Cash v. Califano, 79-1279

• Decision Date: 19 May 1980
• Docket Number: No. 79-1279,79-1279
• Citation: 621 F.2d 626
• Parties: Francis A. CASH, Appellee, v. Joseph A. CALIFANO, Jr., Secretary of Health, Education & Welfare, Appellant, J. B. Hutton, Jr., Amicus Curiae.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 626

621 F.2d 626

Francis A. CASH, Appellee, v. Joseph A. CALIFANO, Jr., Secretary of Health, Education &amp Welfare, Appellant J. B. Hutton, Jr., Amicus Curiae.

No. 79-1279.

United States Court of Appeals Fourth Circuit.

Argued Feb. 6, 1980.

Decided May 19, 1980.

A. George Lowe, Dept. of Health, Education & Welfare, Baltimore, Md. (Barbara Allen Babcock, Asst. Atty. Gen., Washington, D. C., Paul R. Thomson, Jr., U. S. Atty., Morgan E. Scott, Jr., Asst. U. S. Atty., Roanoke, Va., Randolph W. Gaines, Chief of Litigation, Dept. of Health, Education & Welfare, Baltimore, Md., Edith R. Perez, Third Year Law Student, on brief), for appellant.

Francis A. Cash, pro se.

Before HAYNSWORTH, Chief Judge, MURNAGHAN, Circuit Judge, and HAWKINS ^*, District Judge.

HAYNSWORTH, Chief Judge:

The central question presented on this appeal is whether the rule of Califano v. Goldfarb, 430 U.S. 199, 97 S.Ct. 1021, 51 L.Ed.2d 270 (1977) should be applied to a case which was pending before the Secretary of HEW at the time Goldfarb was decided. The Secretary contends that Goldfarb should be applied prospectively only. Furthermore, the Secretary argues that should Goldfarb be applied to this case, any award of past-due benefits would violate the sovereign immunity of the United States. The district court rejected both of these contentions and awarded past-due benefits to the claimant. We affirm.

I.

Francis Cash applied for widower's insurance benefits on October 21, 1976. Initially his claim was denied since his own social security retirement account would provide him with greater monthly benefits. Cash immediately sought limited review of that denial for the period between December 1975 and July 1976, months during which he had not been eligible for retirement benefits. This claim was denied on the basis that Cash had failed to establish dependency upon his deceased spouse as required by 42 U.S.C.A. § 402(f)(1)(D)(i) (1974). No such showing of dependency was required for similarly situated widows. See id.. § 402(e). Cash lodged an administrative appeal solely on the dependency question.

During the pendency of Cash's claim before the Social Security Administration, the Supreme Court struck down the dependency requirement for widowers as violative of the equal protection concept embodied in the Fifth Amendment. Califano v. Goldfarb, supra. Nevertheless, the Administrative Law Judge who considered Cash's appeal, refused to apply Goldfarb since the Supreme Court had not specifically ruled that Goldfarb was to be applied retroactively. The Secretary adopted the ALJ's conclusion that Cash was not entitled to benefits. Cash brought suit in district court, 42 U.S.C.A. § 405(g), and the district court, applying Goldfarb, reversed the Secretary and awarded benefits for the period in question. This appeal followed.

II.

A general rule in Anglo-American jurisprudence is that judicial decisions are to be applied retroactively. Generally speaking, this is necessarily so for the parties before the court. It is implicitly so for all other potential litigants. The concept stems from the Blackstonian view, that judges do not make law; they find law. Judicial declaration of law is merely a statement of what the law has always been. "For if it be found that the former decision is manifestly absurd or unjust, it is declared, not that such a sentence was bad law, but that it was not law." 1 Blackstone, Commentaries on the Law of England 70 (1765). A corollary of this proposition is the rule that a court will apply judicial case law as that law exists at the time of decision. These rules are in contrast with the precept that legislation operates prospectively only. Thus it has been argued that to the extent a court applies nonretroactivity to a decision or legal interpretation, that court has undertaken a legislative function. See, e. g., Mishkin, The Supreme Court, 1964 Term, Forward: The High Court, The Great Writ, and the Due Process of Time and Law, 79 Harv.L.Rev. 56, 58-72 (1965).

