Lead Opinion
announced the judgment of the Court and delivered an opinion, in which The Chief Justice, Justice White, and Justice Kennedy join.
In this case we decide whether our decision in American Trucking Assns., Inc. v. Scheiner,
I
In 1983 petitioners brought suit in the Chancery Court of Pulaski County, Arkansas, challenging the constitutionality of the newly enacted Arkansas Highway Use Equalization Tax Act (HUE), 1983 Ark. Gen. Acts, No. 685, Ark. Code Ann. §§ 27-35-204, 27-35-205 (1987) (formerly codified as Ark. Stat. Ann. §§ 75-817.2, 75-817.3 (Supp. 1985)), under the Commerce Clause of the Federal Constitution, Art. I, § 8, cl. 3. The HUE tax required trucks operating on Arkansas
Pending determination on the merits of their constitutional challenge, petitioners sought a preliminary injunction placing all HUE tax revenues in escrow to prevent those revenues from being deposited into the state treasury and being distributed to state agencies. The Chancery Court’s denial of petitioners’ motion for the preliminary injunction was affirmed on interlocutory appeal to the Arkansas Supreme Court. American Trucking Assns., Inc. v. Gray,
Petitioners appealed the Arkansas Supreme Court decision to this Court, and we held the case pending our decision in Scheiner, which involved a similar constitutional challenge to two flat highway use taxes enacted by the Commonwealth of Pennsylvania. In Scheiner, decided June 23, 1987, the Court held that unapportioned flat taxes such as those imposed by Pennsylvania penalize travel within a free trade area among the States. The Court applied the “internal consistency” test, see Armco Inc. v. Hardesty,
Petitioners thereupon sought to enjoin further collection of the HUE tax or to order an escrow of the taxes to be collected pending reconsideration of Gray by the Arkansas Supreme Court. Motions seeking to accomplish this end were denied by that court, and petitioners returned here. In an opinion issued August 14, 1987, Justice Blackmun, acting
On October 9, 1987, the Arkansas Legislature met in special session, repealed the HUE tax, and replaced it with a tax requiring heavy trucks to pay 2.5¢ per mile of travel on Arkansas highways. See Ark. Code Ann. §§ 27-35-204, 27-35-205 (1987). Subsequently, in an opinion delivered on March 14, 1988, the Arkansas Supreme Court reconsidered the HUE tax in light of Scheiner and ruled it unconstitutional. American Trucking Assns., Inc. v. Gray,
First, the Arkansas court ruled that Scheiner established a new rule of law with respect to flat highway use taxes by overruling the Aero Mayflower line of cases. The Arkansas court concluded that it reasonably relied on those cases in originally upholding the HUE tax against petitioners’ Commerce Clause challenge. Second, the court held that pro
Petitioners thereupon sought a writ of certiorari from this Court. They presented the questions whether Scheiner should be applied retroactively and whether, even if the Scheiner decision is not retroactive, they are still entitled to refunds for taxes paid before we decided Scheiner for the tax year that began after the Scheiner decision or to refunds for taxes paid after the Scheiner decision but before Justice Blackmun’s escrow order. We granted the petition for certiorari,
II
When we have held state taxes unconstitutional in the past it has been our practice to abstain from deciding the remedial effects of such a holding. While the relief provided by the State must be in accord with federal constitutional requirements, see McKesson, ante, at 36-43, 51-52, we have entrusted state courts with the initial duty of determining appropriate relief. See, e. g., Scheiner,
“[T]his Court should not take it upon itself in this complex area of state tax structures to determine how to apply its holding:
“‘These refund issues, which are essentially issues of remedy for the imposition of a tax that unconstitutionally discriminated against interstate commerce, were not addressed by the state courts. Also, the federal constitu*177 tional issues involved may well be intertwined with, or their consideration obviated by, issues of state law. Also, resolution of those issues, if required at all, may necessitate more of a record than so far has been made in this case. We are reluctant, therefore, to address them in the first instance.’” Tyler Pipe, supra, at 252, quoting Bacchus, supra, at 277.
