Court Opinion

ID: 9819402
Source: CourtListenerOpinion
Date Created: 2023-09-01 06:24:34.876822+00
Date Added: 2024-06-11T12:10:16.418297
License: Public Domain

JUSTICE O’MALLEY, dissenting: The majority holds that applying the 1999 statutory change to 1993-94 tax years does not give the statutory change retroactive effect because such application does not interfere with a vested right.1 The majority holds that the new statute is not retroactive because its only possible negative impact would affect the State’s unasserted interest. First, I disagree with the observation that the State’s interest is unasserted. The State’s conduct, including its defense of this lawsuit, belies that observation.2 Second, the majority not only fails to indicate why it claims that the State’s interest is unasserted but also fails to indicate the consequences of the interest being unasserted. There certainly is no suggestion of waiver, and the analyses in Landgraf and Commonwealth Edison contain no mention of assertion of an interest. I also do not understand why the majority couches its vested rights analysis in terms of whether the State has a vested right in prospective application of the amendment rather than determining whether the amendment takes away vested rights acquired under existing law, as suggested by the Justice Story quotation contained in Commonwealth Edison and Landgraf and in the majority opinion. 326 Ill. App. 3d at 5. Most importantly, though, I disagree with the majority’s reliance on the ambivalent concept of “vested” and its conclusion that Commonwealth Edison equated retroactive effect with the impairment of vested rights. In Commonwealth Edison, our supreme court explained that, in the analysis involved in determining whether to apply a new statutory amendment to an existing controversy, the question is not simply whether the rights allegedly impaired are labeled “vested” or “nonvested.” See Commonwealth Edison, 196 Ill. 2d at 47. Rather, the court stated: “ ‘The question of the validity of the application of a statute rests on subtle judgments concerning the fairness or unfairness of applying the new statutory rule to affect interests which accrued out of events which transpired when a different prior rule of law was in force. One fundamental consideration of fairness is that settled expectations honestly arrived at with respect to substantial interests ought not to be defeated. [Citation.] The determination of whether the application of the statute unreasonably infringes upon the rights of those to whom it applies involves a balancing and discrimination between reasons for and against the application of the statute to this class of individuals. [Citation.]’ ” Commonwealth Edison, 196 Ill. 2d at 47, quoting Moore v. Jackson Park Hospital, 95 Ill. 2d 223, 241-42 (1983) (Ryan, C.J., specially concurring, joined by Underwood and Moran, JJ.). Commonwealth Edison also affirmed that “ ‘[a]nalysis of the practical considerations influencing the question whether a retroactive application of a new law is fair and just should afford more meaningful standards of judgment than either catchpenny phrases or the ambivalent concept of “vested.” ’ ” Commonwealth Edison, 196 Ill. 2d at 47-48, quoting 2 N. Singer, Sutherland on Statutory Construction § 41.05, at 369 (5th ed. 1993). The majority quotes Commonwealth Edison’s explanation of the Landgraf approach but fails to notice that both of those cases avoid the ambivalent concept of “vested.” The Landgraf test is “ ‘whether it would impair rights a party possessed when he acted.’ ” Commonwealth Edison, 196 Ill. 2d at 37, quoting Landgraf, 511 U.S. at 280, 128 L. Ed. 2d at 261-62, 1145 S. Ct. at 1505. The majority fails to note that the word “vested” does not appear before “rights” in this quote. If the State had a right to collect taxes in a greater amount from the Caveneys before the amendment, then the application of the amendment to the prior tax years impairs that right and imposes a new duty to refund money to the Caveneys with respect to transactions already completed. The State correctly argues that the effect of applying the statute to preamendment tax years plainly would be to attach new legal consequences to completed events. If applied retroactively, the amendment would change the tax consequences of preamendment corporate activity. Corporate expenditures that did not entitle subchapter S shareholders to their own income tax credits in the tax years when the expenditures were made now would do so. Landgraf observed that the largest category of cases where the presumption against retroactivity has been applied has consisted of new provisions affecting contractual or property rights, matters in which predictability and stability are of prime importance. Landgraf, 511 U.S. at 271, 128 L. Ed. 2d at 256, 114 S. Ct. at 1500. Applying tax credit amendments to prior tax years absent a clear legislative directive clearly interferes with the State’s ability to plan and budget for public expenditures, a matter in which predictability and stability are even more important than in private contractual or property rights situations. The majority seems to hold that Commonwealth Edison’s adoption of the Landgraf analysis amounted to nothing more than the reaffirmation of Armstead, which the majority reads as calling for a default rule in favor of applying new law to antecedent events absent a “vested” rights problem or legislative direction to the contrary. But Landgraf expressly held that “prospectivity remains the appropriate default rule.” Landgraf, 511 U.S. at 272, 128 L. Ed. 2d at 257, 114 S. Ct. at 1501. Finally, Landgraf pointed out that decisions to apply new law to antecedent events have been limited to situations where analysis of the temporal scope of the law itself required such application (i.e., legislative intent) or where the case involved either prospective relief (e.g., injunctive relief), procedural matters (e.g., jurisdiction), or collateral issues (e.g., attorney fees). Landgraf, 511 U.S. at 273-79, 128 L. Ed. 2d at 257-61, 114 S. Ct. at 1501-04. Landgraf s point in categorizing these cases was to “make it clear that Bradley [v. School Board of Richmond, 416 U.S. 696, 40 L. Ed. 2d 476, 94 S. Ct. 2006 (1974),] did not alter the well-settled presumption against application of the class of new statutes that would have genuinely ‘retroactive’ effect.” Landgraf, 511 U.S. at 277, 128 L. Ed. 2d at 260, 114 S. Ct. at 1503. In other words, Bradley and the other cases did not involve genuine retroactivity because they concerned either prospective relief, procedural matters, or collateral issues. The use of “retroactive” versus “genuinely retroactive” is a fine point, and the final explication of the presumption helpfully avoids these terms and holds: “The authorities we relied upon in Bradley lend further support to the conclusion that we did not intend to displace the traditional presumption against applying statutes affecting substantive rights, liabilities, or duties to conduct arising before their enactment. [Citation.]” Landgraf, 511 U.S. at 278, 128 L. Ed. 2d at 260, 114 S. Ct. at 1504. The quote makes clear that the Landgraf presumption against retroactivity admits only narrow exceptions, such as situations involving prospective relief, procedural matters, or collateral issues. The State’s right to collect taxes from the Caveneys and their obligation to pay taxes clearly trigger what Landgraf called the “traditional presumption against applying statutes affecting substantive rights, liabilities, or duties to conduct arising before their enactment.” Landgraf, 511 U.S. at 278, 128 L. Ed. 2d at 260, 114 S. Ct. at 1504.   This is true even if the General Assembly failed to expressly state that the amendment was prospective.