Lead Opinion
delivered the opinion of the Court.
In Davis v. Michigan Dept. of Treasury,
I
The Michigan tax scheme at issue in Davis “exempted] from taxation all retirement benefits paid by the State or its political subdivisions, but leviefd] an income tax on retirement benefits paid by . . . the Federal Government.”
Like Michigan, Virginia exempted state and local employees’ retirement benefits from state income taxation while taxing federal retirement benefits. Va. Code Ann. § 58.1— 322(c)(3) (Supp. 1988). In response to Davis, Virginia repealed its exemption for state and local government employees. 1989 Va. Acts, Special Sess. II, ch. 3. It also enacted a special statute of limitations for refund claims made in light of Davis. Under this statute, taxpayers may seek a refund
Petitioners, 421 federal civil service and military retirees, sought a refund of taxes “erroneously or improperly assessed” in violation of Davis’ nondiscrimination principle. Va. Code Ann. §58.1-1826 (1991). The trial court denied relief. Law No. CL891080 (Va. Cir. Ct., Mar. 12, 1990). Applying the factors set forth in Chevron Oil Co. v. Huson, supra, at 106-107,
The Supreme Court of Virginia affirmed. Harper v. Virginia Dept. of Taxation,
Even as the Virginia courts were denying relief to petitioners, we were confronting a similar retroactivity problem in James B. Beam Distilling Co. v. Georgia,
On remand, the Supreme Court of Virginia again denied tax relief.
When we decided Davis, 23 States gave preferential tax treatment to benefits received by employees of state and local governments relative to the tax treatment of benefits received by federal employees.
After the Supreme Court of Virginia reaffirmed its original decision, we granted certiorari a second time.
II
“[B]oth the common law and our own decisions” have “recognized a general rule of retrospective effect for the constitutional decisions of this Court.” Robinson v. Neil,
We subsequently overruled Linkletter in Griffith v. Kentucky,
Dicta in Griffith, however, stated that “civil retroactivity .. .. continue[d] to be governed by the standard announced in Chevron Oil.” Id., at 322, n. 8. We divided over the meaning of this dicta in American Trucking Assns., Inc. v. Smith,
Griffith and American Trucking thus left unresolved the precise extent to which the presumptively retroactive effect of this Court’s decisions may be altered in civil cases. But we have since adopted a rule requiring the retroactive application of a civil decision such as Davis. Although James B. Beam Distilling Co. v. Georgia,
Beam controls this case, and we accordingly adopt a rule that fairly reflects the position of a majority of Justices in Beam: When this Court applies a rule of federal law to the parties before it, that rule is the controlling interpretation of federal law and must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate our announcement of the rule. This rule extends Griffith’s ban against “selective application of new rules.”
The Supreme Court of Virginia “applied] the three-pronged Chevron Oil test in deciding the retroactivity issue” presented by this litigation.
In an effort to distinguish Davis, the Supreme Court of Virginia surmised that this Court had “made no . . . ruling” about the application of the rule announced in Davis “retroactively to the litigants in that case.”
We disagree. Davis did not hold that preferential state tax treatment of state and local employee pensions, though constitutionally invalid in the future, should be upheld as to all events predating the announcement of Davis. The governmental appellee in Davis “conceded that a refund [would have been] appropriate” if we were to conclude that “the Michigan Income Tax Act violate[d] principles of intergovernmental tax immunity by favoring retired state and local governmental employees over retired federal employees.”