In a case such as this, where a state court has addressed the refund issues, the same comity-based perception that has dictated abstention in the first instance requires that we carefully disentangle issues of federal law from those of state law and refrain from deciding anything apart from questions of federal law directly presented to us. By these means we avoid interpreting state laws with which we are generally unfamiliar and deciding additional questions of federal law unnecessarily. Cf. Michigan v. Long,
The determination whether a constitutional decision of this Court is retroactive—that is, whether the decision applies to conduct or events that occurred before the date of the decision—is a matter of federal law. When questions of state law are at issue, state courts generally have the authority to determine the retroactivity of their own decisions. See Great Northern R. Co. v. Sunburst Oil & Refining Co.,
Although the Court has recently determined that new rules of criminal procedure must be applied retroactively to all cases pending on direct review or not yet final, see Griffith v. Kentucky,
It is important to distinguish the question of retroactivity at issue in this case from the distinct remedial question at issue in McKesson, ante, p. 18: When taxpayers involuntarily pay a tax that is unconstitutional under existing precedents, to what relief are those affected taxpayers entitled as a matter of federal law? Our decision in McKesson indicates that federal law sets certain minimum requirements that States
A
Using the Chevron Oil test, we consider first the application of Scheiner to taxation of highway use prior to June 23, 1987, the date we decided Scheiner, for the HUE tax year ending June 30, 1987. That test has three parts:
“First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolution was not clearly foreshadowed. Second, ... we must. . . weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation. Finally, we [must] weig[h] the inequity imposed by retroactive application, for where a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the injustice or hardship by a holding of nonretroactivity.”404 U. S., at 106-107 (citations and internal quotations omitted).
We think it obvious that Scheiner meets the first test of nonretroactivity. Both the majority and dissent in that case recognized that the Court’s decision left very little of the Aero Mayflower line of precedents standing. As the majority observed, “the precedents upholding flat taxes can no longer support the broad proposition . . . that every flat tax for the privilege of using a State’s highways must be upheld even if it has a clearly discriminatory effect on commerce by
The conclusion that Scheiner established a new principle of law in the area of our dormant Commerce Clause jurisprudence does not necessarily end the inquiry. See Florida v. Long,
Finally, under the third prong of the Chevron Oil test, we consider the equities of retroactive application of Scheiner. Our decision today in McKesson makes clear that once a State’s tax statute is held invalid under the Commerce Clause, the State is obligated to provide relief consistent with federal due process principles. See ante, at 36-43. When the State comes under such a constitutional obligation, McKesson establishes that equitable considerations play only the most limited role in delineating the scope of that relief. Ante, at 44-51. Of course, we had no occasion to consider the equities of retroactive application of new law in McKesson because that case involved only the application of settled Commerce Clause precedent. See ante, at 31, n. 15. In light of McKesson’s holding that a ruling that a tax is unconstitutionally discriminatory under the Commerce Clause places substantial obligations on the States to provide relief, the threshold determination whether a new decision should apply retroactively is a crucial one, requiring a hard look at whether retroactive application would be unjust. At this initial stage, the question is not whether equitable considerations outweigh the obligation to provide relief for a
A careful consideration of the equities persuades us that Scheiner should not apply retroactively. Unlike McKesson, where the State enacted a tax scheme that “was virtually identical to the Hawaii scheme invalidated in Bacchus Imports, Ltd. v. Dias,
Where a State can easily foresee the invalidation of its tax statutes, its reliance interests may merit little concern, see McKesson, ante, at 44-46, 50. By contrast, because the State cannot be expected to foresee that a decision of this Court would overturn established precedents, the inequity of unsettling actions taken in reliance on those precedents is apparent. Although at this point the burden that the retroactive application of Scheiner would place on Arkansas cannot be precisely determined, it is clear that the invalidation of the State’s HUE tax would have potentially disruptive consequences for the State and its citizens. A refund, if required by state or federal law, could deplete the state treasury, thus threatening the State’s current operations and future plans. Presumably, under McKesson, the State would be required to calculate and refund that portion of the tax that would be
In sum, we conclude that applying Scheiner retroactively would “produce substantial inequitable results.” Chevron Oil,
Petitioners further argue that the equities always favor applying decisions retroactively when those decisions would burden only a governmental entity. They rely on Owen v. City of Independence,
In determining whether a decision should be applied retroactively, this Court has consistently given great weight to the reliance interests of all parties affected by changes in the law. See, e. g., Cipriano v. City of Houma,
B
Before and after the date of our Scheiner decision, some petitioners paid HUE taxes for the tax year beginning July 1, 1987. The Arkansas Supreme Court ruled that the State’s collection of these payments was constitutional until the date of Justice Blackmun’s escrow order. It therefore declined to order refunds for any 1987-1988 HUE taxes not paid into escrow. Petitioners argue that they are entitled to refunds of these payments even if Scheiner is not to be applied retroactively because these HUE tax payments were made to secure the privilege of driving heavy trucks on Arkansas highways between July 1, 1987, and June 30, 1988. Petitioners argue that the question whether Scheiner applies to the collection of 1987-1988 HUE taxes should depend on the “occurrence of the taxed transaction or the enjoyment of the taxed
It is, of course, a fundamental tenet of our retroactivity doctrine that the prospective application of a new principle of law begins on the date of the decision announcing the principle. See, e. g., Florida v. Long,
Thus petitioners are correct that those HUE taxes paid to the State for the 1987-1988 tax year, regardless of whether they were paid before or after we announced Scheiner, are not protected by the conclusion that Scheiner applies only prospectively. In this regard, the Arkansas Supreme Court’s holding that petitioners were not entitled to refunds for the 1987-1988 HUE taxes they paid arose from a misapplication of Chevron Oil. From the face of the State Supreme Court’s opinion we can discern no reason apart from this misapprehension of the force of Chevron Oil that caused it to deny petitioners’ request for 1987-1988 HUE tax refunds. Accordingly, this aspect of the Arkansas Supreme Court’s opinion must be reversed.
