In Davis v. Michigan Dept. of Treasury, 489 U. S. 803, this Court invalidated Michigan's practice of taxing retirement benefits paid by the Federal Government while exempting retirement benefits paid by the State or its political subdivisions. Because Michigan conceded that a refund to federal retirees was the appropriate remedy, the Court remanded for entry of judgment against the State. Virginia subsequently amended a similar statute that taxed federal retirees while exempting state and local retirees. Petitioners, federal civil service and military retirees, sought a refund of taxes assessed by Virginia before the revision of this statute. Applying the factors set forth in Chevron Oil Co. v. Huson, 404 U. S. 97, 106-107, a state trial court denied relief to petitioners as to all taxable events occurring before Davis was decided. In affirming, the Virginia Supreme Court concluded that Davis should not be applied retroactively under Chevron Oil and American Trucking Assns., Inc. v. Smith, 496 U. S. 167 (plurality opinion). It also held, as matters of state law, that the assessments were neither erroneous nor improper and that a decision declaring a tax scheme unconstitutional has solely prospective effect. In James B. Beam Distilling Co. v. Georgia, 501 U. S. 529, however, six Members of this Court required the retroactive application of Bacchus Imports, Ltd. v. Dias, 468 U. S. 263-which prohibited States from imposing higher excise taxes on imported alcoholic beverages than on locally produced beverages-to claims arising from facts predating that decision. Those Justices disagreed with the Georgia Supreme Court's use of Chevron Oil's retroactivity analysis. Mter this Court ordered reevaluation of petitioners' suit in light of Beam, the Virginia Supreme Court reaffirmed its decision in all respects. It held that Beam did not foreclose the use of Chevron Oil's analysis because Davis did not decide whether its rule applied retroactively.
1. When this Court applies a rule of federal law to the parties before it, that rule is the controlling interpretation of federal law and must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate the announcement of the rule. Pp. 94-99.
(a) This rule fairly reflects the position of a majority of Justices in Beam and extends to civil cases the ban against "selective application of new rules" in criminal cases. Griffith v. Kentucky, 479 U. S. 314, 323. Mindful of the "basic norms of constitutional adjudication" animating the Court's view of retroactivity in criminal cases, id., at 322-that the nature of judicial review strips the Court of the quintessentially legislative prerogative to make rules of law retroactive or prospective as it sees fit and that selective application of new rules violates the principle of treating similarly situated parties the same, id., at 322, 323-the Court prohibits the erection of selective temporal barriers to the application of federal law in noncriminal cases. When the Court does not reserve the question whether its holding should be applied to the parties before it, the opinion is properly understood to have followed the normal rule of retroactive application, Beam, 501 U. S., at 540 (opinion of SOUTER, J.), and the legal imperative to apply such a rule prevails "over any claim based on a Chevron Oil analysis," ibid. Pp. 94-98.
(b) This Court applied the rule of law announced in Davis to the parties before the Court. The Court's response to Michigan's concession that a refund would be appropriate in Davis, far from reserving the retroactivity question, constituted a retroactive application of the rule. A decision to accord solely prospective effect to Davis would have foreclosed any discussion of remedial issues. Pp. 98-99.
2. The decision below does not rest on independent and adequate state-law grounds. In holding that state-law retroactivity doctrine permitted the solely prospective application of the ruling, the State Supreme Court simply incorporated into state law the analysis of Chevron Oil and criminal retroactivity cases overruled by Griffith. The Supremacy Clause, however, does not allow federal retroactivity doctrine to be supplanted by the invocation of a contrary approach to retroactivity under state law. Similarly, the state court's conclusion that the challenged assessments were not erroneous or improper under state law rested solely on its determination that Davis did not apply retroactively. pp. 99-100.
ess, and since that issue has not been properly presented, this question and the performance of other tasks pertaining to the crafting of an appropriate remedy are left to the Virginia courts. Pp. 100-102.
