501 U.S. 529 (1991), 89-680, James M. Beam Distilling Company v. Georgia
|Docket Nº:||No. 89-680|
|Citation:||501 U.S. 529, 111 S.Ct. 2439, 115 L.Ed.2d 481, 59 U.S.L.W. 4735|
|Party Name:||James M. Beam Distilling Company v. Georgia|
|Case Date:||June 20, 1991|
|Court:||United States Supreme Court|
Argued Oct. 30, 1990
CERTIORARI TO THE SUPREME COURT OF GEORGIA
Before 1985, Georgia law imposed an excise tax on imported liquor at a rate double [111 S.Ct. 2440] that imposed on liquor manufactured from Georgia-grown products. In 1984, this Court, in Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, held that a similar Hawaii law violated the Commerce Clause. Petitioner, a manufacturer of Kentucky Bourbon, thereafter filed an action in Georgia state court, seeking a refund of taxes it paid under Georgia's law for 1982, 1983, and 1984. The court declared the statute unconstitutional, but refused to apply its ruling retroactively, relying on Chevron Oil Co. v. Huson, 404 U.S. 97, which held that a decision will be applied prospectively where it displaces a principle of law on which reliance may reasonably have been placed, and where prospectivity is, on balance, warranted by its effect on the operation of the new rule and by the inequities that might otherwise result from retroactive application. The State Supreme Court affirmed.
Held: The judgment is reversed, and the case is remanded.
JUSTICE SOUTER, joined by JUSTICE STEVENS, concluded that, once this Court has applied a rule of law to the litigants in one case, it must do so with respect to all others not barred by procedural requirements or res judicata. Pp. 534-544.
(a) Whether a new rule should apply retroactively is in the first instance a matter of choice of law, to which question there are three possible answers. The first and normal practice is to make a decision fully retroactive. Second, there is the purely prospective method of overruling, where the particular case is decided under the old law but announces the new, effective with respect to all conduct occurring after the date of that decision. Finally, the new rule could be applied in the case in which it is pronounced, but then return to the old one with respect to all others arising on facts predating the pronouncement. The possibility of such modified, or selective, prospectivity was abandoned in the criminal context in Griffith v. Kentucky, 479 U.S. 314. Pp. 534-538.
(b) Because Bacchus did not reserve the question, and remanded the case for consideration of remedial issues, it is properly understood to have followed the normal practice of applying its rule retroactively to the litigants there before the Court. Pp. 540.
(c) Because Bacchus thus applied its own rule, principles of equality and stare decisis require that it be applied to the litigants in this case. Griffith's equality principle, that similarly situated litigants should be treated the same, applies equally well in the civil context as in the criminal. Of course, retroactivity is limited by the need for finality, since equality for those whose claims have been adjudicated could only be purchased at the expense of the principle that there be an end of litigation. I n contrast, parties, such as petitioner, who wait to litigate until after others have labored to create a new rule, are merely asserting a right that is theirs in law, is not being applied on a prospective basis only, and is not otherwise barred by state procedural requirements. Modified prospectivity rejected, a new rule may not be retroactively applied to some litigants when it is not applied to others. This necessarily limits the application of the Chevron Oil test, to the effect that it may not distinguish between litigants for choice-of-law purposes on the particular equities of their claims to prospectivity. It is the nature of precedent that the substantive law will not shift and spring on such a basis. Pp. 540-544.
(d) This opinion does not speculate as to the bounds or propriety of pure prospectivity. Nor does it determine the appropriate remedy in this case, since remedial issues were neither considered below nor argued to this Court. P. 544.
[111 S.Ct. 2441] JUSTICE WHITE concluded that, under any one of several suppositions, the opinion in Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, may reasonably read to extend the benefits of the judgment in that case to Bacchus Imports, and that petitioner here should also have the benefit of Bacchus. If the Court in Bacchus thought that its decision was not a new rule, there would be no doubt that it would be retroactive to all similarly situated litigants. The Court in that case may also have thought that retroactivity was proper under the factors set forth in Chevron Oil Co. v. Huson, 404 U.S. 97. And even if the Court was wrong in applying Bacchus retroactively, there is no precedent in civil cases for applying a new rule to the parties of the case, but not to others. Moreover, Griffith v. Kentucky, 479 U.S. 314, 328, has overruled such a practice in criminal cases, and should be followed on the basis of stare decisis. However, the propriety of pure prospectivity is settled in this Court's prior cases, see, e.g., Cipriano v. City of Houma, 395 U.S. 701, 706, which recognize that, in proper cases, a new rule announced by the Court will not be applied retroactively, even to the parties before the Court. To allow for the possibility of speculation as to the propriety of such prospectivity is to suggest that there may come a time when this Court's precedents on the issue will be overturned. Pp. 544-547.