III
The dissent claims that our decision today treats the petitioners in this case less favorably than the taxpayers in Scheiner, post, at 211-212, and challenges our retroactivity doctrine as fundamentally inequitable. The dissent asserts that not only does judicial integrity require the Court to apply new decisions to all cases pending on direct review, but also that we have consistently followed this practice in civil cases raising constitutional claims. Post, at 212-218. The dissent further insists that Chevron Oil does not enunciate principles of retroactivity; rather, it is merely an exercise of our remedial powers. Post, at 219-224. As we explain below, these arguments miss the mark. First, as we today resolve an issue not considered in Scheiner, we have neither
The dissent’s claim that.today’s decision is unjust because it treats the taxpayers in this case differently from the taxpayers in Scheiner, post, at 211-212, is unpersuasive. The taxpayers in Scheiner challenged a state court’s ruling on the constitutionality of certain tax statutes; the taxpayers in this case challenge a state court’s ruling on the nonretroactivity of a decision of this Court. This Court has done nothing more than resolve the separate issues raised by each case.
In Scheiner, the Court reversed the judgment of the Supreme Court of Pennsylvania which had upheld the constitutionality of two Pennsylvania tax statutes. After we “decided the constitutional issue presented to us,”
The dissent’s claim that this Court has consistently applied new decisions retroactively to civil cases which are pending on direct review is an inaccurate characterization of our cases. In fact, it is little more than a proposal that we sub silentio overrule Chevron Oil. The theory of retroactivity identified by the dissent was formulated in Justice Harlan’s concurrence in United States v. Estate of Donnelly,
The principles underlying the Court’s civil retroactivity doctrine can be distilled from both criminal and civil cases considering this issue. When the Court concludes that a law-changing decision should not be applied retroactively, its decision is usually based on its perception that such application would have a harsh and disruptive effect on those who relied on prior law. See, e. g., Chevron Oil,
The Court expressly relied on this doctrine in a criminal case, Jenkins v. Delaware,
The Court has relied on the same reasoning in the civil arena. In decisions invalidating state election provisions, the Court has focused on the conduct or events that should not be invalidated by its law-changing decisions. In Cipriano v. City of Houma,
The Court’s practice of focusing on the operative conduct or events is implicit in our other retroactivity decisions. In England v. Louisiana State Bd. of Medical Examiners,
As these cases indicate, the Court has not followed the dissent’s approach in the civil sphere. In none of the cases discussed above did the Court indicate that the critical factor for determining the retroactive applicability of a decision was the time when principles of res judicata or a time bar precluded further litigation. Rather, the Court’s retroactivity doctrine obliged courts to apply old law to litigants before them if the operative conduct or events had occurred prior to the new decision. In this case, we merely apply these well-established principles of civil retroactivity. Here, we define the operative conduct as Arkansas’ flat taxation of highway use in reliance on this Court’s pre-Scheiner cases. Supra, at 186-187. We then decline to apply Scheiner retroactively to invalidate taxation on highway use prior to the date of that decision.
In striving to recharacterize our precedents, the dissent makes the error of equating a decision not to apply a rule retroactively with the judicial choice of a remedy. Post, at 219-220. As the Court makes plain in McKesson, there is an important difference. Once a constitutional decision applies and renders a state tax invalid, due process, not equitable considerations, will generally dictate the scope of relief offered. Nor do this Court’s retroactivity decisions, whether in the civil or criminal sphere, support the dissent’s assertion that our retroactivity doctrine is a remedial principle. Indeed, Lemon II,
“Those guidelines [expressed in Linkletter v. Walker,381 U. S. 681 (1965), for applying our retroactivity doctrine] are helpful, but the problem of Linkletter and its progeny is not precisely the same as that now before us. Here, we are not considering whether we will apply a new constitutional rule of criminal law in reviewing judg*195 ments of conviction obtained under a prior standard; the problem of the instant case is essentially one relating to the appropriate scope of federal equitable remedies, a problem arising from enforcement of a state statute during the period before it had been declared unconstitutional. True, the temporal scope of the injunction has brought the parties back to this Court, and their dispute calls into play values not unlike those underlying Link-letter and its progeny. But however we state the issue, the fact remains that we are asked to reexamine the District Court’s evaluation of the proper means of implementing an equitable decree.” Id., at 199-200 (opinion of Burger, C. J.) (citation omitted).