242 Va. 322, 410 S. E. 2d 629, reversed and remanded.
THOMAS, J., delivered the opinion of the Court, in which BLACKMUN, STEVENS, SCALIA, and SOUTER, JJ., joined, and in Parts I and III of which WHITE and KENNEDY, JJ., joined. SCALIA, J., filed a concurring opinion, post, p. 102. KENNEDY, J., filed an opinion concurring in part and concurring in the judgment, in which WHITE, J., joined, post, p. 110. O'CONNOR, J., filed a dissenting opinion, in which REHNQUIST, C. J., joined, post, p. 113.
Michael J. Kator argued the cause and filed the briefs for petitioners.
Gail Starling Marshall argued the cause for respondent.
E. Carpenter, Attorney General of Maine, J. Joseph Curran, Jr., Attorney General of Maryland, Scott Harshbarger, Attorney General of Massachusetts, Frank J. Kelley, Attorney General of Michigan, Hubert H. Humphrey III, Attorney General of Minnesota, Michael C. Moore, Attorney General of Mississippi, Marc Racicot, Attorney General of Montana, Don Stenberg, Attorney General of Nebraska, Frankie Sue Del Papa, Attorney General of Nevada, John P. Arnold, Attorney General of New Hampshire, Robert J. Del Tufo, Attorney General of New Jersey, Tom Udall, Attorney General of New Mexico, Robert Abrams, Attorney General of New York, Lee Fisher, Attorney General of Ohio, Susan B. Loving, Attorney General of Oklahoma, Charles S. Crookham, Attorney General of Oregon, Ernest D. Preate, Jr., Attorney General of Pennsylvania, Jorge Perez-Diaz, Attorney General of Puerto Rico, James E. O'Neil, Attorney General of Rhode Island, A. Crawford Clarkson, Jr., Mark Barnett, Attorney General of South Dakota, Charles W Burson, Attorney General of Tennessee, Dan Morales, Attorney General of Texas, Jeffrey L. Amestoy, Attorney General of Vermont, Rosalie Simmonds Ballentine, Attorney General of the Virgin Islands, Kenneth O. Eikenberry, Attorney General of Washington, Mario J. Palumbo, Attorney General of West Virginia, Joseph B. Meyer, Attorney General of Wyoming, and James E. Doyle, Jr., Attorney General of Wisconsin; for the city of New York by O. Peter Sherwood, Edward F. X. Hart, and Stanley Buchsbaum; and for the National Governors' Association et al. by Richard Ruda and Charles Rothfeld.
Briefs of amici curiae were filed for Designated Federal Retirees in Kansas et al. by John C. Frieden, Kevin M. Fowler, Kenton C. Granger, Roger M. Theis, Carrold E. Ray, G. Eugene Boyce, Donald L. Smith, Edmund F. Sheehy, Jr., Brian A. Luscher, Gene M. Connell, Jr., and J. Doy le Fuller; for James B. Beam Distilling Co. by Morton Siegel, Michael A. Moses, Richard G. Schoenstadt, James L. Webster, and John L. Taylor, Jr.; for the Military Coalition by Eugene Q Duffy; and for the Virginia Manufacturers Association by Walter A. Smith, Jr.
taxes imposed before Davis was decided. In accord with Griffith v. Kentucky, 479 U. S. 314 (1987), and James B. Beam Distilling Co. v. Georgia, 501 U. S. 529 (1991), we hold that this Court's application of a rule of federal law to the parties before the Court requires every court to give retroactive effect to that decision. We therefore reverse.
1 "The United States consents to the taxation of payor compensation for personal service as an officer or employee of the United States ... by a duly constituted taxing authority having jurisdiction, if the taxation does not discriminate against the officer or employee because of the source of the payor compensation." 4 U. S. C. § 111.
2We have since followed Davis and held that a State violates intergovernmental tax immunity and 4 U. S. C. § 111 when it "taxes the benefits received from the United States by military retirees but does not tax the benefits received by retired state and local government employees." Barker v. Kansas, 503 U. S. 594, 596 (1992).
