Luddington v. Indiana Bell Telephone Co.

• Citation: 966 F.2d 225
• Decision Date: 04 September 1992
• Docket Number: No. 91-2320,91-2320
• Parties: 59 Fair Empl.Prac.Cas. (BNA) 18, 59 Empl. Prac. Dec. P 41,533, 61 USLW 2007 George J. LUDDINGTON, Plaintiff-Appellant, v. INDIANA BELL TELEPHONE COMPANY, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 225

966 F.2d 225

59 Fair Empl.Prac.Cas. (BNA) 18, 59 Empl.

Prac. Dec. P 41,533,

61 USLW 2007

George J. LUDDINGTON, Plaintiff-Appellant, v. INDIANA BELL TELEPHONE COMPANY, Defendant-Appellee.

No. 91-2320.

United States Court of Appeals Seventh Circuit.

Argued April 6, 1992.

Decided June 15, 1992.

Rehearing and Rehearing En Banc

Denied Sept. 4, 1992.

John O. Moss (argued), Moss & Walton, Indianapolis, Ind., for plaintiff-appellant.

Gregory J. Utken (argued), Baker & Daniels, Indianapolis, Ind., for defendant-appellee.

Robert E. Williams, Douglas S. McDowell, Heidi K. McAuliffe, McGuiness & Williams, Washington, D.C., for amicus curiae Equal Employment Advisory Council.

Before POSNER and KANNE, Circuit Judges, and BURNS, Senior District Judge. ^*

POSNER, Circuit Judge.

George Luddington has been employed by Indiana Bell since 1966. In 1979 he moved out of the worker ranks and into a bottom-rung management position, where he has been stuck ever since. Between 1982 and 1984 he applied for at least 35 other positions--most higher, some not--with the company. Turned down every time, in 1986 he filed this suit, which charges that every turndown precipitated four distinct statutory violations, for a total of 140, because every one was both an act of racial discrimination and an act of retaliation for complaining about discrimination and each act violated both Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., which forbids racial discrimination in employment, and 42 U.S.C. § 1981, which entitles every person to the contractual rights of white persons. The district judge granted summary judgment for the company. While the appeal was awaiting argument, Congress enacted the Civil Rights Act of 1991, P.L. 102-166, which amended both statutes; and at our request the parties have briefed the significance of that enactment to the appeal. Some weeks ago another panel of this court, in agreement with the only other courts of appeals to have decided it, Vogel v. City of Cincinnati, 959 F.2d 594, 597-98 (6th Cir.1992); Fray v. Omaha World Herald Co., 960 F.2d 1370 (8th Cir.1992), held that the Act is not to be applied retroactively. Mozee v. American Commercial Marine Service Co., 963 F.2d 929 (7th Cir.1992). In view of the importance of the question, we shall discuss it as if it were an open question in this circuit, rather than, as we would ordinarily do, dispose of it with a citation to our recent decision. But we can be brief.

Patterson v. McLean Credit Union, 491 U.S. 164, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), had interpreted the then section 1981 to exclude claims based on a refusal to promote or transfer an employee, unless the promotion or transfer could be said to create a new employment relation. The decision, applied as decisions normally (perhaps, after James B. Beam Distilling Co. v. Georgia, --- U.S. ----, 111 S.Ct. 2439, 115 L.Ed.2d 481 (1991), always) are to pending as well as to new cases, wiped out many of Luddington's claims. The new civil rights act makes section 1981 expressly applicable to all racial discrimination in a contractual relation. 42 U.S.C. § 1981(b). If, as Luddington argues, the new act is retroactive, then some of the charges dismissed by the district judge must be reinstated. Of course, there is retroactivity and there is retroactivity. A statute could be applied (1) to cases filed and completed before the effective date of the statute that arise from acts committed before that effective date, (2) to cases filed before the effective date of the statute, but not completed by that date, that arise from acts committed before that date, (3) to cases filed after the effective date that arise from acts committed before that date, (4) to cases in any of these categories but in which the conduct complained of straddles the effective date of the statute, or (5) only to cases filed after the effective date that arise from acts committed entirely after that date. The first four types of application would be retroactive to varying degrees; the fifth wouldn't be retroactive at all. Luddington's case is in cell (2) (Mozee likewise). It was filed, but not completed, before the effective date of the statute and it arises from conduct also committed before that date.