While application of the principles of retroactivity may have remedial effects, they are not themselves remedial principles. Any judicial decision will affect the relief available to one of the parties before the court; even an evidentiary ruling may have some remedial effect. However, rules regarding retroactivity, like decisions regarding the mechanics of procedure, are distinct from remedial decisions which govern what a court “may do for the plaintiff and conversely what it can do to the defendant.” K. York, J. Bauman, & D. Rendleman, Remedies 1 (4th ed. 1985); see also D. Dobbs, Law of Remedies 3 (1973) (“The substantive questions whether the plaintiff has any right or the defendant has any duty, and if so what it is, are very different questions from the remedial questions whether this remedy or that is preferred, and what the measure of the remedy is”). A decision defining the operative conduct or events that will be adjudicated under old law does not, in itself, specify an appropriate remedy.
Especially in light of today’s holding in McKesson, the dissent’s view that the doctrine of civil retroactivity is a remedial principle would surprise the many commentators,
“We have no occasion to consider whether this division in time of the effects of a decision is a sound or an unsound application of the doctrine of stare decisis as known to the common law. Sound or unsound, there is involved in it no denial of a right protected by the federal constitution. . . . 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.” Id., at 364.
See also United States v. Estate of Donnelly,
In proposing that we extend the retroactivity doctrine recently adopted in the criminal sphere to our civil cases, the dissent assumes that the Court’s reasons for adopting a per se rule of retroactivity in Griffith v. Kentucky,
In adopting a per se rule of retroactivity for criminal cases, Griffith relied on what, in essence, was a single justification: that it was unfair to apply different rules of criminal procedure to two defendants whose cases were pending on direct review at the same time. See id., at 322-323. In expounding this theory, the Court did not explain why the pendency of a defendant’s case on direct review was the critical factor for determining the applicability of new decisions. It is at least arguable, as Justice White pointed out in dissent, that the speed at which cases proceed through the criminal justice system should not be the key factor for determining whether “otherwise identically situated defendants may be subject to different constitutional rules.” Id., at 331 (internal quotation marks omitted). Nor did the Court consider whether the reliance interests of law enforcement officials would make the retroactive application of new decisions inequitable, although this factor had been a key consideration in prior cases. See, e. g., Jenkins v. Delaware,
The Court’s analysis in Griffith must be understood in context. During the period in which much of our retroactivity doctrine evolved, most of the Court’s new rules of criminal procedure had expanded the protections available to criminal defendants. See generally Beytagh, supra, n. 2. Therefore, whenever the Court determined that retroactive application of a new rule would be inequitable, the Court was, in effect, according the government’s reliance interests more weight than the defendant’s interests in receiving the benefit of the rule. See, e. g., United States v. United States Coin & Currency,
There are no analogous reasons for adopting a per se rule of retroactivity in the civil context. Either party before a court may benefit from the application of the Chevron Oil rule. New decisions are not likely to favor civil defendants over civil plaintiffs; nor is there any policy reason for protecting one class of litigants over another. Moreover, even a party who is deprived of the full retroactive benefit of a new
As Griffith’s rationale is unpersuasive in the civil context, we see no reason to abandon the Chevron Oil test. The Con
Accordingly, in all respects apart from its disposition of 1987-1988 HUE tax payments, we affirm the judgment of the Arkansas Supreme Court.
We are not, however, in a position to determine precisely the nature and extent of the relief to which petitioners are entitled for their 1987-1988 HUE tax payments. That determination, as we have already observed, lies with the state courts in the first instance. We therefore reverse and remand this aspect of the case to the Arkansas Supreme Court in order to permit it to determine the appropriate relief, not inconsistent with our decision today in McKesson, for petitioners’ payment of 1987-1988 HUE taxes whether made before or after the date of our Scheiner decision.
So ordered.