Ill
Respondent Virginia Department of Taxation defends the judgment below as resting on an independent and adequate state ground that relieved the Supreme Court of Virginia of any obligation to apply Davis to events occurring before our announcement of that decision. Petitioners had contended that “even if the Davis decision applie[d] prospectively only,” they were entitled to relief under Virginia’s tax refund statute, Va. Code Ann. §58.1-1826 (1991). Harper v. Virginia Dept. of Taxation,
We reject the department’s defense of the decision below. The Supremacy Clause, U. S. Const., Art. VI, cl. 2, does not allow federal retroactivity doctrine to be supplanted by the invocation of a contrary approach to retroactivity under state law. Whatever freedom state courts may enjoy to limit the retroactive operation of their own interpretations of state law, see Great Northern R. Co. v. Sunburst Oil & Refining Co.,
We also decline the Department of Taxation’s invitation to affirm the judgment as resting on the independent and adequate ground that Virginia’s law of remedies offered no “retrospective refund remedy for taxable years concluded before Davis” was announced. Brief for Respondent 33. The Virginia Supreme Court’s conclusion that the challenged tax assessments were “neither erroneous nor improper within the meaning” of the refund statute rested solely on the court’s determination that Davis did not apply retroactively. Harper v. Virginia Dept. of Taxation, supra, at 241,
Because we have decided that Davis applies retroactively to the tax years at issue in petitioners’ refund action, we reverse the judgment below. We do not enter judgment for petitioners, however, because federal law does not necessarily entitle them to a refund. Rather, the Constitution requires Virginia “to provide relief consistent with federal due process principles.” American Trucking,
The constitutional sufficiency of any remedy thus turns (at least initially) on whether Virginia law “provide[s] a[n] [adequate] form of ‘predeprivation process,’ for example, by authorizing taxpayers to bring suit to enjoin imposition of a tax
IV
We reverse the judgment of the Supreme Court of Virginia, and we remand the case for further proceedings not inconsistent with this opinion.
So ordered.
Notes
“The United States consents to the taxation of pay or compensation for personal service as an officer or employee of the United States ... by a duly constituted taxing authority having jurisdiction, if the taxation does not discriminate against the officer or employee because of the source of the pay or compensation.” 4 U. S. C. § 111.
We have since followed Davis and held that a State violates intergovernmental tax immunity and 4 U. S. C. § 111 when it “taxes the benefits received from the United States by military retirees but does not tax the benefits received by retired state and local government employees.” Barker v. Kansas,
Applications for tax refunds generally must be made within three years of the assessment. Va. Code Ann. §68.1-1825 (1991). As of the date we decided Davis, this statute of limitations would have barred all actions seeking refunds from taxes imposed before 1985.
“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, it has been stressed that ‘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 have weighed the inequity imposed by retroactive application . . . .” Chevron Oil Co. v. Huson,
. E.g., Ala. Code § 36-27-28 (1991), Ala. Code § 40-18-19 (1985); Iowa Code § 97A.12 (1984), repealed, 1989 Iowa Acts, ch. 228, § 10 (repeal retro active to Jan. 1, 1989); La. Rev. Stat. Ann. § 47:44.1 (West Supp. 1990); Miss. Code Ann. § 25-11-129 (1972); Mo. Rev. Stat. § 86.190 (1971), Mo. Rev. Stat. § 104.540 (1989); Mont. Code Ann. § 15-30-111(2) (1987); N. Y. Tax Law § 612(c)(3) (McKinney 1987); Utah Code Ann. § 49-1-608 (1989). See generally Harper v. Virginia Dept. of Taxation,
. Bohn v. Waddell,
Several other state courts have ordered refunds as a matter of state law in claims based on Davis. See, e. g., Kuhn v. State,
Accord, e. g., Tehan v. United States ex rel. Shott,
We need not debate whether Chevron Oil represents a true “choice-of-law principle” or merely “a remedial principle for the exercise of equitable discretion by federal courts.” American Trucking Assns., Inc. v. Smith,
A State incurs this obligation when it “places a taxpayer under duress promptly to pay a tax when due and relegates him to a postpayment refund action in which he can challenge the tax’s legality.” McKesson,
Concurrence Opinion
concurring.
