Retroactivity of Decisions

Courts: Retroactivity of Decisions

MONTANA SUPREME COURT DECISIONS

Flynn v. Montana State Fund, 2011 MT 300, 363 Mont. 55, 267 P.3d 23 The WCC properly applied retroactivity analysis in the unique field of workers’ compensation law, a system which is by nature open-ended. Despite the potentially indefinite length of a party’s claim, principles of finality must still be incorporated and the Court must properly give credit to the necessary balance between finality and fairness.

Flynn v. Montana State Fund, 2008 MT 394, 347 Mont. 146, 197 P.3d 1007 In Stavenjord II, the Montana Supreme Court did not intend to alter the retroactivity analysis previously set forth in Dempsey and Schmill II. Stavenjord II created no new law, but used the term “open” to mean “not final.” The retroactivity principles set forth in Dempsey and Stavenjord II – applicable to cases not “final” or “settled” – is reaffirmed.

Stavenjord v. Montana State Fund, 2006 MT 257, 334 Mont. 117, 146 P.3d 724 There is no legal authority for “partial” retroactive application, and the Chevron exception does not allow for partial retroactivity. Either Chevron’s factors are met – in which case prospective application is justified – or they are not.

Stavenjord v. Montana State Fund, 2006 MT 257, 334 Mont. 117, 146 P.3d 724 Where the purpose and effect of the court’s ruling is to provide equal protection under the law to partially disabled workers, regardless of whether they suffer an injury or from an occupational disease, restricting the ruling’s application to claims arising only after the court’s decision furthers neither the purpose nor the effect of the ruling. Therefore, the second Chevron factor is not met and retroactive application is proper.

Stavenjord v. Montana State Fund, 2006 MT 257, 334 Mont. 117, 146 P.3d 724 Although the benefits at issue in this case differed from the benefits at issue in Henry v. State Compens. Ins. Fund, 1999 MT 126, 294 Mont. 449, 982 P.2d 456, the analysis of equal protection for similarly situated workers are parallel and therefore the issue of first impression decided in this case was “clearly foreshadowed” by the decision in Henry. Therefore, the first Chevron factor is not met and retroactive application is proper.

Stavenjord v. Montana State Fund, 2006 MT 257, 334 Mont. 117, 146 P.3d 724 As clarified in Dempsey v. Allstate Ins. Co., 2004 MT 391, 325 Mont. 207, 104 P.3d 483, and Schmill v. Liberty Northwest Ins. Corp., 2005 MT 144, 327 Mont. 293, 114 P.3d 204, a party arguing for purely prospective application of the Montana Supreme Court’s jurisprudence must show that all three factors of the test set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349 (1971), are met.

Dempsey v. Allstate Ins. Co., 2004 MT 391, 325 Mont. 207, 104 P.3d 483 All civil decisions of the Montana Supreme Court apply retroactively to cases pending on direct review or not yet final (or settled), unless a party proves all three of the factors stated in Chevron v. Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). Consistent with Harper v. Virginia Dep’t of Taxation, 509 U.S. 86, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993), the Montana Supreme Court finds that limiting a rule of law to its prospective application generally creates an arbitrary distinction between litigants based merely on the timing of their claims, though the Court reserves the possibility of prospective application per Chevron where all three Chevron factors apply. In other cases, when a decision issues, the line should be drawn between claims that are final and those that are not (the line drawn in Harper).

WORKERS' COMPENSATION COURT DECISIONS

Flynn v. Montana State Fund [09/29/06] 2006 MTWCC 31 Consistent with the Montana Supreme Court’s holding in Dempsey v. Allstate Ins. Co., 2004 MT 391, 325 Mont. 207, 104 P.3d 483, the retroactive effect of a decision does not apply to cases which are final or settled prior to a decision’s issuance. Therefore, although the court in Schmill II commented that many claims which might be affected by the rule of law announced in Schmill I are “settled, closed, or inactive,” it explicitly directed this Court to determine, within the context of workers’ compensation law, which cases would be considered “final or settled.”

Mathews v. Liberty Northwest Ins. Corp. [06/01/05] 2005 MTWCC 29 Mathews v. Liberty Northwest Ins. Corp., 2003 MT 116, 315 Mont. 441, 68 P.3d 865, must be applied retroactively in light of Dempsey v. Allstate, 2004 MT 391, 325 Mont. 207, which requires that judicial decisions be applied retroactively unless all three of the Chevron factors favor prospective application. Here, only one of the Chevron factors favored prospective application.

