CHAPTER 13 RETROACTIVITY IN ADMINISTRATIVE LAW

• Jurisdiction: United States

Natural Resources Development and the Administrative State: Navigating Federal Agency Regulation and Litigation
(Feb 2019)
CHAPTER 13
RETROACTIVITY IN ADMINISTRATIVE LAW
Ezekiel J. Williams
Lewis, Bess, Williams & Weese P.C.
Denver, CO

[Page 13-1]

EZEKIEL J. WILLIAMS is a partner with Lewis, Bess, Williams & Weese P.C. in Denver, Colorado and Adjunct Professor of Administrative Law, University of Denver Sturm College of Law, Denver, CO. He specializes in oil and gas, energy, federal lands, and natural resources law and litigation. Zeke advises oil and gas companies on how to obtain, perfect, develop, and defend federal, fee, state, and Indian oil and gas leases in the Rocky Mountain states. He has litigated and arbitrated disputes involving oil and gas leases, federal exploratory units, title issues, operating agreements, accounting procedures, gas gathering and processing dedications, net profits interests, royalty obligations, produced water processing agreements, and exploration and development agreements. Zeke has extensive counseling and litigation experience with the National Environmental Policy Act, Federal Land Policy Management Act, National Forest Management Act, Mineral Leasing Act, Endangered Species Act, National Historic Preservation Act, Clean Water Act, Administrative Procedure Act, and other laws. Zeke advises oil and gas companies, midstream companies, renewable energy developers, ski areas, trade associations, and others on how to participate strategically in the preparation of NEPA documents, federal land use plans, and environmental permits that will govern their future actions. Zeke teaches Administrative Law, Environmental Law, and Natural Resources Law as an adjunct professor at the University of Denver College of Law, is a former Trustee of the Rocky Mountain Mineral Law Foundation, and frequently speaks and writes on energy and natural resources issues. He graduated with honors in 1994 from the University of Denver College of Law where he was the Articles Editor of the Law Review, and has an undergraduate degree from Montana State University. After law school, Zeke worked as a judicial law clerk for the Honorable Bobby R. Baldock of the United States Court of Appeals for the Tenth Circuit.

I. Introduction

II. Federal Law of Retroactivity

A. Definition of Retroactivity

B. The United States Constitution and Retroactivity

C. Presumption Against Legislative Retroactivity

D. Legislative Retroactivity

E. Retroactivity in Judicial Adjudications

III. Federal Administrative Law of Retroactivity

A. Agency Action: Rulemaking and Adjudication

B. Retroactivity in Rulemakings

C. Retroactivity in Adjudications

IV. Federal Natural Resources Law and Retroactivity

V. Conclusion

* * *

I. Introduction

That the law does not favor retroactivity is a familiar maxim.¹ Legislation and judicial decisions produce retroactive effect when they change the legal consequences of past conduct. The extent to which American law permits legislation and judicial decisions to operate retroactively demonstrates that the antiretroactivity presumption is modest. The United States Constitution prohibits certain retroactive actions - e.g., the retroactive application of penal

[Page 13-2]

legislation, the retroactive enactment by states of laws "impairing the Obligation of Contracts," and the taking of private property rights except for a "public use" and upon payment of "just compensation."² Apart from a few limited provisions, the Constitution does not broadly prohibit retroactive action by Congress or the judiciary.

Legislation is typically prospective, announcing what the law will be for the future, as opposed to determining what the law was in the past.³ Yet Congress may pass retroactive legislation and apply new law to past events if it makes its intent clear.⁴

Federal court decisions are exercises in retroactivity. There is no general bar on a judicial decision producing a retroactive result. "Every case of first impression has a retroactive effect."⁵ Retroactivity is often the point of litigation.⁶ That is, a court resolves cases and controversies by announcing what the law was for specific facts discovered and presented by the litigants.⁷ Federal courts do not issue advisory opinions about the legal consequences of future facts or events.⁸

The modest presumption against, and qualified allowance for, retroactivity finds unique application in administrative law. That result derives from the hybrid nature of an administrative agency. A single executive branch administrative agency shares attributes of all three branches of government, yet the agency defies attempts to categorize it wholly as a single constitutional species. The United States Bureau of Land Management ("BLM"), for example, "looks" like a legislative body when, pursuant to Congressionally-delegated legislative authority under the Mineral Leasing Act of 1920, it engages in rulemaking and writes regulations about federal oil and gas leases that carry the force and effect of law. The BLM acts in an executive capacity when it enforces the regulations against regulated entities that hold federal oil and gas leases. And the BLM resolves disputes in a judicial-appearing manner when it decides (adjudicates) administrative appeals brought by the same lease holders. Nearly all executive branch administrative agencies share these attributes.

