*1 SHEEHY, EDMUND F. FLEMING,
MARGARET McGOVERN, ZACK, DONALD GEORGE BRANCH, RICHARD G. VanDIEST,
CHARLES W. and WIRTALA, ARNOLD S.
on behalf of similarly and all other themselves employees,
situated federal both civil service
military residing employees, Montana,
State of who have been subjected paying state income tax pensions,
on their
Appellants,
Plaintiffs and
MONTANA,
STATE OF
REVENUE,
DEPARTMENT OF
Agency
a State
within the
Government,
Executive Branch of State
Montana,
of the State of
Respondents.
Defendants
No. 90-450.
Aug.
Submitted
1991.
Decided Nov.
1991.
Edmund Sheehy, argued, Sheehy, F. Cannon & for plaintiffs appellants. Revenue, Helena, argued, Department
R. Bruce McGinnis for respondents. defendants and Opinion
JUSTICE WEBER delivered the of the Court. case, In this we affirm a decision ofthe District Court for First District, County, plaintiffs Judicial Lewis and Clark are paid years through entitled to refunds for state taxes for the 1988 on their retirement benefits received under the Federal Employees’ Retirement Act.
The issue is whether the of the United States (1989), Treasury Department Court Davis 891, 803, 1500, L.Ed.2d should be U.S. paid previous to refunds for taxes applied, entitling plaintiffs years. for petition who filed a
Plaintiffs are retired federal 15-30-lll(2)(c)(i), (1989), MCA declaratory seeking to have § relief Montana provided declared unconstitutional. That statute state under income tax would be assessed on benefits received the Federal $3,600. contrast, Employees’ Retirement Act in excess of under 19-3-105, (1989), MCA all retirement benefits received under Employees’ System exempt Montana’s Retirement were Public from and local taxes. state
Following the decision of the United States Court in Davis in Court adopted parties’ stipula- March District 15-30-lll(2)(c)(i), (1989), tion to the effect MCA is invalid for years commencing plaintiffs after December 1988. The then summary judgment moved for that Davis should be retroac- tively they and that are previous years, entitled refunds for (In subject to the statute limitations. the state had conceded years that refunds previous proper would be if the court found for plaintiffs.)
Using LaRoque the factors set forth in v. State 178 Mont. 583 P.2d the District Court determined that Davis should applied retroactively. not be The court ruled that the Davis decision predictable neither nor It *3 foreshadowed. decided that retroactive promote Davis would not the doctrine of intergovernmental tax immunity already because it required had that, future, federal and state retirees be treated the must Finally, adding same. it stated that the cost of refunds to Montana’s budget inequitable deficit would be to the citizens ofMontana. Plain- appeal. tiffs Supreme
Should the United in opinion States Court’s Davis be applied retroactively, plaintiffs entitling the to refunds for paid taxes previous years? in major
Wewill first review the elements ofthe ofthe United Supreme case, States Court that plaintiffs challenged inDavis. In Michigan a tax scheme exempted which from state taxation all paid by retirement employees benefits the state to its retired but by taxed retirement benefits other paid employers, including the government. upheld federal The Court of Appeals the tax scheme, that, did not ruling that U.S.C. Ill to retirees and test, taxing under a rational basis scheme not unconstitu- attracting tional because it furthered the state’s interest in retaining qualified employees. Michigan Court denied granted certiorari The United States appeal. leave to reversed, Michigan tax scheme violated holding immunity. intergovernmental tax concept of Kennedy disposed first opinion, Justice delivering In the Court’s only current Ill to argument applies that 4 U.S.C. § of the State’s that statute government. part, relevant employees of the federal provides: pay compensation the taxation of or United States consents to
“The the United States ... employee an or service as officer personal for if the authority having jurisdiction, taxing duly a constituted be- employee the officer or against not discriminate taxation does pay compensation.” or cause of the source The Court stated that: retirement concluding that civil service difficulty no
“We have
years of service rendered
past
compensation
are deferred
benefits
And
these benefits
omitted.]
[Citations
the Government.”