Notes
Justice Scalia indicates that the inequitable effects of retroactively applying Scheiner are a sign that our dormant Commerce Clause doctrine is “inherently unstable” and should not be applied to “new matters coming before us,” post, at 203-204, rather than a factor weighing in favor of
See, e. g., Corr, Retroactivity: A Study in Supreme Court Doctrine “As Applied,” 61 N. C. L. Rev. 745 (1983); Traynor, Quo Vadis, Prospective Overruling: A Question of Judicial Responsibility, 28 Hastings L. J.
As we state in McKesson, ante, at 29-31, the Court’s appellate jurisdiction in a case such as this one is not barred by the Eleventh Amendment.
Concurrence Opinion
concurring in the judgment.
I agree with Justice O’Connor that Arkansas should not be held to have violated the Constitution in imposing its Arkansas Highway Use Equalization Tax (HUE) before our decision in American Trucking Assns., Inc. v. Scheiner, 483
I share Justice Stevens’ perception that prospective decisionmaking is incompatible with the judicial role, which is to say what the law is, not to prescribe what it shall be. The very framing of the issue that we purport to decide today—whether our decision in Scheiner shall “apply” retroactively—presupposes a view of our decisions as creating the law, as opposed to declaring what the law already is. Such a view is contrary to that understanding of “the judicial Power,” U. S. Const., Art. III, § 1, which is not only the common and traditional one, but which is the only one that can justify courts in denying force and effect to the unconstitutional enactments of duly elected legislatures, see Marbury v. Madison,
Presuming law from congressional silence is quite different from the normal judicial task of interpreting and applying text or determining and applying common-law tradition. The principal question to be asked, of course, is what would a reasonable federal regulator of commerce intend—which is no different from the question a legislator himself must ask. That explains, I think, why no body of our decisional law has changed as regularly as our “negative” Commerce Clause jurisprudence. Change is almost its natural state, as it is the natural state of legislation in a constantly changing national economy. That also explains why our exercise of the “negative” Commerce Clause function has ultimately cast us in the essentially legislative role of weighing the imponderable—balancing the importance of the State’s interest in this or that (an importance that different citizens would assess differently) against the degree of impairment of commerce. See, e. g., CTS Corp. v. Dynamics Corp. of America,
Because our “negative” Commerce Clause jurisprudence is inherently unstable, it will repeatedly result in the upsetting of settled expectations. My fellow dissenters in Scheiner seek to avoid this consequence in the present case—or, more precisely, seek to avoid extending this consequence beyond
But it does not follow that I must conclude that the pre-Scheiner Arkansas HUE taxes were unconstitutional. Given my disagreement with this Court’s “negative” Commerce Clause jurisprudence, the only thing that could possibly lead me to such a conclusion would be Scheiner’s status as precedent. Although I will not apply “negative” Commerce Clause decisional theories to new matters coming before us, stare decisis—that is to say, a respect for the needs of stability in our legal system—would normally cause me to adhere to a decision of this Court already rendered as to the unconstitutionality of a particular type of state law. The law here is indistinguishable from that in Scheiner, so I would normally suppress my earlier view of the matter and acquiesce in the Court’s opinion that it is unconstitutional. Something is wrong, however, if I must take that position with respect to the pre-Scheiner taxes at issue in the present case. Believing that Arkansas was fully entitled to impose the taxes, I would nonetheless make the fifth vote to penalize it for having done so even during the period (pre-Scheiner) when our opinions announced it could lawfully do so—and I would impose this injustice in the name of stare decisis, that is, in the interest of protecting settled expectations. That would be
Accordingly, I would affirm the decision below with respect to Arkansas’ HUE taxes imposed pre-Scheiner, because in my view they were constitutional. I would reverse the decision below with respect to Arkansas’ HUE taxes imposed post-Scheiner because they were unlawful by virtue of that decision. I thus concur in the judgment of the Court.
Dissenting Opinion
with whom Justice Brennan, Justice Marshall, and Justice Blackmun join, dissenting.
