Court Opinion

ID: 9678133
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:12:17.221096+00
Date Added: 2024-06-11T18:17:02.074655
License: Public Domain

STEPHEN N. LIMBAUGH, JR., Judge,
concurring in part and dissenting in part.
I concur in the majority opinion except to the extent that it allows plaintiffs to bring a private cause of action against Chase under the Merchandising Practices Act. The amendment to that law authorizing a private cause of action is substantive, not procedural, and its application here violates the prohibition against retrospective laws under article I, section 13, of the Missouri Constitution.
“A retrospective law takes away or impairs vested or substantial rights acquired under existing laws, or imposes new obligations, duties, or disabilities with respect to past transactions.” Mendelsohn v. State Bd. of Registration for the Healing Arts, 3 S.W.3d 783, 785-86 (Mo. banc 1999). “Substantive laws — those relating to rights and duties that give rise to a cause of action — may not apply retrospectively.” Id. at 786. On the other hand, procedural and remedial statutes “not affecting substantive rights, may be applied retrospectively, without violating the constitutional ban on retrospective laws.” Id. “Procedural law prescribes a method of enforcing rights or obtaining redress for their invasion; substantive law creates, defines and regulates rights.” Wilkes v. Mo. Hwy. & Transp. Comm’n, 762 S.W.2d 27, 28 (Mo. banc 1988). The distinction is that “substantive law relates to the rights and duties giving rise to the cause of action, *776while procedural law is the machinery used for carrying on the suit.” Id.
Under the MPA, there are certain obligations and duties owed by sellers of real estate to buyers of real estate, and it follows that buyers have a corresponding substantive right to sellers’ fulfillment of those obligations and duties. Before the amendment, however, buyers had no private cause of action to enforce that right. The corollary is that at least before the amendment, if not after, sellers had a substantive right not to be subjected to such a private cause of action.
The majority maintains that although there was no private cause of action, the creation of a private cause of action did not “impose new obligations, duties or disabilities with respect to past transactions.” According to the majority, those obligations, duties or disabilities were already mandated by the MPA, and defendants were subject to those same provisions both before and after the amendment. The majority thus holds that the private cause of action is not a new cause of action and that the amendment was merely a procedural mechanism to allow private parties to enforce preexisting substantive rights.
Logically, however, the very right of a party to bring a cause of action is no less substantive than the substantive rights the party seeks to enforce, and it is no less an integral part of the cause of action. In other words, substantive rights encompass not only what the majority calls the “operative facts that give rise to [defendant’s] liability” — the defendant’s violation of the obligations and duties imposed by the statute — but also the right or standing of a party to enforce those rights. In the simplest terms, then, one cannot divorce a cause of action from who may bring a cause of action. In contrast, the right to bring a cause of action is not a procedural right because it does not pertain to the “machinery used for carrying on the suit” — it is instead the right to use that machinery. Because the right to bring a cause of action is a part of the substantive cause of action itself, it cannot be applied retrospectively. Unfortunately, this is so fundamental a notion that it goes without saying, and our Missouri opinions have not addressed it, not that they have ever held to the contrary.
The federal courts, however, have addressed this issue head-on. The recent 8th Circuit opinion in Owner-Operator Independent Drivers Association, Inc. v. New Prime, Inc., 339 F.3d 1001 (8th Cir.2003), for example, is directly on point and directly in conflict with the majority in this case. New Prime holds expressly that expanding the class of plaintiffs who can bring suit to enforce a preexisting statutory cause of action creates a new cause of action that results in an impermissible retroactive application of the statute. Id. at 1007. Like the case at hand, New Prime involved a statutory regulatory scheme enforceable solely by government action and an amendment to the statute permitting a private cause of action. In particular, the regulatory scheme in New Prime was a provision of the Interstate Commerce Commission Termination Act under which only the Interstate Commerce Commission could bring a cause of action against motor carriers for their failure to comply with Truth-In-Leasing regulations. Id. at 1006-07. The amendment to the Act, however, also authorized individual owner-operators to commence private causes of action. Id. In arriving at the holding, the court in New Prime first set out the federal standard (substantively the same as the Missouri counterpart) for determining whether a statute has impermissible retroactive effect, which is “whether it would impair rights a party possessed when he acted, increase a party’s liability for past *777conduct, or impose new duties with respect to transactions already completed.” Id., citing Landgraf v. USI Film Prods., 511 U.S. 244, 280, 114 S.Ct. 1522, 128 L.Ed.2d 229 (1994). The Court’s analysis then proceeded as follows:
Prior to the ICCTA, only the ICC could bring claims against motor carriers for failure to comply with the applicable regulations. The ICCTA shifts this power and permits individual Owner-Operators to bring defendants directly into court. We find that this creates an impermissible retroactive effect.
