Personal Freedom

Can the Government Make Laws—and Punishments—Retroactive?

“No bill of attainder, ex post facto law, or law impairing the obligation of contracts shall be passed.”
—Utah Constitution, Article 1, Section 18 (see also Article 1, Section 10 of the U.S. Constitution)

A fundamental principle of law in our country is that of prospective application—that laws should apply to individuals and actions in the future as opposed to retroactively in the past. For this reason, both the United States and Utah Constitutions expressly prohibit “ex post facto” laws—laws that apply after the fact. This principle was so obvious to the Constitution’s framers that some even opposed its inclusion, arguing that it was unnecessary.

Oliver Ellsworth, a delegate from Connecticut, said “there was no lawyer, no civilian who would not say that ex post facto laws were void in themselves” and James Wilson, a delegate from Pennsylvania, was literally embarrassed at the thought of what other nations would think if the Constitution made explicit something so obvious. He said he was “against inserting anything in the Constitution as to ex post facto laws. It will bring reflexions on the Constitution—and proclaim that we are ignorant of the first principles of Legislation, or are constituting a Government which will be so.”

After ratification of the Constitution, Thomas Jefferson remarked that some state constitutions did not see the need to even mention the prohibition on ex post facto laws because it was so obvious:

The sentiment that ex post facto laws are against natural right, is so strong in the United States, that few, if any, of the State constitutions have failed to proscribe them. The federal constitution indeed interdicts them in criminal cases only; but they are equally unjust in civil as in criminal cases, and the omission of a caution which would have been right, does not justify the doing what is wrong.

However, in Utah, retroactive laws are permitted—the state’s constitution notwithstanding—at the explicit direction of the legislature. Under Section 68-3-3 “a provision of the Utah Code is not retroactive, unless the provision is expressly declared to be retroactive.” Relying on this statute, a handful of laws include express retroactivity clauses. Typically this is used for clarifying the intent or purpose of a previously passed law or for amending some procedural issue related to a law.

Examples of Utah statutes with retroactivity clauses:

Despite these examples of express retroactivity, it is possible that a law could inadvertently operate retroactively. This typically happens when an amendment to an existing statute changes the way the existing law operates. Typically these changes are largely procedural but could at times be substantive.

One bill this year, HB 416, had it passed, may have had the retroactive effect of removing John Swallow’s state retirement benefits. No matter what one thinks of Mr. Swallow, his actions in office, and the current case against him, it is clear that if he is ultimately convicted of offenses likely to be covered by this bill, had it passed, he would have had to forfeit his retirement benefits. Grounds for forfeiture of retirement benefits is a pretty substantive legal issue and was not an original part of Swallow’s initial employment agreement upon which he originally relied when entering into an employment arrangement.

The bill would have added 58 lines of new statutory text and created a substantively new rule governing retirement benefits for elected and certain appointed state officials. The bill itself seems generally like a good idea as it conditions the time-based accrual of public retirement benefits on whether an official would have been fireable from an offense committed while in office during that time. Moreover, on its face, the bill was not designed to be retroactive. However, the effect of the bill on Mr. Swallow would have been retroactive as Swallow, upon conviction in the future, would lose retirement accrual and vesting from the date of any related offense for which he might be convicted—an arrangement that did not exist at the time of the offense.

The original bill had neither an express retroactivity clause or an express prohibition on retroactive application. Therefore, the application of this new penalty on Swallow would likely be litigated and ultimately determined by a court. Given the legal precedent in Utah for retroactive laws, Mr. Swallow may have had a decent chance of winning such a challenge.

In Utah, the courts follow the U.S. Supreme Court rule for “ex post facto” laws. This rule comes from the case of Beazell v. Ohio, 269 U.S. 167 (1925) where the Court stated a three part rule that “any statute which [1] punishes as a crime an act previously committed, which was innocent when done, which [2] makes more burdensome the punishment for a crime, after its commission, or which [3] deprives one charged with crime of any defense available according to law at the time when the act was committed, is prohibited as ex post facto.”

The Court distinguished between substantive and procedural changes maintaining that mere procedural changes are not prohibited as “ex post facto” but went on to clarify that “just what alterations of procedure will be held to be of sufficient moment to transgress the constitutional prohibition cannot be embraced within a formula or stated in a general proposition. The distinction is one of degree. But the constitutional provision was intended to secure substantial personal rights against arbitrary and oppressive legislation, and not to limit the legislative control of remedies and modes of procedure which do not affect matters of substance.”

The Utah Supreme Court has established a similar rule in the case of Docutel Olivetti Corp. v. Dick Brady Systems, Inc., 731 P.2d 475 (Utah 1986). “Procedural statutes enacted subsequent to the initiation of a suit which do not enlarge, eliminate or destroy vested or contractual rights apply not only to future actions, but also to accrued and pending actions as well…whether legislation affects litigation pending when the legislation becomes effective depends on whether the legislation is substantive or procedural.” Thus, we learn that those statutes that do “eliminate or destroy a vested or contractual right” may not apply retroactively.