This case presents two issues: whether the flat tax features of the Arkansas HUE tax violate the Commerce Clause of the Federal Constitution and, if so, whether petitioners are entitled to a tax refund. The former is ordinarily a pure question of federal law, our resolution of which should be applied uniformly throughout the Nation, while the latter is a mixed question of state and federal law. The plurality today, however, inverts that analysis. With deceptive simplicity, the plurality rules that the constitutionality vel non of the flat tax turns on whether state officials in a particular State could have anticipated that such a tax would violate the Constitu
I
Arkansas enacted the Highway Use Equalization Tax Act (HUE), 1983 Ark. Gen. Acts, No. 685, Ark. Code Ann. §§ 27-35-204, 27-35-205 (1987), in March 1983. The Act, which became effective on July 1, 1983, discriminated against interstate carriers by taxing them at a higher effective tax rate than carriers which operated intrastate. Vehicles of the weight class covered by the Act were required to display a certificate evidencing compliance with the tax. Operation of
On May 27, 1983, before the effective date of the HUE Act, but after some $1,775,000 in tax revenues had been collected,
The Chancery Court denied petitioners’ motion for a preliminary injunction, concluding that the tax was constitutional. 2 Record 764. After a trial on the merits, the court ruled in the State’s favor. In an opinion delivered in April 1986, the State Supreme Court affirmed, holding that the tax was constitutional under our decisions in Aero Mayflower Transit Co. v. Georgia Pub. Serv. Comm’n,
We noted probable jurisdiction in the Pennsylvania case, see American Trucking Assns., Inc. v. Scheiner,
Because our resolution of Scheiner bore on the constitutionality of the taxes challenged in this case, we remanded it to the Arkansas Supreme Court for reconsideration in light
II
In numerous civil cases, over the past several decades, we have declined to give “retroactive effect” to decisions announcing “new” rules of law. Those cases, arising from federal court and involving the application of statutes of limitations and the scope of equitable relief, have not required us to distinguish the two senses in which retroactivity may be used. A decision may be denied “retroactive effect” in the sense that conduct occurring prior to the date of decision is not judged under current law, or it may be denied “retroactive effect” in the sense that independent principles of law limit the relief that a court may provide under current law.
This case, which comes to us from state court, requires us for the first time to expressly distinguish between retroactivity as a choice-of-law rule and retroactivity as a remedial principle. Whereas in cases arising from federal court both the applicable law and the type of relief are subject to plenary review, in cases from state court our mandate is more limited. See Fox Film Corp. v. Muller,
Those principles elucidate the disposition of Scheiner and explain why a similar result is appropriate here. In Scheiner, we held that a flat tax substantially similar to the Arkansas HUE tax violated the Commerce Clause. That decision resolved the only question then before us—the lawfulness of a flat, tax assessed for the years 1980 to 1986. Since no federal constitutional challenge was presented to the state remedy and since the State had not had the opportunity to determine the appropriate relief under federal and state law, we reversed the state court’s determination on the merits and remanded the case for it “to consider whether our ruling should be applied retroactively and to decide other remedial issues.”
A similar disposition is appropriate here. Our judgment in Scheiner leaves no doubt that the Arkansas HUE tax is unconstitutional. As Justice Blackmun concluded, in ruling on petitioners’ application for establishment of an escrow account, the taxes challenged by petitioners are “substantially similar” in effect “to that of the Pennsylvania unapportioned flat taxes invalidated in Scheiner,” and work “to deter interstate commerce.” American Trucking Assns., Inc. v. Gray,
In my opinion, the Arkansas HUE tax also violated the Constitution before our decision in Scheiner and petitioners are entitled to a decision to that effect. Like the taxpayers in Scheiner itself, petitioners timely challenged the constitutionality of the state flat tax. Petitioners would have prevailed if the Pennsylvania tax invalidated in the Scheiner case had never been enacted, or if that litigation had not reached our Court until after their litigation did. They should not lose simply because we decided Scheiner first. In Scheiner, we applied our understanding of the Commerce Clause retroactively, reversing the Pennsylvania Supreme Court’s judgment that a similar flat highway tax was unconstitutional and remanding the case for further consideration of the remedial issues.
III
Fundamental notions of fairness and legal process dictate that the same rules should be applied to all similar cases on direct review. Considerations of finality and the justifiable expectations that have grown up surrounding a rule are ordinarily and properly given expression in our rules of res judicata and stare decisis. When the legal rights of parties have been finally determined, principles “‘of public policy and of private peace’” dictate that the matter not be open to relitigation every time there is a change in the law. Federated Department Stores, Inc. v. Moitie,
“In Justice Harlan’s view, and now in ours, failure to apply a newly declared constitutional rule to criminal cases pending on direct review violates basic norms of constitutional adjudication. First, it is a settled principle that this Court adjudicates only ‘cases’ and ‘controversies.’ See U. S. Const., Art. III, § 2. Unlike a legislature, we do not promulgate new rules of constitutional criminal procedure on a broad basis. Rather, the nature of judicial review requires that we adjudicate specific cases, and each case usually becomes the vehicle for announcement of a new rule. But after we have decided a new rule in the case selected, the integrity of judicial review requires that we apply that rule to all similar cases pending on direct review. Justice Harlan observed:
“‘If we do not resolve all cases before us on direct review in light of our best understanding of governing constitutional principles, it is difficult to see why we should so adjudicate any case at all. . . . In truth, the Court’s assertion of power to disregard current law in adjudicating cases before us that have not already run the full course of appellate review, is quite simply an assertion that our constitutional function is not one of adjudication but in effect of legislation.’ Mackey v. United States, 401 U. S. [667,] 679 [(1971)] (opinion concurring in judgment).