This issue is analogous to the issue presented in Hughes Aircraft Co. v. United States, 520 U.S. 939, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997), in which the Supreme Court held that when a statute expanded the class of plaintiffs who could bring claims, the statute altered the defendant’s substantive rights and therefore had a retroactive effect. Id. at 950, 520 U.S. 939, 117 S.Ct. 1871, 138 L.Ed.2d 135) (“In permitting actions by an expanded universe of plaintiffs with different incentives, the [new statute] essentially creates a new cause of action, not just an increased likelihood that an existing cause of action will be pursued.”) (citation omitted). Here, by permitting Owner-Operators to bring their own actions against motor carriers, the ICCTA expands the class of plaintiffs who could bring claims, thereby altering the motor carriers’ substantive rights....
The Hughes Court also noted that individual plaintiffs will be motivated “primarily by prospects of monetary reward rather than the public good.” 520 U.S. at 949, 117 S.Ct. 1871. We find this to be the case here as well: Owner-Operators who sue motor carriers will likely be motivated by their own potential financial gain. This increases defendant motor carriers’ potential liability, thereby creating a retroactive effect.
Id. at 1007. Just as in New Prime, the private cause of action in this case is a new cause of action that alters the defendant’s substantive right to be free from suit by private parties, increases defendant’s potential liability, and thereby creates an impermissible retroactive effect.
The majority disparages New Prime’s reliance on the Supreme Court precedent in Hughes Aircraft, a case in which the Court refused to give retroactive effect to an amendment to the False Claims Act that allowed suits by private individuals. According to the majority, “New Prime did not involve either suit by a party unharmed themselves [the parties bringing suit were qui tarn plaintiffs], or elimination of the defense [the government’s knowledge of the facts underlying the false claim], and thus erred in relying on Hughes.” However, the fact that the qui tarn plaintiffs in Hughes Aircraft were unharmed themselves (their claim for damages is essentially a reward for their whistle blowing efforts) is irrelevant, because the defendants were nonetheless exposed to the potential for increased liability from new suits by that new class of plaintiffs. Furthermore, the fact that Hughes Aircraft involved the elimination of a statutory defense is also irrelevant, because, as the New Prime court implicitly recognized, the presence of a new class of plaintiffs is couched as an independently sufficient ground for its holding. The Supreme Court’s bottom line on this issue bears mention again: “In permitting actions by an expanded universe of plaintiffs with different incentives, the [amendment] essentially creates a new cause of action, not just an increased likelihood that an existing cause of action will be pursued.” Hughes Aircraft, 520 U.S. at 950, 117 S.Ct. 1871.
The majority makes the same mistake in relying on the district court opinion in Owner-Operator Independent Drivers *778Assn, Inc. v. Arctic Express, Inc., 270 F.Supp.2d 990 (S.D.Ohio 2003). Arctic Express is cited for the proposition that the provision for a new class of plaintiffs does not violate the ban against retrospective laws because it “simply shifted the power to bring the Defendants into court from the [government agency] to the owner-operators themselves.” Not so. The provision for separate suits by a new class of plaintiffs increased the defendant’s potential liability by subjecting them to suit from both the government and the new class of plaintiffs. As Hughes Aircraft instructs, the increased potential liability results from the fact that these new plaintiffs, unlike government plaintiffs, will be motivated “primarily by prospects of monetary reward rather than the public good.” Id. at 949. And indeed, the motivation of these new plaintiffs, who suffered actual harm, will be even greater than the qui tam plaintiffs in Hughes Aircraft, who suffered no harm.
Finally, Wilkes v. Mo. Hwy. & Transp. Comm’n, 762 S.W.2d 27 (Mo. banc 1988), is inapposite. Wilkes holds that “[a]n act abrogating sovereign immunity does not create a new cause of action but provides a remedy for a cause of action already existing for which redress could not be had because of the immunity.” Id. at 28. The plaintiffs in Wilkes, in other words, had an “already existing” private cause of action that they could have pursued but for sovereign immunity or some other defense. But the plaintiffs here had no “already existing” private cause of action, and they could not have brought suit regardless of sovereign immunity or any other defense.
For the foregoing reasons, I would disallow the private cause of action and affirm the trial court’s dismissal of that claim.