Government,
to the
account of their service
accrue to
on
for services
category
compensation
they fall
within the
squarely
”
of the United States.’
employee
‘as an officer or
rendered
The Court then went
at 1503-04.
Davis, 489 U.S. at
to retire-
applies
clause
that the nondiscrimination
on to conclude
“pay
are included
retirement benefits
ment benefits because
Davis,
809,
The Court then stated *4 Instead, the test in Davis. “inappropriate” cases was protection justified related to and tax treatment the inconsistent whether Davis, 489 U.S. the two classes. between differences significant 816, 109 at 1508. S.Ct. at present not were differences significant
The Court concluded
of
principles
act in
violated
question
that therefore the tax
and
Davis,
109 S.Ct.
immunity.
proceedings.
remanded the case for further
at 1508. The Court
attention to the United States
Plaintiffs also direct the Court’s
Georgia
v.
opinion
Distilling
in James B. Beam
Co.
Supreme Court’s
2439, 115
U.S._,
L.Ed.2d 481. The
S.Ct.
20, 1991,
in the
argument
on June
after oral
Jim Beam was issued
Beam,
error
refuse to
case. In Jim
the Court held that it is
to
present
announcing
after the case
the
a rule offederal law
dispositive
that rule is
already
argue
rule has
done so. Plaintiffs
retroactively here
the decision in Davis must be
sup
applied retroactively
parties
was
in that case. Both
submitted
case.
discussing
application
the
of Jim Beam to this
plemental briefs
decided, pending
applica
Jim Beam
before the Court on
When
tions for certiorari were two cases in which retired federal
Virginia
in South Carolina and
seek refunds of state income taxes
argued
under theories similar to those
here. After Jim Beam was
decided,
cases,
granted
the Court
certiorari in both of those
vacated
refunds,
denying
the state court decisions
and remanded the cases to
light
state courts for “further consideration” in
ofJim Beam. Bass
(1991),_U.S._,
v. State
South Carolina
of
1047;
(1991),_U.S._,
Harper Virginia
L.Ed.2d
111S.Ct.
The fact that Harper Court remanded Bass simply reversing uncertainty rather than them indicates Court’s retroactivity. s applies as to whether Jim Beam issue Davis’ conclude that it the State had conceded apply. We does appropriate appellants. that a refund was if the Court ruled for the concession, at 1508. Because ofthat application the Court did retroactive not consider issue whether authority granted. should be therefore conclude that Davis is not We retroactively. underpinnings of its rule decisis and the decision Jim Beam are doctrine stare Beam, 111 similarly litigants. all situated Jim principle equality upon S.Ct. at 2446. Because Davis did not rule the issue of retroac apply. decisis does not tivity, we conclude that the doctrine of stare treatment principle equality equal We conclude that litigants, that all future similarly litigants require situated does not case, stipula are bound including litigants present Michigan in Davis. tion of the State of set application of the law We now consider whether retroactive *5 442
forth in Davis
appropriate
in this
In
case. Chevron Oil v. Huson
(1971),
97,
349,
404
U.S.
92 S.Ct.
30 L.Ed.2d
the United States
Supreme Court recognized three factors to be considered before a rule
of nonretroactive application
judicial
of a
decision adopted.
Those
1)
factors are whether the decision
principle
establishes a new
of law
by overruling
either
precedent
litigants
established
on which
have
relied,
by deciding
an issue of
impression
first
whose resolution
foreshadowed,
was not
thereby leading to the conclusion that the
2)
decision should
applied retroactively;
not be
whether retroactive
application will further or retard operation of the rule in question;
3)
and
whether
inequity
substantial
will result from retroactive
Chevron,
106-07, 92
application.
404 U.S. at
S.Ct. at 355. Use ofthese
adopted by
three factors was
this
in LaRoque,
Court
In its first
pointed
Davis Court
out that while
pay
actually
retirement
is not
disbursed
in-
dining the time an
working
government,
dividual is
for the
the amount of benefits to be
received in
computed upon
retirement are based and
the individual’s
salary
years
and
of service. The
“had
difficulty” concluding
no
that civil service retirement benefits are deferred
compensation
years
past
category
of service and therefore fall within
compen-
employee
sation for services rendered as an officer or
of the United
conclusion,
authority
States. As
for that
circuit
three federal
cases
were cited.