I am surprised to see an appeal to stare decisis in today’s dissent. In Teague v. Lane,
Contrary to the dissent’s assertion that Chevron Oil articulated “our traditional retroactivity analysis,” post, at 113, the jurisprudence it reflects “came into being,” as Justice Harlan observed, less than 30 years ago with Linkletter v. Walker,
Justice O’Connor asserts that “ ‘[w]hen the Court changes its mind, the law changes with it.’” Post, at 115 (quoting Beam, supra, at 550 (O’Connor, J., dissenting)). That concept is quite foreign to the American legal and con
Prospective decisionmaking was known to foe and friend alike as a practical tool of judicial activism, born out of disre
Justice Harlan described this Court’s embrace of the prospectivity principle as “the product of the Court’s disquietude with the impacts of its fast-moving pace of constitutional innovation,” Mackey, supra, at 676. The Court itself, however, glowingly described the doctrine as the cause rather than the effect of innovation, extolling it as a “technique” providing the “impetus ... for the implementation of long overdue reforms.” Jenkins v. Delaware,
In sum, I join the opinion of the Court because the doctrine of prospective decisionmaking is not in fact protected
The dissent attempts to distinguish between retroactivity in civil and criminal settings on three grounds, none of which has ever been adopted by this Court. The dissent’s first argument begins with the observation that “nonretroactivity in criminal cases historically has favored the government’s reliance interests over the rights of criminal defend
Contrary to the suggestion in the dissent, I am not arguing that we should “cast overboard our entire retroactivity doctrine with . .. [an] unceremonious heave-ho.” Post, at 116 (emphasis added; internal quotation marks omitted). There is no need. We cast over the first half six Terms ago in Griffith, and deep-sixed most of the rest two Terms ago in James B. Beam Distilling Co. v. Georgia,
Concurrence Opinion
with whom
I remain of the view that it is sometimes appropriate in the civil context to give only prospective application to a judicial decision. “[Pjrospective overruling allows courts to respect the principle of stare decisis even when they are impelled to change the law in light of new understanding.” American Trucking Assns., Inc. v. Smith,
I nonetheless agree with the Court that Davis v. Michigan Dept. of Treasury,
Respondent argues that two new principles of law were established in Davis. First, it points to the holding that 4 U. S. C. § 111, in which the United States consents to state taxation of the compensation of “an officer or employee of the United States,” applies to federal retirees as well as current federal employees. Brief for Respondent 16-18. See Davis,
The second new rule respondent contends the Court announced in Davis was that the state statute at issue discriminated against federal retirees even though the statute treated them like all other state taxpayers except state em
Far from being “revolutionary,” Ashland Oil Co. v. Caryl, supra, at 920, or “an avulsive change which caused the current of the law thereafter to flow between new banks,” Hanover Shoe, Inc. v. United Shoe Machinery Co.,
Because I do not believe that Davis v. Michigan Dept. of Treasury, supra, announced a new principle of law, I have no occasion to consider Justice O’Connor’s argument, post, at 131-136, that equitable considerations may inform the formulation of remedies when a new rule is announced. In any event, I do not read Part III of the Court’s opinion as saying anything inconsistent with what Justice O’Connor proposes.
On this understanding, I join Parts I and III of the Court’s opinion and concur in its judgment.
Dissenting Opinion
with whom
Today the Court applies a new rule of retroactivity to impose crushing and unnecessary liability on the States, precisely at a time when they can least afford it. Were the Court’s decision the product of statutory or constitutional command, I would have no choice but to join it. But nothing in the Constitution or statute requires us to adopt the retro-activity rule the majority now applies. In fact, longstanding precedent requires the opposite result. Because I see no reason to abandon our traditional retroactivity analysis as articulated in Chevron Oil Co. v. Huson,
I
This Court’s retroactivity jurisprudence has become somewhat chaotic in recent years. Three Terms ago, the case of American Trucking Assns., Inc. v. Smith,
If we had given appropriate weight to the principle of stare decisis in the first place, our retroactivity jurisprudence never would have become so hopelessly muddled. After all, it was not that long ago that the law of retroactivity for civil cases was considered well settled. In Chevron Oil Co., we explained that whether a decision will be nonretroactive depends on whether it announces a new rule, whether prospectivity would undermine the purposes of the
I fear that the Court today, rather than rectifying that confusion, reinforces it still more. In the usual case, of course, retroactivity is not an issue; the courts simply apply their best understanding of current law in resolving each case that comes before them. James B. Beam,
As the majority notes, ante, at 96-97, six Justices in James B. Beam, supra, expressed their disagreement with selective prospectivity. Thus, even though there was no majority
Rather than limiting its pronouncements to the question of selective prospectivity, the Court intimates that pure prospectivity may be prohibited as well. See ante, at 97 (referring to our lack of “ ‘constitutional authority ... to disregard current law’ ”); ibid, (relying on “ ‘basic norms of constitutional adjudication’” (quoting Griffith, supra, at 322)); see also ante, at 94 (touting the “fundamental rule of ‘retrospective operation’ ” of judicial decisions). The intimation is incorrect. As I have explained before and will touch upon only briefly here:
“[W]hen the Court changes its mind, the law changes with it. If the Court decides, in the context of a civil case or controversy, to change the law, it must make [a] determination whether the new law or the old is to apply to conduct occurring before the law-changing decision. Chevron Oil describes our long-established procedure for making this inquiry.” James B. Beam, supra, at 550 (O’Connor, J., dissenting) (internal quotation marks omitted).
