Opinion ID: 1397358
Heading Depth: 1
Heading Rank: 4

Heading: prospective and retroactive effects

Text: Defendants argue that if either of these statutes is found unconstitutional then the Court should make its ruling prospective only, as we did in overruling prior decisions in Loyal Order of Moose No. 259 v. County Board, Utah, 657 P.2d 257 (1982). Otherwise, defendants maintain, local governments will be subject to enormous financial and administrative burdens. Taxing districts throughout the state have relied on the provisions of these statutes in setting their mill levies for 1981 through 1983. Local governments operate on very precise and often strained budgets that are carefully tied to these levies. Since 1981, a number of owners of state-assessed properties have paid their taxes under protest or have filed formal complaints with the Tax Commission. Retroactive effect to a decision altering the relative tax burdens between locally assessed and state-assessed properties would require reopening the assessment process as to tax obligations not yet final. To the extent that this might result in refunds of taxes paid on state-assessed properties, it would impose indebtedness for future repayments from locally assessed properties. Such indebtedness could be huge in counties that derive high proportions of their budgets from state-assessed properties. The purely prospective application of a state court decision overruling prior authority in a civil case violates no right under the United States Constitution. Great Northern Railway v. Sunburst Oil & Refining Co., 287 U.S. 358, 53 S.Ct. 145, 77 L.Ed. 360 (1932). (The prospective or retroactive effect of decisions in criminal cases involves a different range of consideration and is neither precedent for, nor should be deemed influenced by, what is done in civil cases. Compare State v. Norton, 675 P.2d 577 (1983).) In recent years, the United States Supreme Court has on several occasions held civil legislation unconstitutional and then given only prospective effect to its holding in order to avoid imposing undue administrative or financial burdens on agencies of local government. E.g., Lemon v. Kurtzman, 411 U.S. 192, 93 S.Ct. 1463, 36 L.Ed.2d 151 (1973); City of Phoenix v. Kolodziejski, 399 U.S. 204, 90 S.Ct. 1990, 26 L.Ed.2d 523 (1970); Cipriano v. City of Houma, 395 U.S. 701, 89 S.Ct. 1897, 23 L.Ed.2d 647 (1969). The prospective effect the Court gave to its holding on the unconstitutionality of the broad jurisdiction of bankruptcy courts is another example. Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). Similarly, in cases holding that state taxes or assessment procedures were unconstitutional, numerous state courts have directed that their holdings should have only prospective effect. E.g., Southern Pacific Co. v. Cochise County, 92 Ariz. 395, 377 P.2d 770 (1963); Deltona Corp. v. Bailey, Fla., 336 So.2d 1163 (1976); Strickland v. Newton County, 244 Ga. 54, 258 S.E.2d 132 (1979); Kansas City Millwright Co. v. Kalb, 221 Kan. 658, 562 P.2d 65 (1977); Jacobs v. Lexington-Fayette Urban County Government, Ky., 560 S.W.2d 10 (1977); Salorio v. Glaser, 93 N.J. 447, 461 A.2d 1100 (1983); Soo Line Railroad v. State, N.D., 286 N.W.2d 459 (1979); Perkins v. County of Albermarle, 214 Va. 416, 200 S.E.2d 566 (1973); Gottlieb v. City of Milwaukee, 33 Wis.2d 408, 147 N.W.2d 633 (1967). These state decisions rely on the need to preserve the financial solvency of local government units, the great financial and administrative hardship that would be entailed if general retroactive effect were allowed, and the tax authorities' justifiable reliance on the statute, which is presumptively constitutional. To the objection that an unconstitutional act is void from its inception so that everything done thereunder must be undone, the New Jersey Supreme Court cited the importance of recognizing that we are acting within the framework of appropriate equitable relief with respect to an unconstitutional taxation statute. Salorio v. Glaser, 93 N.J. at 563, 461 A.2d at 1108. In fashioning an equitable remedy, reliance interests weigh heavily, and the court should seek a blend of what is necessary, what is fair, and what is workable. Id. at 564, 461 A.2d at 1109, relying on the opinion of Chief Justice Burger in Lemon v. Kurtzman, supra . We relied on these same considerations in directing purely prospective effect (from a future date) to our overruling decision in Loyal Order of Moose No. 259, supra . On the basis of the circumstances of this case, the foregoing considerations and authorities persuade us of the appropriateness of prospective effect to our holding that § 59-5-109 is unconstitutional. One of the criticisms of giving only prospective effect to a decision is that it turns the court's opinion into an advisory opinion or dicta. It also deprives the litigants, who have sustained the burden of attacking an unconstitutional statute, of the fruits of their victory. For this reason, prospective effect may even discourage challenges to statutes of questionable validity. In response to these considerations, some decisions that give only prospective effect to a holding of unconstitutionality as to all other parties give the holding retroactive effect as to the litigants or others who have litigation pending. Strickland v. Newton County, supra (Ga.  parties only); Kansas City Millwright Co. v. Kalb, supra (Kan.  parties and others with action pending); Perkins v. County of Albermarle, supra (Va.  parties only). See generally Schaefer, Prospective Rulings: Two Perspectives, 1982 Supreme Court Review 1, 6; Schaefer, The Control of `Sunbursts': Techniques of Prospective Overruling, 42 N.Y.U.L.Rev. 631, 638-40 (1967). We gave this kind of limited retroactive effect to a decision that local government legislation was unconstitutional, a decision that was otherwise prospective only. Carter v. Beaver County Service Area No. One, 16 Utah 2d 280, 283, 399 P.2d 440, 442 (1965). For the same reasons that motivated the foregoing decisions, we direct that our holding of unconstitutionality be prospective and effective only from and after January 1, 1984. As to the six plaintiff-taxpayers who are parties to this appeal, however, this decision shall be retroactive for the year for which this suit for refund was brought.