Griffin majority opinion indicates that the court did not wish to interpret SDCL 35-4-78 as the Walz court subsequently did. That footnote states: In a very recent decision of the Nebraska Supreme Court, Holmes v. Circo, 1976, 196 Neb. 496, 244 N.W.2d 65, Justice Brodkey, the writer thereof, has reviewed not only that state's legislative history but has also cited several decisions construing statutes which were similar to the Nebraska statute 53-180, R.R.S.1943, and which are not unlike SDCL 35-4-78. The Nebraska court also considered the landmark cases of Waynick v. Chicago's Last Dept. Store, 1959, 7 Cir., 269 F.2d 322, 77 A.L.R.2d 1260 and Rappaport v. Nichols., 1959, 31 N.J. 188, 156 A.2d 1 in relation to their statutes and decisions and have, by that process, arrived at the same conclusion reached by this court. (Emphasis added.) Griffin at 486. Thus, Justice Morgan (and Justice Wollman, on other grounds) was correct in stating that the Walz decision should apply only to the plaintiff therein and to those causes of action occurring on and after the date of the remittitur in the case. See also Lewis v. State, 256 N.W.2d 181 (Iowa 1977); City of Sioux Falls v. Mini-Kota Art Theatres, 247 N.W.2d 676 (S.D.1977) (where prior settled South Dakota law is overruled, the holding should be prospective only); City of Aberdeen v. Meidinger, 89 S.D. 412, 233 N.W.2d 331 (1975); Fisher v. Sears, Roebuck & Co., 88 S.D. 1, 214 N.W.2d 85 (1974) (prospectivity should apply especially where the public has reasonably relied on a different concept); Rollinger v. J.C. Penney Co., 86 S.D. 154, 192 N.W.2d 699 (1971), overruled on other grounds Smith v. Tobin, 311 N.W.2d 209 (S.D.1981). As stated in Vogt v. Billion, 405 N.W.2d 635, 636-37 (S.D.1987) (citations omitted): We recognize that `... the Constitution neither prohibits nor requires retroactive effect.... When retroactive application of a decision could produce substantial inequitable results, justification exists for holding the decision nonretroactive ....' (Emphasis added.) See also People in the Interest of S.H., 323 N.W.2d 851 (S.D. 1982). Further, in State v. One 1966 Pontiac Auto., 270 N.W.2d 362, 365 (S.D.1978) (citations omitted), this court evaluated the following criteria to determine the retrospective effect of a particular decision: (1) the purpose of the decision, (2) reliance on the prior rule of law, and (3) the effect upon the administration of justice. [2] Thus, the result for either prospective or retroactive application may vary from decision to decision depending upon the result of the criteria evaluated. In my view, the analysis of the criteria in this case demands that prospective application be employed. As we said in Vogt, supra at 637, ... once the need is established for applying a principle prospectively there is a large measure of judicial discretion involved in deciding the time from which the new principle is to be controlling. [T]he modern rule followed by most courts is to treat the question of how an overruling decision should operate as one of judicial policy rather than of judicial power, and recognize that varying results may be reached, depending upon the particular circumstances presented and the particular rule affected. Fountain v. Fountain, 214 Va. 347, 200 S.E.2d 513 (1973), cert. denied, 416 U.S. 939, 90 S.Ct. 1942, 40 L.Ed.2d 290, reh'g denied, 417 U.S. 927, 94 S.Ct. 2636, 41 L.Ed.2d 231 (1974), citing 10 A.L.R.3d at 1378, 1383-84; Currier, Time and Change in JudgeMade Law: Prospective Overruling, 51 Va.L.Rev. 201, 206 et seq (1965). For authority stating that the overruling decision should not be retroactively applicable to transactions or events which occurred prior to the time that the overruling case was decided see City of Aberdeen v. Meidinger, 89 S.D. 412, 233 N.W.2d 331 (1975); People v. Patton, 57 Ill.2d 43, 309 N.E.2d 572 (1974); 10 A.L.R.3d 1371 (1966). In fact, in City of Sioux Falls v. Mini-Kota Art Theatres, 247 N.W.2d 676 (S.D. 1977), the court did not retroactively apply the decision of City of Aberdeen, supra . [3] Authority supporting the proposition that the overruling case should not apply to pending cases include: Lyons v. Westinghouse Electric Corp., 235 F.Supp. 526 (S.D. N.Y.1964); Culpepper v. Culpepper, 147 Fla. 632, 3 So.2d 330 (1941); State v. Stout, 90 