The second extension of law took when the Court established the connection between the doctrine intergovernmen- immunity tal tax and the protection against discriminatory taxation ofindividuals under 4 U.S.C. argue Ill. Plaintiffs that the doctrine intergovernmental tax immunity protect had been extended to individuals at least since Phillips the decision in Chemical Co. Independent Dumas School Dist.
“[I]t is reasonable to conclude that Congress
upon
drew
the con-
[of
stitutional doctrine
immunity]
defining
the scope
*6
immunity
Hence,
retained in Ill
....
§
we conclude
the retention of immunity in
Ill
is coextensive with the
§
prohibition against discriminatory taxes embodied in the modern
constitutional doctrine of intergovernmental
immunity.”
tax
Davis,
The third extension prior law made in Davis follows from the first two extensions. In determining whether the state tax dis against criminated federal employees, the Court decided that a “significant difference” standard should be used rather than one of typically applied standards in equal protection plaintiffs cases. As point out, “significant a difference” standard had been used in mat ters involving intergovernmental immunity. tax Phillips, See U.S. at However, S.Ct. at 481. in taxation cases in which equal protection issue, is at the Court had used as a standard the reasonableness of the classification. See Lehnhausen v. Lake Shore 356, 359-60, 93 Auto Parts Co. 1001, 1003-4, 35 L.Ed.2d 355. Until the Court determined in Davis that retire ment protected benefits are under 4 U.S.C. 111and protec tions under that statute are coextensive provided with those under the doctrine intergovernmental immunity, tax the standard of analysis was not clear.
The in Davis describes the view rejected which the contention that the doctrine of immunity rendered the Michigan tax unconstitutional as follows: “The Michigan Court of Appeals rejected next appellant’s contention that the doctrine of
rendered the state’s tax treatment of federal retirement benefits
if it
Conceding
may
that ‘a tax
be held invalid ...
unconstitutional.
government
the federal
and those
operates
against
to discriminate
deals,’...
justifications
it
the court examined the State’s
whom
a
test. Ibid. The Court
for the discrimination under
rational-basis
‘attracting
retaining
that the State’s interest in
and
...
determined
objective
is
qualified employees’
‘legitimate
was a
state
which
offering economic
rationally
plan
achieved
a retirement
inducements,’
upheld
and it
the statute.”
Using
equal protection
an
“The State to two First, interest suggests retirees. the State that its federal and state through civil servants the induce hiring retaining qualified justify retirement benefits is sufficient to exemption ment of a tax for employees. argument ofits retired This preferential treatment however, nothing for it does to demonstrate wholly point, beside the them differences between the two classes’ ‘significant that there are rational selves; rather, merely that the State has a demonstrates groups two similar retirees. discriminating between reason tax, discriminatory no matter how adopting interest in State’s substantial, inquiry an into the nature simply irrelevant to *7 (Emphasis supplied.) treatment.” receiving inconsistent two classes Thus, appears it Davis, 816, 109 S.Ct. at 1508. while constitutional tax statutes would have been Michigan’s the State of pass could not analysis, the tax statutes equal protection under an must be which the Court concluded “significant difference” test the applied. Phillips, Davis, distinguished in Justice Stevens
In his dissent “significant the precedent as for use of majority relied upon which only on lessees imposed In the tax was Phillips, standard. difference” stated that: Justice Stevens property. of federal who do private parties or can tax federal “The States not dis- long as the tax does United States so with the business down today strikes States ... The against the United criminate Michigan majority of to the vast applies equally tax that a state residents, including federal it treats retired employees, state employees differently employees. from retired federal The Court’s holding supported by is not the rationale for the immunity compelled by previous doctrine and is not our I decisions. join unjustified, court-imposed cannot restriction on a State’s power to administer its own affairs. equally by agents
"... When the tax burden is shared federal citizens, however, vast of State’s the nondiscrimination principle applicable is not protection and constitutional is not neces- sary.