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“Second, selective application of new rules violates the principle of treating similarly situated defendants the same. See Desist v. United States, 394 U. S. [244,] 258-259 [(1969)] (Harlan, J., dissenting). As we pointed*214 out in United States v. Johnson, the problem with not applying new rules to cases pending on direct review is ‘the actual inequity that results when the Court chooses which of many similarly situated defendants should be the chance beneficiary’ of a new rule. 457 U. S. [537,] 556, n. 16 [(1982)] (emphasis in original). Although the Court had tolerated this inequity for a time by not applying new rules retroactively to cases on direct review, we noted: ‘The time for toleration has come to an end.’ Ibid.” Id., at 322-323.
Griffith was a criminal case, but the force of its reasoning cannot properly be so limited. The Court has no more constitutional authority in civil cases than in criminal cases to disregard current law or to treat similarly situated litigants differently. In both, adherence to legal principle requires that we determine the rights of litigants in accordance with our best current understanding of the law. That current understanding may include judicial principles of res judicata and stare decisis and legislatively prescribed statutes of limitations that protect interests in reliance and repose. It may also include a law of damages that recognizes reliance interests. But once a determination has been made that a party is properly before the Court and a new decisional rule properly states the law, interests of repose should play no role in determining the substantive legal rights of parties. Justice Harlan explained the distinction between retroactivity as a choice-of-law principle and the recognition of reliance as an element of the damages determination after a new principle of law has been applied:
“The impulse to make a new decisional rule nonretro-active rests, in civil cases at least, upon the same considerations that lie at the core of stare decisis, namely to avoid jolting the expectations of parties to a transaction. Yet once the decision to abandon precedent is made, I see no justification for applying principles determined to be wrong, be they constitutional or otherwise, to liti*215 gants who are in or may still come to court. The critical factor in determining when a new decisional rule should be applied to a transaction consummated prior to the decision’s announcement is, in my view, the point at which the transaction has acquired such a degree of finality that the rights of the parties should be considered frozen. Just as in the criminal field the crucial moment is, for most cases, the time when a conviction has become final, see my Desist dissent, supra, so in the civil area that moment should be when the transaction is beyond challenge either because the statute of limitations has run or the rights of the parties have been fixed by litigation and have become res judicata. Any uncertainty engendered by this approach should, I think, be deemed part of the risks of life.
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“To the extent that equitable considerations, for example, ‘reliance,’ are relevant, I would take this into account in the determination of what relief is appropriate in any given case. There are, of course, circumstances when a change in the law will jeopardize an edifice which was reasonably constructed on the foundation of prevailing legal doctrine. Thus, it may be that the law of remedies would permit rescission, for example, but not an award of damages to a party who finds himself able to avoid a once-valid contract under new notions of public policy. Cf. Simpson v. Union Oil Co.,377 U. S. 13 , 25 (1964). . . . The essential point is that while there is flexibility in the law of remedies, this does not affect the underlying substantive principle that short of a bar of res judicata or statute of limitations, courts should apply the prevailing decisional rule to the cases before them.” United States v. Estate of Donnelly,397 U. S. 286 , 295-297 (1970) (concurring opinion).