Okl.Crim. 35, 210 P.2d 199 (1949); Molitor v. Kaneland Community Unit Dist., 18 Ill.2d 11, 163 N.E.2d 89 (1959), cert. denied 362 U.S. 968, 80 S.Ct. 955, 4 L.Ed.2d 900 (1959); Holytz v. Milwaukee, 17 Wis.2d 26, 115 N.W.2d 618 (1962). Holytz, in fact, was given prospective application subsequently in Hennington v. Valuch, 19 Wis. 2d 260, 120 N.W.2d 44 (1963) and Marshall v. City of Green Bay, 18 Wis.2d 496, 118 N.W.2d 715 (1963). Molitor was prospectively applied in Terry v. Mt. Zion Community Unit School Dist., 30 Ill.App.2d 307, 174 N.E.2d 701 (1961); List v. O'Connor, 19 Ill.2d 337, 167 N.E.2d 188 (1960). As stated in Prospective or Retroactive Operation of Overruling Decisions, 10 A.L.R.3d 1371, 1386 (1966): [4] It has often been held or recognized that where particular persons have acted in justifiable reliance on a subsequently overruled judicial decision and retroactive application of the overruling decision would defeat their reliance interests, such reliance interests should receive adequate protection, and the overruling decision should be denied retroactive application in order to prevent such persons from being subjected to unfairness or undue hardship. For example, it has been recognized in connection with the overturning of immunities from tort liability that those who had previously been held immune may have decided, in reliance upon earlier decisions, not to obtain insurance coverage or not to bother investigating accidents or gathering or preserving evidence, and that such reliance interests are entitled to be protected. (Emphasis added.) Similarly, in decisions overturning the doctrine of charitable immunity from tort liability, many jurisdictions have concluded that such organizations have relied on earlier decisions to uphold their immunity. Such jurisdictions have retroactively applied the overruling decision to the overruling case itself, but prospectively to all other cases. In Darling v. Charleston Community Memorial Hospital, 33 Ill.2d 326, 211 N.E.2d 253, cert. denied 383 U.S. 946, 86 S.Ct. 1204, 16 L.Ed.2d 209 (1966), wherein it appeared that charitable corporations could now be held liable for more than its liability insurance coverage, the court noted that such corporations may have relied on earlier decision in deciding whether to carry insurance, and, how much. The court held the new rule would be, with exception to the instant case at hand, given prospective effect only from the date upon which the opinion in the instant case became final. See also Molitor, supra; Spanel v. Mounds View School Dist., 264 Minn. 279, 118 N.W.2d 795 (1962); Parker v. Port Huron Hospital, 361 Mich. 1, 105 N.W.2d 1 (1960); Kojis v. Doctors Hospital, 12 Wis. 2d 367, 107 N.W.2d 292 (1961); Widell v. Holy Trinity Catholic Church, 19 Wis.2d 648, 121 N.W.2d 249 (1963); Burns v. Owens, 459 S.W.2d 303 (Mo.1970); Myers v. Drozda, 180 Neb. 183, 141 N.W.2d 852 (1966); Wojtanowski v. Franciscan Fathers, 34 Wis.2d 1, 148 N.W.2d 54 (1967); Goller v. White, 20 Wis.2d 402, 122 N.W.2d 193 (1963) (wherein the abrogation of parental immunity was limited to the instant case and to causes arising on or after opinion was filed). In view of our clear precedent, it is obvious that it is improper for this court to give Walz a retroactive application. Walz obviously established a new rule of law (specifically overruling a decision on an identical issue issued only six years earlier). Litigants have relied on our prior holding ( Griffin )for example, defendant here has acquired or terminated liability insurance coverage based upon the law in existence at the appropriate, material times; and presumably other liquor dealers have similarly relied and so acted in an attempt to insure against possible liability. Lawyers are placed in the difficult, if not untenable, position of not being able to properly advise their clients as to the state of the laweven to this day. Further, substantial inequitable results arguably exist by the retroactive application of Walz e.g., possible defendants are subjected to severe monetary liability, all of which hinges on their ability or lack of ability to predict the law of this state when this court has, in reality, caused the confusion. Everyone, be they individuals, bible merchants, or bar owners, is entitled to fundamental fairness and due process.