“The tax here applies approximately million in- 4V2 State, 24,000 dividual in taxpayers including retired federal 130,000 employees. exempts only It retired employees. state Once one underlying understands the reason Maryland, [v. for McCulloch (1819)] 4 Wheat holding, L.Ed. 579 it that this tax does unconstitutionally not against discriminate federal employees.” Injustice 818-21, 109 S.Ct. at 1509 -11. Stevens’ view the Court’s is not supported the rationale for the doctrine and is compelled by previous Court’s decisions. Under the equal established protection analysis, the Michigan tax scheme appeared constitution al, it “significant but failed the difference” test which the Court applied. Applying the first factor under Chevron to this aspect, appears that Davis did establish a principle new of law. argue
Plaintiffs further
the issue of whether the Davis
decision was
foreshadowed is controlled
this Court’s
in
Jenson v.
Dept.
State
Labor
Industry
84, 689
213 Mont.
P.2d
remand,
Jenson,
Mont.
However, Davis,
pointed out,
as the State has
there was an
step.
additional
4 U.S.C. 111 prohibits discriminatory
taxation of
“pay
compensation”
received
government.
from the federal
Court held that federal retirement benefits were included in “pay or
compensation”
so that U.S.C. 111 applied.
We conclude that this Court’s Further, because the Davis as to whether Davis was foreshadowed. previous at least three extensions of law as dis- opinion required above, clearly foreshadowed. cussed we hold that the result was not retroactive The second element of the Chevron test is whether of the rule in operation question. will further or retard that it could not “see how a retroactive The District Court stated way any promote” decision would in application of Davis immunity. argue tax Plaintiffs that “the concept if for 4 U.S.C. 111 would be condoned Davis disregard state’s total retroactively.” applied is not that the decision in Davis was not
Because we have concluded foreshadowed, imposed that the tax was plaintiffs’ assertion “illegal” not illegal an overstatement. The taxation scheme was issued, imposed not decision was and the tax has been until refunds, retroactive conclude that as a result of since that time. We inter- promote concept not application of would immunity. governmental tax Chevron, the District Court considering the third factor under due to the that refunds not be made equity that directed
concluded Plaintiffs the State of Montana. on the citizens of financial burden it is Montana’s making favors refunds because argue equity But, we illegally collected taxes. as provide refunds of public policy above, in Davis were taxes collected before have discussed taxes. illegally collected time and the date Ill enacted in 1939. Between that 4 U.S.C. enacted and used decision, twenty-two other states of the Davis retirees over Montana’s, advantages to state giving much like plans usage that, acceptance in of the We conclude view other retirees. inequitable to years, it would be approximately plans similar tax necessity when those refunds would refunds to federal retirees provide taxpayers. of all Montana expense made at the Chevron, we conclude set out in considering the three factors After Davis should concluding in Court did not err that the District court did not hold that the retroactively. We therefore not be tax refunds for are not entitled to ruling plaintiffs err in through 1988. years McDONOUGH, TURNAGE and JUSTICES JUSTICE
CHIEF HARRISON, GULBRANDSON, Retired, sitting in for JUSTICE L.C. JUSTICE Retired, sitting in for McNEIL, Judge, District and C.B. concur. HUNT GRAY,concurring
JUSTICE
part
dissenting
part:
I concur
that part
majority’s opinion
which holds that
*9
James B. Beam Distilling
Georgia (1991),
U.S._,
Co. v.
501
111
2439,
481,
S.Ct.
115 L.Ed.2d
is not applicable to the issue of the
retroactivity
Michigan Department
(1989),
ofDavis v.
Treasury
803,
1500,
U.S.
However,
I
the majority
with
that the determination of whether the
United States Supreme Court’s decision in
applied
Davis is to be
only
or
prospectively
governed
by the three-pronged
test enunciated in
(1971),
Chevron Oil Co. v. Huson
30 L.Ed.2d
by
296 and utilized
this Court in LaRoque v.