Until today, we have consistently applied these principles in civil cases where a litigant has challenged the constitution
In Phoenix v. Kolodziejski,
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The plurality rejects this analysis and, by implication, our decisions in Cipriano and Kolodziejski, and instead applies the approach that we took with respect to federal statutes of limitations in Chevron Oil Co. v. Huson,
The plurality’s sole support for this anomalous approach—that the law applicable to a particular case is that law which the parties believe in good faith to be applicable to the case-is citation to a single footnote in Griffith that states that “the area of civil retroactivity. . . continues to be governed by the standard announced in Chevron Oil Co. v. Huson,
Chevron Oil involved a controversy between two private litigants over application of the statute of limitations for actions under the Outer Continental Shelf Lands Act. At the time the lawsuit was initiated there was a long line of federal-court decisions holding that the admiralty law doctrine of laches applied to personal injury suits under the Act,
Insofar as the Court in Chevron Oil did not apply its interpretation of federal law to the parties before the Court, and affirmed the lower court’s decision adopting a contrary understanding of federal law, that case does not even address the problem which is presented by this case, and was ad
More fundamentally, however, Chevron Oil involved the application of a statute of limitations, an area over which the federal courts historically have asserted equitable discretion to craft rules of tolling, laches, and waiver. See Bowen v. City of New York,
The remainder of our “retroactivity” cases fit into a similar mold. In Saint Francis College v. Al-Khazraji,
The Arkansas HUE tax unquestionably violates the Commerce Clause. Two results might follow from that conclusion. If the retention of taxes assessed violates the Due Process Clause under our decision today in McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, Dept. of Business Regulation of Fla., ante, at 36-43, petitioners are entitled to a remedy. The State’s freedom to impose various procedural requirements on the refund mechanism sufficiently meets any state interest in sound fiscal planning. Ante, at 44-45. If the retention of the taxes does not violate the Due Process Clause, but does violate the state constitutional provision governing illegal exactions, petitioners are entitled to relief as a matter of state law. The State has the right to provide relief for illegally exacted taxes and make its own judgment as to the equities free from this Court’s determination that such relief would be unduly burdensome. In either event—whether we think relief from a violation of fundamental fairness to be unfair or the State’s choice of remedy unjust to the State—we have no warrant to substitute our judgment for what the Due Process Clause or state law would require.
V
I would hold that our decision in Scheiner need apply only where, under state law, the time for challenging the tax has not expired, or in cases brought within the time specified by
I respectfully dissent.
Justice Scalia, by contrast, agrees that the constitutionality of a state statute must be analyzed in light of our current understanding of the Constitution. Ante, at 200-201.
Our opinion today in McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, Dept. of Business Regulation of Fla., ante, at 39-40, makes clear that the Federal Constitution does not require the State to refund the entire tax that was unconstitutionally exacted from petitioners, but only to refund the discriminatory portion or otherwise adjust the tax to render it nondiscriminatory. Petitioners do not contend here that they are entitled to any greater relief as a matter of federal law. See Brief for Petitioners 38-39.
Petitioners do not contend that they are entitled to a tax refund for these taxes which were paid voluntarily prior to the institution of this lawsuit.
The plurality’s assertion to the contrary notwithstanding, see ante, at 178, Payne does not stand for the expansive proposition that federal law limits the relief a State may provide, but only for the more narrow proposition that a state court’s decision that a particular remedy is constitutionally required is itself a federal question. In this case, of course, petitioners complain that the state court erroneously decided that federal law prevented the court from applying its own retroactivity and remedial principles.
Indeed, our whole law of qualified immunity is predicated on the assumption that even “new” law decisions apply retroactively. In Owen v. City of Independence,
The decisions were Avery v. Midland County,
The Court also stated that, as a remedial matter, in States with no well-defined period for challenging bond elections, bonds issued prior to the commencement of an action would not be open to challenge on the basis of its decision.
Although the plurality makes much of the potential liability to which the State might be subject under the Due Process Clause or state law, it admits in the end that the “initial duty of determining appropriate relief” lies with the state courts, ante, at 176, and that, as the case comes to us, “the burden that the retroactive application of Scheiner would place on Arkansas cannot be precisely determined.” Ante, at 182. In any event, even if the State were to be held liable under the Due Process Clause or
Although one would not surmise it from the plurality’s treatment of the issue, the applicability of Chevron Oil has been challenged both by the parties, see Brief for Petitioners 12; Brief for Respondents 23-24, and by amici on both sides of the case, see, e. g., Brief for National Conference of State Legislatures et al. as Amici Curiae 6, 11; Brief for National Private Truck Council, Inc., as Amicus Curiae 6.
Nor do Chapman v. California,
In that respect, Chevron Oil Co. v. Huson,
Chevron Oil also relied upon the criminal cases that were overruled in Griffith v. Kentucky,
“Gelpcke v. City of Dubuque,1 Wall. 175 (1864), holds only that state courts may be compelled in some situations by particular provisions of the Federal Constitution to apply certain new rules prospectively only. . . . Great Northern R. Co. v. Sunburst Oil & Refining Co.,287 U. S. 358 (1932), merely holds that the Federal Constitution imposes no barrier to a state court’s decision to apply a new state common-law rule prospectively only. Is it not sufficient answer to the dissenters’ final assertion of prec-edential support to point out that Chicot County Drainage District v. Baxter State Bank,308 U. S. 371 (1940), was a collateral attack on a civil judgment already otherwise final and entitled to res judicata effect?” Mackey v. United States,401 U. S. 667 , 698 (1971) (opinion concurring in judgment in part and dissenting in part).