However, this is highly contingent on whether the statute is construed as substantive or procedural. The court addressed this in Wash. Nat. Ins. v. Sherwood Assoc., 795 P.2d 665 (Utah Ct. App. 1990): “substantive law is defined as the positive law which creates, defines and regulates the rights and duties of the parties and which may give rise to a cause for action, as distinguished from adjective law which pertains to and prescribes the practice and procedure or the legal machinery by which the substantive law is determined or made effective.”

This analysis is important because courts are careful to ensure that a party’s rights at the time of occurrence are protected. In OSI Indus. v. Utah State Tax Comm’n, 860 P.2d 381, 383 (Utah Ct.App.1993) the court said that “as a general rule, a party is entitled to have its rights determined on the basis of the law as it existed at the time of the occurrence, and a later statute or amendment should not be applied retroactively so as to deprive a party of its rights or impose greater liability upon it.” The court goes on to cite Docutel in giving exception only in “procedural statutes enacted subsequent to the initiation of a suit which do not enlarge, eliminate, or destroy vested or contractual rights.”

This appellate court decision applies the decision of the Utah Supreme Court which ruled against retroactivity in an actual employment rights issue. In Okland Construction Co. v. Industrial Commission, 520 P.2d 208 (Utah 1974): “It is true, as the employer Okland contends: that it is entitled to have its rights determined on the basis of the law as it existed at the time of the occurrence; and that a later statute or amendment should not be applied in a retroactive manner to deprive a party of his rights or impose greater liability upon him. But this principle has no application where the later statute or amendment deals only with clarification or amplification as to how the law should have been understood prior to its enactment. In any event, we revert to consideration of the problem under the statute as it existed at the time of the accident, and without concern as to the later amendment.” The importance of a party’s rights at the time of the occurrence is important because it is those rights upon which an individual relies in making decisions. The Utah Supreme Court echoed this in Stephens v. Henderson, 741 P. 2d 952 (Utah 1987): “the application of a statute is retroactive if it alters the substantive law on which the parties relied.”

Taken together, the case law in Utah suggests that in the event that this proposed law to forfeit retirement funds for an offense or occurrence in the past—an occurrence that at the time would not have resulted in the substantive forfeiture of retirement benefits—would be considered a retroactive law and, without an express retroactive clause in the enabling bill, it would likely be struck down by the courts. However, the more important question is whether retroactive laws ought to exist or can exist under the Utah Constitution at all.

Interestingly, the Utah Supreme Court once upheld a retroactive excise tax on diesel fuel under the reasoning that the prohibition on ex post facto laws only applied to criminal matters. In Garrett Freight Lines, Inc. v. State Tax Comm’n, 103 Utah 390, 135 P.2d 523 (1943), the court said that “neither the Federal Constitution nor the Utah Constitution has any provision in terms prohibiting retroactive legislation — excepting that which forbids the enactment of ex post facto laws…That clause relates to criminal or penal matters and does not affect legislation such as the statute here involved [excise tax on diesel fuel].” The court went on to reflect that “some of the states have constitutional provisions which expressly forbid retrospective legislation but in the absence of such provisions in the Constitution a tax measure with a retroactive feature such as the provision here attacked is not invalid.”

By narrowing the prohibition on ex post facto laws to criminal matters only, the court seems to violate that principle Thomas Jefferson articulated about the “omission of a caution which would have been right, does not justify the doing what is wrong.” In Utah, it appears that the court reads the prohibition on ex post facto laws narrowly based on persuasive precedent in other jurisdictions that confine the prohibition to criminal matters only. This is despite the fact that the state Constitution contains no such narrowing. Thus, while the legislature has bound itself to only allowing retroactive laws when expressly articulated in a bill, such laws seem to be permitted despite the constitutional provision against ex post facto laws.

While this leaves open the possibility that a civil statute might be upheld in its retroactive application, the court has shown restraint in applying statutes retroactively when individuals would be impacted by their previous justifiable reliance on the existing law at the time of their actions. In Van Dyke v. Chappell, 818 P.2d 1023 (Utah 1991), the court explained that “in making this determination, we look to the impact retroactive application would have on those affected. When we conclude that there has been justifiable reliance on the prior state of the law or that the retroactive operation of the new law may otherwise create an undue burden, the court may order that a decision apply only prospectively.”

While it is heartening that the court may use its discretion to resist “doing what is wrong” by ordering a law to apply only prospectively, it seems that the very possibility that a civil law could apply retroactively in Utah at all violates that fundamental principle of law the founders felt would make such laws “void in themselves.”

We must ask ourselves if “we are ignorant of the first principles of Legislation,” as James Wilson feared.