State
178 Mont.
However,
For a
decision to be
only prospectively, the first prong of
the Chevron
requires
test
that the decision “establish a
principle
new
law,
by
either
overruling clear past precedent on which litigants
may
have relied ... or
deciding an issue of first impression whose
resolution
clearly
was not
Chevron,
foreshadowed.”
The states that the Davis decision clearly was not foreshadowed on the bases that in order to reach its decision in (1) the Supreme Court had to extend 4 U.S.C. Ill to federal retirees (2) receiving pension benefits; extend the doctrine of intergovernmen- tal tax immunity to employees governmental entity, as well as (3) itself; the entity decide that the proper standard for determin- ing validity of a state statute where immunity is involved is a “significant standard, difference” rather than a rational basis standard. The majority also states that the fact twenty-three states, including Montana, had tax schemes invalidated in Supreme which the Court
similar to that of in Davis was support lends to its conclusion clearly foreshadowed. itself, decision reading of the Davis my It is view that decisions, leads Court Supreme United States together previous the Davis decision was irrefutable conclusion that to the conclusion, Contrary majority’s foreshadowed. 111 to federal retirees “extend” 4 U.S.C. § in Davis did not very clear Court made
receiving pension benefits.
employees
pension
and to
past
to both current and
applies
that §
plain language
the statute:
upon
based
benefits
only to
matter,
argues
applies
that 111
the State
“As a threshold
Government, not to retirees such
of the Federal
current
however,
of the statute
view,
plain language
In our
appellant.
as
applies
terms
Section Ill
its
conclusion.
opposite
dictates the
as an
services
pay
compensation
personal
or
‘the taxation of
officer
the United States.’
employee
*10
retirement
concluding that civil service
difficulty
have no
“We
of service rendered
past years
for
compensation
are deferred
benefits
[Emphasis
original.]
the Government.”
to
808,
1503-04.
Davis,
“On its
Ill purports
nothing
to be
partial
more than a
congressional consent to nondiscriminatory state taxation of federal
employees. It can
argued, however,
by
negative implication
Ill§
also constitutes an
statutory
affirmative
grant of immunity
discriminatory
from
state
to,
taxation in addition
and coextensive
with,
pre-existing
protection
by
afforded
the constitutional
Regardless
doctrine.
provides
whether
Ill
independent
an
basis
finding immunity merelypreserves
the traditional constitution-
prohibition
al
against
taxes, however,
discriminatory
inquiry
case,
the same. In either
scope
granted or
by
retained
the nondiscrimination clause is to
by
be determined
reference to the
Thus,
constitutional doctrine.
the dispositive ques-
tion in this case is whether the tax imposed on appellant
is barred
the doctrine of intergovernmental
tax immunity.” [Emphasis added.]
813-14,
“It is true tax immunity is based on the need protect each sovereign’s governmental operations from undue interference the other. Graves People [v. ex rel. O’Keefe],306 U.S. [466], at [59 927]; 83 L.Ed. McCulloch v. Maryland, 4 Wheat., [316] 435-436, [17 U.S. 4 L.Ed. 579], But it does not *11 follow that private entities or individuals subjected who are to dis- criminatory taxation on account of their dealings with a sovereign cannot themselves receive the protection of the constitutional precedent doctrine. Indeed all contrary. is to the In Phillips Chemical Co., supra, for example, we considered a private corporation’s claim that a state tax against private discriminated lessees of federal land. We concluded that the tax unconstitutionally “discriminate[d] against lessee,” the United States and its and accordingly held that . U.S., [80 481] at S.Ct. at ... exacted. 361
the tax could
be
departing
from
in
The State offers no reasons
[Emphasis
original.]
added.]
rule,
[Emphasis
decline to do so.”