However, even these rudiments of common law must be applied with some flexibility. ¹ The lay perception is that courts do change law. Moreover, cases do arise in which equitable considerations outweigh subservience to traditional notions of the judicial function. When parties have substantially relied upon prior legal interpretations, it may be manifestly unjust to apply the current interpretation retroactively even if that interpretation does represent the "correct" statement of law. This was the equitable consideration behind the "all deliberate speed" mandate of Brown v. Board of Education, 349 U.S. 294, 300, 75 S.Ct. 753, 99 L.Ed. 1083 (1955). Under a strict Blackstonian view, the order to desegregate would have taken immediate effect notwithstanding the states' reliance on the erroneous rule enunciated in Plessy v. Ferguson, 163 U.S. 537, 16 S.Ct. 1138, 41 L.Ed. 256 (1896). See J.A.C. Grant, The Legal Effect of a Ruling that a Statute is Unconstitutional, 1978 Det.C.L.Rev. 201, 238. Confronted with such a situation, the court does not legislate. It merely molds a remedy to avoid a clearly unjust or untenable result. The court dons the hat of equity. With respect to the general rule, this court has previously explained:

It has in it much literal truth in the context of all but a few exceptional cases when the courts are about their usual business of settling controversies in terms of the law as it is declared at the moment of decision. It is not a shackle, however. In the exceptional case it does not compel a court confronted with earlier misreadings of a statute to choose between perpetuation of the error and casting inequitable burdens upon litigants who had acted in justifiable reliance upon the earlier reading.

Lester v. McFaddon, 415 F.2d 1101, 1107 (4th Cir. 1969) (footnotes omitted). Of course, the party seeking to have a court adopt a rule of nonretroactivity in a particular case, does have the burden of presenting the necessary equitable predicate. The Secretary bears that burden.

III.

In Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971), the Supreme Court presented an analytical framework to be used in determining whether a decision should not be afforded the normal retroactive application:

In our cases dealing with the nonretroactivity question, we have generally considered three separate factors. 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, for "(w)here a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the 'injustice or hardship' by a holding of nonretroactivity."

Id. at 106-7, 92 S.Ct. at 355 (citations omitted). The application of these factors is not accomplished through a discrete reference to each separate factor, but by an analysis of how they interact with one another. For example, the final factor of "inequitable result" is closely tied to the initial reliance factor. Absent some surprise engendered by a current judicial interpretation, a litigant cannot be heard to demand nonretroactivity on the basis of inequity. Similarly, a finding under the second factor that retroactive application would not advance the policy of a recently discovered law will not in itself preclude retroactivity, unless application of the rule would produce an inequitable result. Naturally, our analysis must proceed one step at a time. However, the final determination involves pulling together the three factors for a careful balancing. Indeed, even a step by step analysis suggests the close interrelationship of the factors.

The cases in which the Supreme Court has adopted nonretroactivity have all included a reliance factor. Some of these cases have involved unexpected interpretations of procedural law, the retroactive application of which would have clearly prejudiced an unwary litigant by erecting, directly or indirectly, an absolute bar to his claim. Chevron Oil Co. v. Huson, supra; England v. Louisiana State Board of Medical Examiners, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964); see also Lester v. McFaddon, supra. Other cases have involved substantive interpretations of law which would have altered significantly pre-existing patterns of behavior, and concomitant vested rights, which had been premised upon reasonable interpretations of legal precedent. Lemon v. Kurtzman, 411 U.S. 192, 93 S.Ct. 1463, 36 L.Ed.2d 151 (1973); City of Phoenix v. Kolodziejski, 399 U.S. 204, 90 S.Ct. 1990, 26 L.Ed.2d 523 (1970); Cipriano v. City of Houma, 395 U.S. 701, 89 S.Ct. 1897, 23 L.Ed.2d 647 (1969); Allen v. State Board of Elections, 393 U.S. 544, 89 S.Ct. 817, 22 L.Ed.2d 1 (1969); Simpson v. Union Oil Co., 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98 (1964). Even in the criminal procedure area, adoption of nonretroactivity is premised upon the state's or the locality's good faith belief that procedures now deemed unconstitutional at the time of enforcement had met constitutional norms. See Linkletter v. Walker, 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965).

The Secretary argues that Califano v. Goldfarb "was not clearly foreshadowed" by legal precedent, and that the Secretary could justifiably presume the legality of the dependency requirement in § 402(f). In presenting this argument, the Secretary emphasizes that the law of sexual discrimination is in a state of evolution and that the Goldfarb d...