Petitioners, 421 federal civil service and military retirees, sought a refund of taxes "erroneously or improperly assessed" in violation of Davis' nondiscrimination principle. Va. Code Ann. §58.1-1826 (1991). The trial court denied relief. Law No. CL891080 (Va. Cir. Ct., Mar. 12, 1990). Applying the factors set forth in Chevron Oil Co. v. Huson, supra, at 106-107,4 the court reasoned that "Davis decided an issue of first impression whose resolution was not clearly foreshadowed," that "prospective application of Davis will not retard its operation," and that "retroactive application would result in inequity, injustice and hardship." App. to Pet. for Cert. 20a.
3 Applications for tax refunds generally must be made within three years of the assessment. Va. Code Ann. § 58.1-1825 (1991). As of the date we decided Davis, this statute of limitations would have barred all actions seeking refunds from taxes imposed before 1985.
4 "First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolution was not clearly foreshadowed. Second, it has been stressed that 'we must ... weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.' Finally, we have weighed the inequity imposed by retroactive application .... " Chevron Oil Co. v. Huson, 404 U. S., at 106-107 (citations omitted).
[were] due as a matter of state law." Ibid. It concluded that "because the Davis decision is not to be applied retroactively, the pre-Davis assessments were neither erroneous nor improper" under Virginia's tax refund statute. Id., at 241, 401 S. E. 2d, at 873. As a matter of Virginia law, the court held, a "ruling declaring a taxing scheme unconstitutional is to be applied prospectively only." Ibid. This rationale supplied "another reason" for refusing relief. Ibid.
Even as the Virginia courts were denying relief to petitioners, we were confronting a similar retroactivity problem in James B. Beam Distilling Co. v. Georgia, 501 U. S. 529 (1991). At issue was Bacchus Imports, Ltd. v. Dias, 468 U. S. 263 (1984), which prohibited States from imposing higher excise taxes on imported alcoholic beverages than on local products. The Supreme Court of Georgia had used the analysis described in Chevron Oil Co. v. Huson to deny retroactive effect to a decision of this Court. Six Members of this Court disagreed, concluding instead that Bacchus must be applied retroactively to claims arising from facts predating that decision. Beam, 501 U. S., at 532 (opinion of SouTER, J.); id., at 544-545 (WHITE, J., concurring in judgment); id., at 547-548 (BLACKMUN, J., concurring in judgment); id., at 548-549 (SCALIA, J., concurring in judgment). After deciding Beam, we vacated the judgment in Harper and remanded for further consideration. 501 U. S. 1247 (1991).
631, the court "reaffirm[ed] [its] prior decision in all respects," id., at 327, 410 S. E. 2d, at 632.
6 Bohn v. Waddell, 167 Ariz. 344, 349, 807 P. 2d 1, 6 (Tax Ct. 1991); Sheehy v. State, 250 Mont. 437, 820 P. 2d 1257 (1991), cert. pending, No. 91-1473; Duffy v. Wetzler, 174 App. Div. 2d 253, 265, 579 N. Y. S. 2d 684, 691, appeal denied, 80 N. Y. 2d 890, 600 N. E. 2d 627 (1992), cert. pending, No. 92-521; Swanson v. State, 329 N. C. 576, 581-584, 407 S. E. 2d 791, 793-795 (1991), aff'd on reh'g, 330 N. C. 390, 410 S. E. 2d 490 (1991), cert. pending, No. 91-1436; Ragsdale v. Department of Revenue, 11 Ore. Tax 440 (1990), aff'd on other grounds, 312 Ore. 529, 823 P. 2d 971 (1992); Bass v. State, 307 S. C. 113, 121-122,414 S. E. 2d 110, 114-115 (1992), cert. pending, No. 91-1697.
After the Supreme Court of Virginia reaffirmed its original decision, we granted certiorari a second time. 504 U. S. 907 (1992). We now reverse.
7 Several other state courts have ordered refunds as a matter of state law in claims based on Davis. See, e. g., Kuhn v. State, 817 P. 2d 101, 109-110 (Colo. 1991); Hackman v. Director of Revenue, 771 S. W. 2d 77, 80-81 (Mo. 1989), cert. denied, 493 U. S. 1019 (1990).