this settled
and we
814-15,
Again, assuming the
I also decide that Supreme Court had to because clearly foreshadowed validity the state tax determining the standard for proper standard, a rational rather than difference” “significant scheme is a made it clear that the Court in Davis The basis standard. standard to be when proper existing authority. settled under
is involved was a heavier tax burden on imposition of precedents, £[t]he “Under our on who imposed [those than is sovereign] deal with one [those who differences justified by significant other] must deal with Dumas Inde Chemical Co. v. Phillips classes.’ between the two 479.] In determin Dist., U.S., [80 S.Ct. at at 383 pendent School met, it is justification has been standard of ing whether this in analysis developed our solely the mode of rely on inappropriate ‘our previously observed cases. We have equal protection necessarily controlling are not field equal protection] [the in decisions involved,’ immunity are problems where weighed balance.’ interests must be ‘the Government’s Instead, inquiry is whether the relevant Id., 480]. at [80 at S.Ct. by, to, justified directly related tax treatment is the inconsistent 383-385, Id., the two classes.’ differences between ‘significant added.] [Emphasis at 479-80.” The Court was at 1508. at 815-16. 109 S.Ct. Independent Dumas Co. v. Phillips Chemical citing its decision 474, 4L.Ed.2d decided (1960), 361 U.S. Dist. School applica Thus, Supreme Court’s thirty years before Davis. nearly in Davis was standard “significant difference” tion existing precedent. this light foreshadowed states’) (and other the State’s weight on places great Ill with nature of U.S.C. § uncontested the previously reliance on view, the fact that my federal retirees. to its respect similar Montana, had tax schemes states, including twenty-three than that nothing more conclusive of in Davis is one invalidated *12 follow, impression. an issue first It does not as the Davis decided of majority opinion implies, that the Davis decision was not involved, of the language Where the statute foreshadowed. together existing particular holding, a as precedent, with mandates clearly prevalence was in the of the irrelevant wrong shown is to the whether determination of
foreshadowed. test,
In the prong second of the Chevron applying application concludes that promote retroactive ofDavis would not immunity. my view, tax I concept disagree. of In immunity ofintergovernmental only doctrine can furthered be by the application Refusing retroactive of Davis. retroactively means that this Court has condoned the State’s total disregard the plain language of 4 akin U.S.C. and is to a past continuation of a discrimination. Such result does not further and, indeed, retards the doctrine of
in that it not tend does to deter future State violations ofthe doctrine. test,
With
to the
respect
prong
disagree
third
ofthe Chevron
I
the majority’s conclusion
in
equities
this
a non-
case favor
application
retroactive
considering
equities
of Davis. In
of
judicial decision,
retroactive
of a
I am fully aware that
great
must
weight
given
reliance upon presump
State’s
a
tively
statute,
in good
valid
enacted
faith and
plainly
no means
(1973),
Lemon
See
v.Kurtzman
411 U.S.
unlawful.
However,
It is as the majority that refunds to the federal retirees would result in a taxpayers State; financial burden on the other theof true, however, it also taxpayers greatly that those have benefited from the overpayment years. federal retirees’ of taxes over many any event, the taxpayers’ exposure disruptive State’s and to the impact of the tax scheme’s invalidation is limited five-year statute limitations.