Nor can the Court’s suggestion be squared with our cases, which repeatedly have announced rules of purely prospective effect. See, e. g., Northern Pipeline Constr. Co. v. Marathon Pipe Line Co.,
In any event, the question of pure prospectivity is not implicated here. The majority first holds that once a rule has been applied retroactively, the rule must be applied retroactively to all cases thereafter. Ante, at 97. Then it holds that Davis v. Michigan Dept. of Treasury,
Plainly enough, Justice Scalia would cast overboard our entire retroactivity doctrine with precisely the “unceremonious ‘heave-ho’ ” he decries in his concurrence. See ante, at 109. Behind the undisguised hostility to an era whose jurisprudence he finds distasteful, Justice Scalia raises but two substantive arguments, both of which were raised in James B. Beam,
“We should not indulge in the fiction that the law now announced has always been the law .... It is much more conducive to law’s self-respect to recognize candidly the considerations that give prospective content toa new pronouncement of law.” Griffin v. Illinois, 351 U. S. 12 , 26 (1956) (opinion concurring in judgment).
II
I dissented in James B. Beam because I believed that the absolute prohibition on selective prospectivity was not only contrary to precedent, but also so rigid that it produced unconscionable results. I would have adhered to the traditional equitable balancing test of Chevron Oil as the appropriate method of deciding the retroactivity question in individual cases. But even if one believes the prohibition on selective prospectivity desirable, it seems to me that the Court today takes that judgment to an illogical — and inequitable — extreme. It is one thing to say that, where we have considered prospectivity in a prior case and rejected it, we must reject it in every case thereafter. But it is quite another to hold that, because we did not consider the possibility of prospectivity in a prior case and instead applied a rule retroactively through inadvertence, we are foreclosed from considering the issue forever thereafter. Such a rule is both contrary to established precedent and at odds with any notion of fairness or sound decisional practice. Yet that is precisely the rule the Court appears to adopt today. Ante, at 96-97.
A
Under the Court’s new approach, we have neither authority nor discretion to consider the merits of applying Davis v. Michigan Dept. of Treasury, supra, retroactively. Instead, we must inquire whether any of our previous decisions happened to have applied the Davis rule retroactively to the parties before the Court. Deciding whether we in fact have applied Davis retroactively turns out to be a rather difficult matter. Parsing the language of the Davis opinion, the Court encounters a single sentence it declares determinative: “The State having conceded that a refund is appropriate in
One might very well debate the meaning of the single sentence on which everyone relies. But the debate is as meaningless as it is indeterminate. In Brecht v. Abrahamson,
In fact, there is far less reason to consider ourselves bound by precedent today than there was in Brecht. In Brecht, the issue was not whether a legal question was resolved by a single case; it was whether our consistent practice of applying a particular rule, Chapman v. California,
The Court offers no justification for disregarding the settled rule we so recently applied in Brecht. Nor do I believe it could, for the rule is not a procedural nicety. On the contrary, it is critical to the soundness of our decisional processes. It should go without saying that any decision of this Court has wide-ranging applications; nearly every opinion we issue has effects far beyond the particular case in which it issues. The rule we applied in Brecht, which limits the stare decisis effect of our decisions to questions actually considered and passed on, ensures that this Court does not decide important questions by accident or inadvertence. By adopting a contrary rule in the area of retroactivity, the
This case demonstrates the danger of such a rule. The question of retroactivity was never briefed in Davis. It had not been passed upon by the court below. And it was not within the question presented. Indeed, at oral argument we signaled that we would not pass upon the retroactivity of the rule Davis would announce. After conceding that the Michigan Department of Taxation would give Davis himself a refund if he prevailed, counsel for the department argued that it would be unfair to require Michigan to provide refunds to the 24,000 taxpayers who were not before the Court. The following colloquy ensued:
“[Court]: So why do we have to answer that at all?