The new act provides, so far as bears on this case, that the amendments made by it "shall take effect upon enactment." This could mean no more than that employers were given no grace period in which to bring their practices into compliance with the requirements of the act; they must begin to comply, on pain of sanctions if they fail, on the day the act was passed. So interpreted the statute would be prospective. Or the language that we have quoted could mean that the requirements of the act apply to every undecided case--or perhaps to decided cases as well, which losing litigants could reopen to take advantage of the new act. The floor debates on the 1991 act reveal, as one would expect, divergent views on these questions. It seems futile to search for a legislative intent, bearing in mind that the President is by virtue of the veto power a key participant in the legislative process. President Bush would probably have vetoed a statute that contained an express provision for retroactivity--he had done so the previous session and his veto had not been overridden--but the Democratic majority in both houses would equally have "vetoed" an express provision for prospective application. As so often happens, the contenders could not agree, so they dumped the question into the judiciary's lap without guidance.

This politically convenient solution was facilitated by the fact that the courts do not have a consistent rule for deciding whether a statute shall be given retroactive, or merely prospective, effect when the statute does not say. Either of the contending factions in Congress could thus hope that statutory silence would work in its favor. In some cases, notably Bradley v. School Board of City of Richmond, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974), the Supreme Court had announced a presumption that statutes are to be applied retroactively, at least in the sense of being applied to cases pending on the statute's effective date. In other cases it had said the opposite. Justice Scalia examined the two lines of cases in Kaiser Aluminum & Chemical Corp. v. Bonjorno, 494 U.S. 827, 841, 110 S.Ct. 1570, 1579, 108 L.Ed.2d 842 (1990) (concurring opinion), and pronounced them "in irreconcilable contradiction." We agree. We too have straddled this divide. Littlefield v. McGuffey, 954 F.2d 1337, 1345 (7th Cir.1992); Orrego v. 833 West Buena Joint Venture, 943 F.2d 730 (7th Cir.1991); FDIC v. Wright, 942 F.2d 1089, 1095 and n. 6 (7th Cir.1991); McKnight v. General Motors Corp., 908 F.2d 104, 110-11 (7th Cir.1990).

The idea that the law should confine its prohibitions and regulations to future conduct so that the persons subject to the law can conform their conduct to it and thus avoid being punished, whether criminally or civilly, for conduct that they had no reason to think unlawful, is a component of the traditional conception of the "rule of law." Except as codified in constitutional provisions (retroactive imposition of criminal penalties, for example, is forbidden by the ex post facto clause of the Constitution), the traditional conception is neither immutable nor absolute. But we think that conformity to it is the right policy for courts to follow in default of other guidance.

That brings us part of the way to resolution of the question whether the recent civil rights act should be applied prospectively only, but not all the way, because we are speaking only of a presumption against retroactive application. Procedural innovations not likely to bias decision systematically in favor of one litigant rather than his opponent can, without serious affront to the values crystallized in the phrase "rule of law," be applied to cases pending when the innovations were adopted; and that is the norm even in criminal cases. Dobbert v. Florida, 432 U.S. 282, 97 S.Ct. 2290, 53 L.Ed.2d 344 (1977); Prater v. United States Parole Comm'n, 802 F.2d 948, 953 (7th Cir.1986) (en banc). In civil cases, the presumption against retroactive substantive lawmaking is actually reversed when the newly promulgated "law" is a judicial decision, whether overruling a previous decision or otherwise changing the settled course of the law. Chowaniec v. Arlington Park Race Track, Ltd., 934 F.2d 128, 131-32 (7th Cir.1991); NLRB v. Bufco Corp., 899 F.2d 608, 611-12 (7th Cir.1990); Agfa-Gevaert, A.G. v. A.B. Dick Co., 879 F.2d 1518, 1524 (7th Cir.1989); EEOC v. Vucitech, 842 F.2d 936, 941 (7th Cir.1988); In re Resolution Trust Co., 888 F.2d 57, 58 (8th Cir.1989). In reliance on this presumption--which the Supreme Court's recent decision in Beam may, as we noted, have rendered irrebuttable, although the absence of a majority opinion makes it more than usually difficult to construct the Court's holding--we held in McKnight v. General Motors Corp., supra, 908 F.2d at 107, that Patterson should be applied retroactively. This result rested not on the fiction that judges find rather than make law but on such practical reasons as that otherwise litigants might lack adequate incentives to seek legal change through the courts and courts might feel too free to make such changes, because the costs in disturbance of expectations would be minimized by prospective application. Moreover, the power of a court to redistribute wealth and otherwise disturb settled expectations is held in check by the judicial tradition of incremental change and by the limited control that judges exercise over taxing and spending. A legislature has awesome power uncabined by a professional tradition of modesty and this power is held a little in check by the presumption that its handiwork is to be applied only to future conduct.

We might regard this as an exceptional case by...