Stavenjord v. State Fund [8/27/04] 2004 MTWCC 62 The equity factor under Chevron Oil Co. v. Huson, 404 U.S. 97 (1971), preponderates in favor of retroactive application of Stavenjord v. State Compensation Ins. Fund, 2001 MTWCC 25, aff’d, 2003 MT 67, 314 Mont. 466, 67 P.3d 229, back to June 3, 1999, which is the date on which Henry v. State Compensation Ins. Fund, 1999 MT 126, 294 Mont. 449, 982 P.2d 456 was decided. But in light of the failure of any claimant to prosecute a constitutional challenge to the 1987 occupational disease act for nearly a decade, and the administrative hardship and expense of going back seventeen years to recompute benefits due claimants, the factor preponderates against retroactive application prior to June 3, 1999. Accordingly, Stavenjord applies retroactively only to June 3, 1999.

Stavenjord v. State Fund [8/27/04] 2004 MTWCC 62 If any one of the three Chevron factors preponderates against retroactive application, a decision applies prospectively only. Poppleton v. Rollins, 226 Mont. 267, 271, 735 P.2d 286, 289 (1987).

Stavenjord v. State Fund [8/27/04] 2004 MTWCC 62 As recently determined in Schmill v. Liberty Northwest Ins. Corp., 2004 MTWCC 47, Montana decisions concerning retroactivity of judicial decisions are in conflict; however, the latest decision available to the Workers' Compensation Court indicates that Montana follows the three-part test laid out in Chevron Oil Co. v. Huson, 404 U.S. 97 (1971), rather than the per se rule of Harper v. Virginia Dept. of Taxation, 509 U.S. 86 (1993).

Stavenjord v. State Fund [8/27/04] 2004 MTWCC 62 The void ab initio doctrine does not make the decision in Stavenjord v. State Compensation Ins. Fund, 2001 MTWCC 25, aff’d, 2003 MT 67, 314 Mont. 466, 67 P.3d 229, retroactive. The statute declared unconstitutional in Stavenjord is unconstitutional only as applied, not on its face.

Mathews v. Liberty NW [9/12/04] 2004 MTWCC 55A If any one of the three Chevron factors favors nonretroactive application, then the decision at issue must be applied prospectively and not retroactively. Poppleton v. Rollins, 226 Mont. 267, 735 P.2d 286 (1987).

Schmill v. Liberty Northwest Ins. Co. and State Fund [6/4/04] 2004 MTWCC 47 Montana decisions concerning retroactivity of judicial decisions are in conflict, however, the latest decision available to the Workers' Compensation Court as of June 1, 2004, indicates that Montana follows the three part Chevron test regarding retroactivity rather than the per se rule of Harper v. Virginia Dept. of Taxation, 509 U.S. 86 (1993).

Schmill v. Liberty Northwest Ins. Co. and State Fund [6/4/04] 2004 MTWCC 47 Schmill v. Liberty Northwest Ins. Corp., 2003 MT 80, 315 Mont. 51, 67 P.3d 290, is retroactive.

Flynn v. State Fund [8/5/03] 2003 MTWCC 55 Given different statements of the Montana Supreme Court in recent cases, it is unclear whether Montana has adopted a blanket rule giving retroactive effect to judicial decisions or whether it still follows the three-part Chevron test in determining retroactivity. This Court's impression is that when it directly confronts the issue the Supreme Court will follow Harper v. Virginia Dept. of Taxation, 509 U.S. 86 (1993), and adopt a blanket rule of retroactivity.

Flynn v. State Fund [8/5/03] 2003 MTWCC 55 Whether a blanket rule of retroactivity or the three-part analysis of Chevron Oil C. v. Huson, 404 U.S. 97 (1971), is applied, Flynn v. State Compensation Ins. Fund, 2002 MT 279, 312 Mont. 410, 60 P.3d 397 must be applied retroactively. Under Chevron analysis, retroactive application is consistent with the purpose of the rule announced in Flynn and the purposes of the Workers' Compensation Act. The inequities of applying the decision retroactively are slight in comparison and are offset by financial gain the State Fund has previously reaped from computing benefits inconsistently with the rule announced in Flynn.