This paper explores how administrative law expresses the presumption against retroactive legislation, and the presumption in favor of retroactive adjudications, in particular in the field of federal natural resources law. Part II summarizes the general retroactivity principles

[Page 13-3]

of federal law. Part III identifies federal administrative law on retroactivity. Part IV addresses the treatment of retroactivity in certain federal natural resources laws.

II. Federal Law of Retroactivity

A. Definition of Retroactivity

Determining when government action, for example legislation, has retroactive effect is not as simple as it appears. Of course, no retroactivity issue arises when a law adopted by a legislative body is applied in a "purely prospective" manner to actions and events arising after enactment of the legislation.⁹ Applying new laws in a prospective manner to future events is hardly retroactive.

Justice Story provided an often-cited retroactivity definition two centuries ago in a decision addressing a provision of the New Hampshire state constitution:

every statute, which takes away or impairs vested rights acquired under existing laws, or creates a new disability in respect to transactions or considerations already past, must be deemed retrospective .... ¹⁰

The Supreme Court expanded upon Justice Story's definition in its 1994 opinion in Landgraf v. USI Film Products. The Court observed that a "statute does not operate 'retrospectively'" - retroactively - "because it is applied in a case arising from conduct antedating the statute's enactment."¹¹ The Court explained that the retroactivity inquiry "must ask whether the new provision attaches legal consequences to events completed before its enactment," a "process of judgment concerning the nature and extent of the change in the law and the degree of connection between the operation of the new rule and a relevant past event."¹² The key is whether the new legislation or judicial decision changes the legal consequences of past conduct or action, for instance imposing a financial liability under new law that did not previously exist when the conduct occurred, or forbidding or sanctioning an action that was legal when taken. It is difficult to improve upon a concise definition offered by Professor Jan Laitos: "[i]f the new law attaches new legal consequences to events completed before its enactment, it operates retroactively."¹³

[Page 13-4]

B. The United States Constitution and Retroactivity

The Constitution prohibits specific retroactive actions, but does not contain a broad prohibition on retroactive legislation, judicial decision-making, or executive action. The antiretroactivity principle appears in specific constitutional provisions, including:

the prohibition on retroactive application of penal legislation, ¹⁴

the prohibition on retroactive enactment by states of laws "impairing the Obligation of Contracts," ¹⁵

the prohibition on the taking of private property except for a "public use" and upon payment of "just compensation," ¹⁶ and

the prohibition on "Bills of Attainder" that punish individual disfavored persons for past actions. ¹⁷

In the absence of a violation of a specific antiretroactivity provision, the Constitution does not forbid retroactive legislation, judicial decisions, or executive action.¹⁸

C. Presumption Against Legislative Retroactivity

One may argue that a presumption against retroactivity is consistent with notions of notice and fairness. The presumption has a long history, at least in connection with legislation. "'It is a principle of the English common law, as ancient as the law itself, that a statute, even of its omnipotent parliament, is not to have a retrospective effect.'"¹⁹ The Supreme Court observed that "individuals should have an opportunity to know what the laws is and to conform their conduct accordingly; settled expectations should not be lightly disrupted."²⁰ The maxim that conduct should be analyzed under the law in effect at the time the conduct took place furthers principles of notice and fairness.

Yet, as the balance of this paper demonstrates, the antiretroactivity principle is modest and qualified because federal law allows for, under the proper circumstances, retroactive legislation, judicial decisions, administrative rulemaking, and administrative adjudications.

[Page 13-5]

D. Legislative Retroactivity

The Supreme Court's Landgraf decision provides that Congress may enact legislation with retroactive effect if (1) the legislation does not offend a specific constitutional provision...