RETROACTIVITY AND RESTRAINT: AN ANGLO-AMERICAN COMPARISON.

• Author: Hammer, Stephen J.

INTRODUCTION

In American law, the mandatory retroactivity of common law decisionmaking is an unfashionable idea. Under the traditional understanding, said by Justice Oliver Wendell Holmes to have prevailed "for near a thousand years," (1) a judicial decision must be treated as stating what the law was, as well as what it is. In the modern era, this concept strikes many judges as absurd mythmaking--or, as California Supreme Court Chief Justice Roger Traynor called it, "moonspinning." (2) Chief Justice Traynor believed that mandatory retroactivity was an artifact of the now-discredited declaratory theory of the common law: "For all too many generations we justified mechanical retroactivity by the prim lore descended to us through Blackstone that judges do no more than discover the law that marvelously has always existed, awaiting only the judicial pen that would find the right words for all to heed." (3)

Chief Justice Traynor was, of course, not wrong to connect the origins of mandatory retroactivity with the Blackstonian theory of law. In the eighteenth century, William Blackstone had famously declared judges to be "the living oracles" of the common law. (4) In his classical formulation, a judge was "sworn to determine, not according to his own private judgment, but according to the known laws and customs of the land; not delegated to pronounce a new law, but to maintain and expound an old one." (5) And when former decisions were found wanting? "It is declared, not that such sentence was bad law, but that it was not law...." (6)

If the declaratory theory of the common law was ever truly believed in, it is no longer. (7) In the exercise of their common law powers, judges are recognized to be making the law, not finding it. (8) After the general dawning of this realization, it was only natural that the mandatory retroactivity of judicial decisionmaking would come into doubt. With the rise of Legal Realism, which questioned the internal coherence of the law more broadly, (9) jurists began to view common law judging as flatly analogous to the work of a legislature. (10) Legislatures could decide whether new rules would operate retroactively or prospectively, based on pragmatic concerns to be weighed by the lawmakers. (11) If judges were going to strip off the old Blackstonian mythology, it followed that they should embrace the set of tools that comported realistically with their position. (12) This tool set came to consist of three techniques: traditional retroactive decisionmaking, purely prospective decisionmaking, and selectively prospective decisionmaking. A purely prospective decision would apply the new rule only to cases arising from events after the decision, and not to the case at hand. (13) A selectively prospective decision would apply the new rule to the case before the court and future cases, but not to any other cases arising from events before the decision. (14) Prospectivity would make the judicial craft more flexible by allowing judges to overrule old laws that had generated substantial reliance interests, such as in property, contract, and tax cases, without upsetting those expectations. (15)

In light of the abandonment of the declaratory theory, these innovations were widely viewed as prudent and realistic. (16) Over time, however, prospective decisionmaking fell into disfavor at the federal level. In the 1993 case of Harper v. Virginia Department of Taxation, (17) the Supreme Court prohibited the use of selective prospectivity by courts adjudicating federal law as announced and applied by the Court. (18) The Court found that the prospective application of new rules of law was contrary to the judicial function and inherently inequitable. (19) Yet the decision did not extend to state courts' interpretations of state law, (20) and state courts have mostly continued their use of prospective decisionmaking since then. (21) Because state courts, unlike federal courts, are uniquely charged with developing the common law, (22) and because the common law is now universally acknowledged to be judge-made, few state courts in the aftermath of Harper seriously questioned their use of prospectivity. (23) How, for a modern common law court, could it be otherwise?

For our closest common law ancestor, it is otherwise. An English court has never decided a case prospectively. (24) This difference is arresting, because the English and American legal systems share deep similarities. English and American courts both decide common law cases. English judges, like their American counterparts, reject the declaratory theory. (25) Like American courts, English courts actively, knowingly, and sometimes drastically change the common law. (26) Yet English legal culture has resisted the idea that judges can both change the law and decide when that change will come into effect. (27) In 1999, Lord Goff of the House of Lords stated that prospective overruling "has no place in our legal system," because it necessarily entails the unequal application of the law. (28) In the 2005 case of In re Spectrum Plus Ltd., (29) the House of Lords declared for the first time that a new rule could be applied prospectively, but only in "a wholly exceptional case"--which the matter before it was not. (30) Since then, no English court has found it appropriate to decide a case prospectively. (31)