JUSTICE BLACKMUN, joined by JUSTICE MARSHALL and JUSTICE SCALIA, concluded that prospectivity, whether "selective" or "pure," breaches the Court's obligation to discharge its constitutional function in articulating new rules for decision, which must comport with its duty to decide only cases and controversies. Griffith v. Kentucky, 479 U.S. 314. The nature of judicial review constrains the Court to require retroactive application of each new rule announced. Pp. 547-548.
JUSTICE SCALIA, joined by JUSTICE MARSHALL and JUSTICE BLACKMUN, while agreeing with JUSTICE SOUTER's conclusion, disagreed that the issue is one of choice of law, and concluded that both selective and pure prospectivity are impermissible, not for reasons of equity, but because they are not permitted by the Constitution. To allow the Judiciary powers greater than those conferred by the Constitution, as the fundamental nature of those powers was understood when the Constitution was enacted, would upset the division of federal powers central to the constitutional scheme. Pp. 548-549.
SOUTER, J., announced the judgment of the Court, and delivered an opinion, in which STEVENS, J., joined. WHITE, J., filed an opinion concurring in the judgment, post, p. 544. BLACKMUN, J., filed an opinion concurring in the judgment, in which MARSHALL and SCALIA, JJ., joined, post, p. 547. SCALIA, J., filed an opinion concurring in the judgment, in which MARSHALL and BLACKMUN, JJ., joined, post, p. 548. O'CONNOR, J., filed a dissenting opinion, in which REHNQUIST, C.J., and KENNEDY, J., joined, post, p. 548.
SOUTER, J., lead opinion
JUSTICE SOUTER announced the judgment of the Court, and delivered an opinion in which JUSTICE STEVENS joins.
The question presented is whether our ruling in Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 (1984), should apply retroactively to claims arising on facts antedating that decision. We hold that application of the rule in that case requires its application retroactively in later cases.
Prior to its amendment in 1985, Georgia state law imposed an excise tax on imported alcohol and distilled spirits at a rate double that imposed on alcohol and distilled spirits manufactured from Georgia-grown products. See Ga.Code Ann. § 3-4-60 (1982). In 1984, a Hawaii statute that similarly distinguished between imported and local alcoholic products was held in Bacchus to violate the Commerce Clause. Bacchus, supra, at 273. It proved no bar to our finding of unconstitutionality that the discriminatory tax involved intoxicating liquors, with respect to which the States have heightened
regulatory powers under the Twenty-first Amendment. Id. at 276.
In Bacchus ' wake, petitioner, a Delaware corporation and Kentucky bourbon manufacturer, claimed Georgia's law likewise inconsistent with the Commerce Clause, and sought a refund of $2.4 million, representing not only the differential taxation but the full amount it had paid under § 3-4-60 for the years 1982, 1983, and 1984. Georgia's Department of Revenue failed to respond to the request, and Beam thereafter brought a refund action against the State in the Superior Court of Fulton County. On cross-motions for summary judgment, the trial court agreed that § 3-4-60 could not withstand a Bacchus attack for the years in question, and that the tax had therefore been unconstitutional. Using the analysis described in this Court's decision in Chevron Oil Co. v. Huson, 404 U.S. 97 (1971), the court nonetheless refused to apply its ruling retroactively. It therefore denied petitioner's refund request.
The Supreme Court of Georgia affirmed the trial court in both respects. The court held the pre-1985 version of the statute to have violated the Commerce Clause as, in its words, an act of "simple economic protectionism." See 259 Ga. 363, 364, 382 S.E.2d 95, 96 (1989) (citing Bacchus). But it, too, applied that finding on a prospective basis only, in the sense that it declined to declare the State's application of the statute unconstitutional for the years in question. The court concluded that, but for Bacchus, its decision on the constitutional question would have established a new rule of law by overruling past precedent, see...
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