Furthermore, necessarily the State would not have to refund the unconstitutionally collected taxes. The federal have indi- retirees willingness cated accept their a tax credit mechanism lieu of which, view, possible remedy my actual as a has the refunds stability even potential softening impact on the State’s financial more. that,
Finally, recognized notwithstanding the financial must be State, wrought upon to the have impact inequities substantial been period many years. paid the federal over a who retirees Retirees discriminatory tax and have left Montana or died would since a remedy proper receive no even under resolution ofthis case. Others only discriminatory small taxes portion would receive back *13 they fashioned, no of the paid, remedy might matter what be that majority statute of limitations. How the can conclude applicable State, to the “equities” prong opposed the Chevron favors the as by the wrongfully against federal retirees who were discriminated State, simply beyond my understanding. hold that judgment
I would reverse the of the District Court and test, applied under the the decision is to be retroac- Chevron tively. Having held, I would this case to the District Court so remand remedy provided the to to the federal proper for determination of retirees. TRIEWEILER, dissenting:
JUSTICE opinion in majority entirety. I dissent from the its Gray’s opinion concludes part I concur with that of Justice which (1989), Michigan Treasury case v. Department of Davis 891, 803, 1500, U.S. S.Ct. L.Ed.2d should be 489 109 103 set in Chevron Oil upon three-prong based the test forth (1971), 97, 349, 404 L.Ed.2d 296. Company v. Huson U.S. 30 Contrary majority’s the result in Davis was argument, by 4 111 and by of U.S.C. clearly language foreshadowed § Phillips Company in Chemical Supreme prior Court’s decisions 387, (1960), 376, 80 v. Dumas School District Independent 384, Trust 474, 481, 391-92, Memphis Bank and 4 L.Ed.2d S.Ct. 692, 392, 696 (1983), 459 397 n. Company v. U.S. Garner 562, 7. 74 L.Ed.2d 567 n. n. Supreme in Davis: pointed by
As
Court
out
the nondis-
together
Ill
read
part
“When
first
§
statute are as follows:
clause,
operative
of the
crimination
words
...
pay
compensation
or
consents to the taxation
The United States
of the
of the source
taxation
not discriminate ... because
if the
does
”
compensation.’
pay
at 901.
809,
Having pointed agree out that I Gray’s thorough with Justice analysis of the Chevron test for retroactivity, and concluding that that requires test retroactive application of I do not feel it is necessary to apply analysis. the Chevron United States recently Court has gone even further *14 to make clear that the result majority arrived at the in this case is incorrect.
In James B. Beam Distilling Company (1991), Georgia v. _U.S._, 2439, 111 481, S.Ct. 115 L.Ed.2d the United States Supreme Court dealt with a similar regarding retroactivity. issue case,
In the Beam the Court was asked to decide whether its Imports, (1984), decision in Bacchus 263, Ltd. v. Dias 468 U.S. 104 L.Ed.2d apply retroactively should to claims based on facts preceded which that decision. The effect of the Bacchus decision was to hold that state imposed laws which an excise tax on alcoholic imported beverages greater at a rate than those on imposed beverages alcoholic manufactured within that state violated the Commerce of Clause the United Following States Constitution. the decision, Bacchus the petitioner in Beam Georgia’s claimed that law violation, and, to the same basis, amounted on sought that a refund of the taxes it had previously paid years 1982,1983, and 1984. however, state in Georgia, The courts apply refused to Bacchus for 454 years
the
in question
upon
analysis
based
their
of Chevron Oil
Company
v. Huson
404 U.S.
92 S.Ct.
Beam Supreme writ certiorari. The United States granted Court Beam’s petition Supreme and reversed the Court of Georgia on June 1991. arriving decision, Supreme its Court concluded that specifies unless it that prospective only, they its decisions are are to applied retroactively. be It furthermore stated that where its applied retroactively litigants, they decisions are to one set of must applied retroactively be similarly persons to situated who are not procedurally Particularly barred from asserting rights. their relevant limits holding this case was the Court’s decision its possible applications analysis. Supreme ofthe Chevron Oil part stated in as follows:
“Questions
remedy aside,
fairly
Bacchus is
read to hold as a
choice
retroactively
litigants
of law that its rule should
then before the Court.
Because the Bacchus
did not reserve
question
whether its
applied
parties
should be
properly
before it... it is
understood
the normal rule
to have followed
retroactive
in civil cases ... . Because the court in
solely
pass-
Bacchus remanded the case
consideration of the
defense,
through
having
thus should be read as
applied
Vermont,
the rule there
472 U.S.
decided. See also Williams v.
14, 28,
2465, 2474,
(1985);
Corp.
105 S.Ct.
It is cited Davis for Supreme actually Comb principle retroactivity. The Court then went on to add: rule, if it had reversed and just “Bacchus thus its own as ado, Georgia remanded courts yet without further of course 7,1991. argued May At This case was to the Montana Court on argument, parties pending case time of oral both advised this Court of the Beam agreed in that case could the United States Court’s decision dispositive issue this case.