Thus, the English approach to mandatory retroactivity differs sharply from that of American state supreme courts, even though both are similarly situated as expositors of the common law. But the English perspective closely tracks the two rationales offered by the Supreme Court in Harper for mandating the retroactive application of federal law--the nature of the judicial function and the need to ensure the equitable treatment of litigants. The practice of English courts demonstrates that state courts can embrace Harper's reasoning and significantly limit their use of prospectivity without abandoning their responsibility for developing the common law or indulging in Blackstonian "moonspinning."

1. PROSPECTIVE DECISIONMAKING IN AMERICA

   1. Federal Law

      The history of prospective decisionmaking at the federal level traces a distinctive arc: the practice found acceptance in the 1930s, escalated in the 1960s, fell into disfavor in the 1980s, and was strictly curtailed in the 1990s. Although courts very occasionally accepted or used prospective decisionmaking in the nineteenth century, (32) the common use of prospectivity in America only began in the early twentieth century. In the 1932 case of Great Northern Railway Co. v. Sunburst Oil & Refining Co., (33) the Supreme Court held that the federal Constitution does not prohibit prospective decisionmaking by state courts. (34) Earlier that year, the Montana Supreme Court ruled that a previous case regarding railway tariffs was wrongly decided. (35) Nevertheless, the court held that the previous rule was good law for all those who had acted on it before the 1932 decision. (36) Going forward, it would no longer be law. (37) In short, the Montana Supreme Court overruled itself purely prospectively.

      The U.S. Supreme Court affirmed. The Court, per Justice Cardozo, held that "the federal constitution has no voice" on prospectivity, and that states have the option to decide cases prospectively or retroactively. (38) The Court found that the Due Process Clause of the Fourteenth Amendment does not force a particular "juristic philosophy" (39) of the common law on the states; (40) they may choose for themselves "between the principle of forward operation and that of backward relation." (41) Thus prospective decisionmaking--which came to be known as "sunbursting" (42)--received the imprimatur of the Supreme Court.

      Karl Llewellyn, an advocate of prospectivity as a tool of judicial craftsmanship, (43) later stated that "I do not think many opinions gave [Cardozo] greater pleasure" than Sunburst Oil. (44) Prospectivity had long been a subject of interest to Justice Cardozo. He has been described as a "pragmatic conceptualist," who, in contrast to the Realists, thought that the law consists of meaningful concepts, (45) yet also believed that judges should adapt those concepts to changing circumstances. (46) In his 1921 lectures compiled as The Nature of the Judicial Process, Cardozo had approvingly noted the use of prospectivity in cases where retroactivity would cause great hardship. (47) He suggested that the use of prospective decisionmaking in the future should be governed not by "metaphysical conceptions of the nature of the judge-made law, nor by the fetich [sic] of some implacable tenet, such as that of the division of governmental powers, but by considerations of convenience, of utility, and of the deepest sentiments of justice." (48) Just before his confirmation to the Supreme Court, then-Judge Cardozo advocated even more strongly for the use of prospectivity. In a 1932 address to the New York State Bar Association, Cardozo stated that he saw prospective decisionmaking as a prudent solution in cases where retroactivity would be "for any reason inexpedient." (49) Prospectivity appealed to Justice Cardozo's pragmatism while not violating his sense of the necessary stability and predictability of the law, (50) and under his opinion in Sunburst Oil, its use became widespread in America.

      The Supreme Court began developing its own doctrine of prospectivity in the 1965 case of Linkletter v. Walker. (51) In 1959, Linkletter was convicted of burglary based on evidence obtained from his home and business by the police. (52) A 1961 Supreme Court case, Mapp v. Ohio, (53) found for the first time that the Due Process Clause of the Fourteenth Amendment requires states to exclude evidence seized in violation of the Fourth Amendment. (54) After Mapp, Linkletter sought a writ of habeas corpus in federal court to challenge his burglary conviction as based on unconstitutionally-obtained evidence. (55) The Court held that Mapp...