“[Michigan]: —if, if this Court issues an opinion stating that the current Michigan classification is unconstitutional or in violation of the statute, there are these 24,000 taxpayers out there.
“[Court]: But that’s not — it’s not here, is it? Is that question here?
“[Michigan]: It is not specifically raised, no.” Tr. of Oral Arg., O. T. 1988, No. 87-1020, pp. 37-38.
Now, however, the Court holds that the question was implicitly before us and that, even though the Davis opinion does not even discuss the question of retroactivity, it resolved the issue conclusively and irretrievably.
If Davis somehow did decide that its rule was to be retroactive, it was by chance and not by design. The absence of briefing, argument, or even mention of the question belies any suggestion that the issue was given thoughtful consideration. Even the author of the Davis opinion refuses to ac
The Court’s decision today cannot be justified by comparison to our decision in Griffith v. Kentucky,
Nor can the Court’s rejection of selective retroactivity in the civil context be defended on equal treatment grounds. See Griffith, supra, at 323 (selective retroactivity accords a benefit to the defendant in whose case the decision is announced but not to any defendant thereafter). It may well
If the Court is concerned with equal treatment, that difference should be dispositive. Having failed to demand the unusual, prospectivity, respondent in Davis got the usual— namely, retroactivity. Respondent in this case has asked for the unusual. In fact, respondent here defends a judgment below that awarded it just that. I do not see how the principles of equality can support forcing the Commonwealth of Virginia to bear the harsh consequences of retroactivity simply because, years ago, the Michigan Department of Taxation failed to press the issue — and we neglected to consider it. Instead, the principles of fairness favor addressing the contentions the Virginia Department of Taxation presses before us by applying Chevron Oil today. It is therefore to Chevron Oil that I now turn.
B
Under Chevron Oil, whether a decision of this Court will be applied nonretroactive^ depends on three factors. First, as a threshold matter, “the decision to be applied nonretroactively must establish a new principle of law.”
As Justice Kennedy points out in his concurrence, ante, at 111, a decision cannot be made nonretroactive unless it announces “a new principle of law.” Chevron Oil,
Nonetheless, Chevron also explains that a decision may be “new” if it resolves “an issue of first impression whose resolution was not clearly foreshadowed.” Chevron Oil, supra, at 106 (emphasis added). Thus, even a decision that is “controlled by the . . . principles” articulated in precedent may announce a new rule, so long as the rule was “sufficiently debatable” in advance. Arizona Governing Comm. for Tax Deferred Annuity and Deferred Compensation Plans v. Norris,
“[T]he fact that a court says that its decision ... is ‘controlled’ by a prior decision, is not conclusive for purposes of deciding whether the current decision is a ‘new rule’ .... Courts frequently view their decisions as being ‘controlled’ or ‘governed’ by prior opinions evenwhen aware of reasonable contrary conclusions reached by other courts.” Butler v. McKellar, 494 U. S. 407 , 415 (1990).
In Butler, we determined that the rule announced in Arizona v. Roberson,
In any event, Justice Stevens certainly thought that Davis announced a new rule. In fact, he thought that the rule was not only unprecedented, but wrong: “The Court’s holding is not supported by the rationale for the intergovernmental immunity doctrine and is not compelled by our previous decisions. I cannot join the unjustified, court-imposed restriction on a State’s power to administer its own affairs.”
