When Are Retroactive Laws Constitutional? 

A recent ruling by the South Carolina Supreme Court on the most mundane of issues — road maintenance fees — offers a window into how state constitutions interact with an ancient villain: retroactive laws, which give legislatures the power to not just say what the law will be in the future but what the law was in the past.

Perhaps “villain” is too strong. In some cases a retroactive law is needed to do justice, especially when it doesn’t negatively impact anyone’s rights or disrupt expectations. For example, if a state legalizes marijuana possession, the legislature should retroactively nullify the sentences of those serving time under the old law.

Often, though, retroactive laws are inherently unfair, upsetting plans and rewriting history. To give one real-life example, you’re injured at work and the legislature then changes the law to limit who might be liable to you. To give another, an estate owes you money but then the legislature nullifies your claim.

When it comes to retroactive criminal punishments, there is no difficulty. They’re unconstitutional under the U.S. Constitution’s ex post facto clauses, which forbid both Congress and the states from passing any law that retroactively increases the punishment for a crime or criminalizes actions that were legal when taken. But since 1798 the U.S. Supreme Court has said “ex post facto” only refers to criminal laws. State courts generally have followed that lead when it comes to their own constitutions. Therefore, both in federal and state constitutional law, litigants fighting retroactive civil legislation have had to look to other avenues for relief.

For centuries American courts have proclaimed things like, “It is a principle in the English common law, as ancient as the law itself, that a statute, even of its omnipotent parliament, is not to have a retrospective effect.” Those are strong words. But they’re a basis for statutory interpretation, underlying the canon of construction making statutes prospective when their time arrow is ambiguous. In England, Parliament ultimately can do whatever it wants. And in America, if the legislature is clear enough, it also generally can change the law of the past. Unlike in the old country, of course, the U.S. or state constitution can prevent the legislature from acting. But when it comes to retroactivity, when and how is often messy and unclear.

This isn’t true in a few states. As Jeffrey Usman, now a judge on the Tennessee Court of Appeals, explained, the constitutions of at least 10 states explicitly ban at least some retroactive civil laws: Colorado, Georgia, Idaho, Massachusetts, Missouri, New Hampshire, New Mexico, Ohio, Tennessee, and Texas (though results in court vary). Elsewhere litigants must find other tools. If a law retroactively upends a contract, then the U.S. Constitution’s Contract Clause, or a state equivalent, might make the law unconstitutional (but as I’ve explained here, it’s difficult). Alternatively, whether or not a contract is at issue, sometimes a due process clause might help. A further tool can be the separation of powers. That brings us back to South Carolina.

Money handed over to one’s county government might be in the form of a tax or a fee. That distinction can matter. A few years back the South Carolina Supreme Court ruled that certain road maintenance fees that county residents paid to license their vehicles in fact were unlawful taxes. A state statute required fees to benefit the payor directly, in contrast to taxes, which are collected to benefit the general public. In response, residents of two different counties sued to recover what they had paid toward road maintenance. And in a further response, the legislature amended the relevant statute, clarifying that fees didn’t need to benefit the payors more than the general public — and that any such fees collected in the past were lawful. The counties then tried to dismiss the cases based on this amendment while the plaintiffs argued the law, as applied retroactively, was unconstitutional as a violation of separation of powers.

The retroactive amendment was a certain species of retroactive law, sometimes called a “declaratory act” or a “validating” or “explanatory” statute. They often arise when the legislature disagrees with how a court has interpreted legislation. It adopts additional legislation to essentially say, “You’re wrong, court, here’s what the law actually meant.” Although they’ve been an aspect of American government from the beginning, the separation of powers between law making (legislatures) and law interpretation (courts) has always rankled American judges. As Professor James Pfander once detailed, courts have often refused to enforce declaratory acts as far back as the founding era.

Things are no different in South Carolina. In a 1974 case, Lindsay v. National Old Line Insurance Company, its supreme court ruled that a declaratory act was unconstitutional under the state constitution’s separation of powers clause because: “The construction of a statute is a judicial function and responsibility.” Lindsay, in turn, relied on an earlier Georgia case that was part of the same tradition Pfander identified. In the years since, the court has used Lindsay several times.

When the road maintenance fees case, Butts v. Mace, ended up back at the South Carolina Supreme Court, the question was whether the court should overrule Lindsay and allow the legislature to change the law of the past.

Last month, it did. Finding Lindsay unreasoned and a break from older South Carolina cases (cases unmentioned in Lindsay), the court unanimously overruled the precedent and said the legislature was free to adopt declaratory acts. It said this was the practice before 1974, even though “such legislation has traditionally been viewed as suspect.” It also said in other matters the court has taken a “functional separation of powers framework,” allowing for some overlap between the branches and that Lindsay departed from this more constitutionally flexible practice. Further, it promoted an expansive view of legislative power under the South Carolina Constitution, stating that if nothing prevents a law from being retroactive — such as a contracts clause — then the legislature can make it so. The court did not address the earlier Georgia case or others of that tradition I mentioned above. This may make it of limited utility elsewhere.

Curiously, though, the court drew the line at the legislature reopening final judgments. This means that plaintiffs who won cases to get their illegal taxes back in the past will not lose their judgment (and winnings) now that the legislature has declared those payments legal fees. The court claimed (without authority) that revisiting those decisions “would raise profound separation of powers concerns.”

It would? Based on what? The same principles and precedent it already discounted? Perhaps some “vested rights” concern? It is an odd tension in the opinion. It seems that reopening judgments would just be a separation-of-powers bridge too far.

Those wrestling with similar retroactivity issues in other states can learn not just from this messy South Carolina example but, more importantly, from the potpourri of other ways states have addressed — and avoided — changing the law of the past.

Once of the most foundational notions of justice is settled expectations, something retroactive legislation strikes at the heart of. There are many tools available to address legislatures’ desire to time travel but they are only as good as the judges who engage with them.

Anthony Sanders is the director of the Center for Judicial Engagement at the Institute for Justice.