Courts Should Limit Retroactive Liabilities, Woolhandler Argues

February 22, 2005

WoolhandlerThe judiciary should assess retroactive laws — such as those imposing black lung liabilities — in light of the traditional distinction between public and private rights, said Ann Woolhandler in a lecture Feb. 16 marking her appointment as William Minor Lile Professor of Law. Woolhandler said the distinction between the "seemingly dated" categories of public and private rights provides an organizing principle that explains much of the case law in this area.

Throughout American history, the category of private rights has been understood to include people's common-law interests in bodily integrity, property, and the enforcement of contracts. Public rights, by contrast, were traditionally defined as rights owned by government or by the people in their collective capacity; they included interests in the exercise of delegated government power, interests in enforcing the regulatory and penal laws, and interests in enforcing statutory rights that government might choose to create as a matter of public policy.

Woolhandler observed that constitutional law has traditionally given legislatures far more power to operate retroactively on public rights than on private rights. Throughout the 19th century, legislatures could not enact laws retroactively that affected private rights, such as statutes altering the rules of inheritance that would change the heirs of someone who was already deceased. But legislatures could enact laws that retroactively divested public rights, such as eliminating already accrued statutory causes of action.

Some have argued that the New Deal undermined the distinction between public and private rights. Such critics say that both types of rights "represent delegations of governmental power and …should equally be subject to the demands of the commonweal." Woolhandler disagreed, noting that the distinction between public and private rights "continues to have explanatory force for modern case law."

Although Woolhandler admitted that the modern Supreme Court's decisions about retroactive statutes are somewhat ad hoc, she argued that the traditional distinction remains important and that the Court should adopt a more categorical approach. For example, the Court might use strict scrutiny to assess retroactive statutes concerning private rights, and lenient scrutiny to assess those disposing of public rights.

Some scholars have argued that statutory retroactivity provides incentives for parties to act efficiently; if the legislature can impose retroactive liabilities, people will foresee that they may have to internalize costs that the current law allows them to externalize. She conceded that her proposal might cause some costs to remain externalized, but she urged her audience to "compare the unfairness and inefficiency of this result to the unfairness and inefficiency of a system that sees retroactive legislation as normal." In her view, the current balance cuts against retroactive legislation affecting private rights. Rather than being a suitable subject for retroactive statutes, "the fit between past externalized costs and current liabilities is more appropriately a decision for the courts under current liability schemes."

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