455 Thus, refused to that rule apply respect litigants with to the in this case. question is whether it is error apply to refuse to a rule of federal law announcing already after the case the rule has done so. We is, and stare hold that it decisis principles equality here prevailing Chevron Oil any over claim based on a analysis. extent,
“... To this our decision here possible does limit the applica- of the Chevron Oil tions analysis, however irrelevant Chevron Oil may otherwise be to this rejection case. Because the of modified prospectivity precludes retroactive application of a new rule to some litigants others, when it the Chevron Oil test cannot applied is not determine the choice of law relying equities on the of the particular case. Once retroactive any is chosen for assertedly new rule, is chosen for all others might who seek prospective its application. [W]hen
"... the Corut has applied a rule litigants of law to the case, one it must do so respect to all others not barred procedural requirements judicata.” res [Citations omitted.] Beam,_U.S. at_,_, 2447-48, S.Ct. at 115 L.Ed.2d 493.
The majority concludes that Beam is not applicable to this case Court did not apply Davis retroactively. It was applied retroactively, stipulation based on the of the parties to that However, case. reasoning ignores Justice concurring Scalia’s joined which was in by Justice Marshall and Justice Black- mun to the effect that both prospectivity” “selective “pure prospectivity” beyond are power of the Court. The implication, as far as concerned, those Justices were is that Davis could not have been prospectively if parties even had agreed Beam,_U.S. it retroactively. at_, 2450-51, S.Ct. at (Justice Scalia, L.Ed.2d at 496-97 concurring). majoritys con clusion ignores Justice dissenting O’Connor’s opinion wherein she the Beam states that curtails the Chevron Oil “seriously decision at_ 111 Beam,_U.S. inquiry.” S.Ct. at L.Ed.2d at 499 (Justice O’Connor, dissenting). Finally, majoritys reasoning ig nores after Beam eight days the fact that decided, the United States Supreme granted petitions for certiorari to retired federal employees in South Virginia Carolina and who sought retroac tive application of the Davis decision under circumstances identical to the cases, circumstances in this case. In those Courts of South Carolina and Virginia rendered decisions similar to the *16 250, 395 (1990),302 S.C. case. See Bass v.State majority
of the this 232, 401 241Va. 171;Harper VirginiaDept. v. Taxation S.E.2d of vacated the United States 868. Both of those decisions were S.E.2d Court, courts for “further and both were remanded to the state Distilling Company Georgia.” v. light ofJames B. Beam consideration (1991),_U.S._, L.Ed.2d Bass v.South Carolina (1991),_U.S._, (mem.); Virginia Dept., Taxation Harper of (mem.). 2883, 115L.Ed.2d 1049 111S.Ct. Court to to me that the intent of It does not seem any majority’s opinion clearer. The could be unnecessarily prolongs and merely postpones the inevitable money spend that it can continue to government state delusion of ultimately it have to collected and which will illegally which was repay. simple concerned, the issue involved in this case is
As far as I am money illegally. That fact is petitioners’ The State took the one. private 111.If a citizen language of U.S.C. obvious from give forced to money illegally, he or she would be took someone’s ought The State to do the same. back. allowingthe equity. equitable What is about
The talks about then, State, illegally property seize someone’s power, with all its allowing keep the State to it? illegal, it did being after told what foreseeability regarding the majority’s strained rationale The policy establishes a the State of Montana transparent. Davis is When differently than another taxpayers arbitrarily treating group one situated, certainly that what it is foreseeable similarly that is group doing illegal. the State is purpose effectuate the about how to best majority’s
The conclusion The of the Davis similarly illogical. purpose Davis decision is treated the same employees federal are to assure that decision was furthered possibly purpose How can employees. as state taken from money illegally that was keep allowing the State of citizens who were it for the benefit spend federal similarly taxed? arrived decision a result-oriented majority’s The decision However, the coffers. protecting State’s purpose at for the rights of this Court. responsibility coffers are not State’s are. citizens this state’s little can take above, State ofMontana forth
For the reasons set by this decision. granted reprieve temporary comfort