An examination of the decision in Davis and its predecessors reveals that Davis was anything but clearly foreshadowed. Of course, it was well established long before Davis that the nondiscrimination principle of 4 U. S. C. §111 and the doctrine of intergovernmental immunity prohibit a State from imposing a discriminatory tax on the United States or
As Justice Stevens explained more thoroughly in his Davis dissent,
There can be no doubt that the taxation scheme at issue in Davis and the one employed by the Commonwealth of
In addition, distinguishing between taxation of state retirees and all others, including private and federal retirees, was justifiable from an economic standpoint. The State, after all, does not merely collect taxes from its retirees; it pays their benefits as well. As a result, it makes no difference to the State or the retirees whether the State increases state retirement benefits in an amount sufficient to cover taxes it imposes, or whether the State offers reduced benefits and makes them tax free. The net income level of the retirees and the impact on the state fisc is the same. Thus, the Michigan Department of Taxation had a good argument that its differential treatment of state and federal retirees was “directly related to, and justified by, [a] significant differenc[e] between the two classes,” id., at 816 (internal quotation marks omitted): Taxing federal retirees enhances the State’s fisc, whereas taxing state retirees does not.
I recite these arguments not to show that the decision in Davis was wrong — I joined the opinion then and remain of the view that it was correct — but instead to point out that the arguments on the other side were substantial. Of course, the Court was able to “ancho[r] its decision in precedent,” ante, at 112 (Kennedy, J., concurring in part and con
2
The second Chevron Oil factor is whether denying the rule retroactive application will retard its operation in light of the rule’s history, purpose, and effect.
“[T]he purpose of the immunity was not to confer benefits on the employees by relieving them from contributing their share of the financial support of the other government . . . , but to prevent undue interference with the one government by imposing on it the tax burdens of the other.” Graves v. New York ex rel. O'Keefe,306 U. S. 466 , 483-484 (1939) (footnote omitted).
Accord, Davis, supra, at 814 (“[intergovernmental tax immunity is based on the need to protect each sovereign’s governmental operations from undue interference by the other”). Affording petitioners retroactive relief in this case would not vindicate the interests of the Federal Government. Instead, it lines the pockets of the Government’s former employees. It therefore comes as no surprise that the United States, despite its consistent participation in intergovernmental immunity cases in the past, has taken no position here. Because retroactive application of the rule in Davis serves petitioners’ interests but not the interests intergov
3
The final factor under Chevron Oil is whether the decision “ ‘could produce substantial inequitable results if applied retroactively.’” Chevron Oil, supra, at 107 (quoting Cipriano v. City of Houma,
Those same considerations exist here. Retroactive application of rulings that invalidate state tax laws have the potential for producing “disruptive consequences for the State[s] and [their] citizens. A refund, if required by state or federal law, could deplete the state treasuries], thus threatening the State[s’] current operations and future plans.” American Trucking Assns., Inc. v. Smith,
It cannot be contended that such a burden is justified by the States’ conduct, for the liability is entirely disproportionate to the offense. We do not deal with a State that willfully violated the Constitution but rather one that acted entirely in good faith on the basis of an unchallenged statute. Moreover, during the four years in question, the constitutional violation produced a benefit of approximately $8 million to $12 million per year, Tr. of Oral Arg. 33, 36, and that benefit accrued not to the Commonwealth but to individual retirees.
Petitioners, in contrast, would suffer no hardship if the Court refused to apply Davis retroactively. For years, 23 States enforced taxation schemes like the Commonwealth’s in good faith, and for years not a single taxpayer objected on intergovernmental immunity grounds. No one put the States on notice that their taxing schemes might be constitutionally suspect. Denying Davis retroactive relief thus would not deny petitioners a benefit on which they had relied. It merely would deny them an unanticipated windfall. Because that windfall would come only at the cost of imposing hurtful consequences on innocent taxpayers and the communities in which they live, I believe the substantial inequity of imposing retroactive relief in this case, like the other Chevron factors, weighs in favor of denying Davis retroactive application.
