Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Lumber Co., 200 U.S. 321, 337.

Syllabus

JAMES M. BEAM DISTILLING CO. v. GEORGIA, et al.

certiorari to the supreme court of georgia

No. 89-680. Argued October 30, 1990 — Decided June 20, 1991

Before 1985, Georgia law imposed an excise tax on imported liquor at a rate double 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.

259 Ga. 363, 382 S. E. 2d 95, reversed and 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. 3-13.

(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, 328. Pp. 3-7.

(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. 7-9.

(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. In 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. 9-12.

(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. 13.

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. 1-3.

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. 1-2.

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. 1-2.

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. Blackmun, J., filed an opinion concurring in the judgment, in which Marshall and Scalia, JJ., joined. Scalia, J., filed an opinion concurring in the judgment, in which Marshall and Blackmun, JJ., joined. O'Connor, J., filed a dissenting opinion, in which Rehnquist, C. J., and Kennedy, J., joined.