Ill
Even if the Court is correct that Davis must be applied retroactively in this case, there is the separate question of the remedy that must be given. The questions of retroactivity and remedy are analytically distinct. American Trucking Assns., Inc. v. Smith, supra, at 189 (plurality opinion) C‘[T]he Court has never equated its retroactivity principles with remedial principles”). As Justice Souter explained in James B. Beam, supra, at 534, retroactivity is a matter of choice of law “[sjince the question is whether the court
The question of remedy, however, is quite different. The issue is not whether to apply new law or old law, but what relief should be afforded once the prevailing party has been determined under applicable law. See James B. Beam,
While the issue of retroactivity is properly before us, the question of remedies is not. It does not appear to be within the question presented, which asks only if Davis may be applied “nonretroactively so as to defeat federal retirees’ entitlement to refunds.” Pet. for Cert. i. Moreover, our consideration of the question at this juncture would be inappropriate, as the Supreme Court of Virginia has yet to consider what remedy might be available in light of Davis’ retroactivity and applicable state law. The Court inexplicably discusses the question at length nonetheless, noting that if the Commonwealth of Virginia provides adequate predeprivation remedies, it is under no obligation to provide full retroactive refunds today. Ante, at 100-102.
When courts take it upon themselves to issue helpful guidance in dictum, they risk creating additional confusion by
Over 20 years ago, Justice Harlan recognized that the equities could be taken into account in determining the appropriate remedy when the Court announces a new rule of constitutional law:
“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.” United States v. Estate of Donnelly,397 U. S. 286 , 296 (1970) (concurring opinion).
The commentators appear to be in accord. See Fallon & Meltzer, New Law, Non-Retroactivity, and Constitutional Remedies, 104 Harv. L. Rev. 1733 (1991) (urging consideration of novelty and hardship as part of the remedial framework rather than as a question of whether to apply old law or new). In my view, and in light of the Court’s revisions to the law of retroactivity, it should be constitutionally permissible for the equities to inform the remedial inquiry. In a particularly compelling case, then, the equities might permit a State to deny taxpayers a full refund despite having refused them predeprivation process.
Indeed, some Members of this Court have argued that we recognized as much long ago. In American Trucking Assns.,
The Court cites only a single case that might be read as precluding courts from considering the equities when selecting the remedy for the violation of a novel constitutional rule. That case is McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, supra. Ante, at 101-102. But, as the controlling opinion in James B. Beam explains, McKesson cannot be so read.
The circumstances in McKesson were quite different than those here. In McKesson, the tax imposed was patently unconstitutional: The State of Florida collected taxes under its Liquor Tax statute even though this Court already had invalidated a “virtually identical” tax. Id., at 46. Given that the State could “hardly claim surprise” that its statute was declared invalid, this Court concluded that the State’s reliance on the presumptive validity of its statute was insufficient to preclude monetary relief. Ibid. As we explained in American Trucking Assns., the large burden of retroactive relief is “largely irrelevant when a State violates constitutional norms well established under existing precedent.” We cited McKesson as an example.
A contrary reading of McKesson would be anomalous in light of this Court’s immunity jurisprudence. The Federal Government, for example, is absolutely immune from suit absent an express waiver of immunity; and federal officers enjoy at least qualified immunity when sued in a Bivens action. Bivens v. Six Unknown Fed. Narcotics Agents,
In my view, if the Court is going to restrict authority to temper hardship by holding our decisions nonretroactive through the Chevron Oil factors, it must afford courts the ability to avoid injustice by taking equity into account when formulating the remedy for violations of novel constitutional rules. See Fallon & Meltzer, 104 Harv. L. Rev. 1733 (1991). Surely the Constitution permits this Court to refuse plaintiffs full backwards-looking relief under Chevron Oil; we repeatedly have done so in the past. American Trucking Assns., supra, at 188-200 (canvassing the Court’s practice); see also supra, at 115-116, 129. I therefore see no reason why it would not similarly permit state courts reasonably to consider the equities in the exercise of their sound remedial discretion.
IV
In my view, the correct approach to the retroactivity question before us was articulated in Chevron Oil some 22 years ago. By refusing to apply Chevron Oil today, the Court not only permits the imposition of grave and gratuitous hardship on the States and their citizens, but also disregards settled precedents central to the fairness and accuracy of our decisional processes. Nor does the Court cast any light on the nature of the regime that will govern from here on. To the contrary, the Court’s unnecessary innuendo concerning pure prospectivity and ill-advised dictum regarding remedial issues introduce still greater uncertainty and disorder into this already chaotic area. Because I cannot agree with the Court’s decision or the manifestly unjust results it appears to portend, I respectfully dissent.
Swanson v. Powers,