8 Accord, e. g., Tehan v. United States ex rel. Shott, 382 U. S. 406 (1966) (limiting Griffin v. California, 380 U. S. 609 (1965)); Johnson v. New Jersey, 384 U. S. 719 (1966) (limiting Escobedo v. Illinois, 378 U. S. 478 (1964), and Miranda v. Arizona, 384 U. S. 436 (1966)); Stovall v. Denno, 388 U. S. 293 (1967) (limiting United States v. Wade, 388 U. S. 218 (1967), and Gilbert v. California, 388 U. S. 263 (1967)).
We subsequently overruled Linkletter in Griffith v. Kentucky, 479 U. S. 314 (1987), and eliminated limits on retroactivity in the criminal context by holding that all "newly declared ... rule[s]" must be applied retroactively to all "criminal cases pending on direct review." Id., at 322. This holding rested on two "basic norms of constitutional adjudication." Ibid. First, we reasoned that "the nature of judicial review" strips us of the quintessentially "legislat[ive]" prerogative to make rules of law retroactive or prospective as we see fit. Ibid. Second, we concluded that "selective application of new rules violates the principle of treating similarly situated [parties] the same." Id., at 323.
9We need not debate whether Chevron Oil represents a true "choice-oflaw principle" or merely "a remedial principle for the exercise of equitable discretion by federal courts." American Trucking Assns., Inc. v. Smith, 496 U. S. 167, 220 (1990) (STEVENS, J., dissenting). Compare id., at 191197 (plurality opinion) (treating Chevron Oil as a choice-of-Iaw rule), with id., at 218-224 (STEVENS, J., dissenting) (treating Chevron Oil as a remedial doctrine). Regardless of how Chevron Oil is characterized, our decision today makes it clear that "the Chevron Oil test cannot determine the choice of law by relying on the equities of the particular case" and that the federal law applicable to a particular case does not turn on "whether [litigants] actually relied on [an] old rule [or] how they would suffer from retroactive application" of a new one. James B. Beam Distilling Co. v. Georgia, 501 U. S. 529, 543 (1991) (opinion of SOUTER, J.).
at 179 (opinion of O'CONNOR, J., joined by REHNQUIST, C. J., and WHITE and KENNEDY, JJ.). Four other Justices rejected the plurality's "anomalous approach" to retroactivity and declined to hold that "the law applicable to a particular case is that law which the parties believe in good faith to be applicable to the case." Id., at 219 (STEVENS, J., dissenting, joined by Brennan, Marshall, and BLACKMUN, JJ.). Finally, despite concurring in the judgment, JUSTICE SCALIA "share[d]" the dissent's "perception that prospective decisionmaking is incompatible with the judicial role." Id., at 20l.
joined by Marshall and SCALIA, JJ., concurring in judgment). See also id., at 548-549 (SCALIA, J., joined by Marshall and BLACKMUN, JJ., concurring in judgment).
Beam controls this case, and we accordingly adopt a rule that fairly reflects the position of a majority of Justices in Beam: When this Court applies a rule of federal law to the parties before it, that rule is the controlling interpretation of federal law and must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate our announcement of the rule. This rule extends Griffith's ban against "selective application of new rules." 479 U. S., at 323. Mindful of the "basic norms of constitutional adjudication" that animated our view of retroactivity in the criminal context, id., at 322, we now prohibit the erection of selective temporal barriers to the application of federal law in noncriminal cases. In both civil and criminal cases, we can scarcely permit "the substantive law [to] shift and spring" according to "the particular equities of [individual parties'] claims" of actual reliance on an old rule and of harm from a retroactive application of the new rule. Beam, supra, at 543 (opinion of SOUTER, J.). Our approach to retroactivity heeds the admonition that "[t]he Court has no more constitutional authority in civil cases than in criminal cases to disregard current law or to treat similarly situated litigants differently." American Trucking, supra, at 214 (STEVENS, J., dissenting).
the Court." Beam, 501 U. S., at 539 (opinion of SOUTER, J.). Accord, id., at 544-545 (WHITE, J., concurring in judgment); id., at 550 (O'CONNOR, J., dissenting). Furthermore, the legal imperative "to apply a rule of federal law retroactively after the case announcing the rule has already done so" must "prevai[l] over any claim based on a Chevron Oil analysis." Id., at 540 (opinion of SOUTER, J.).
In an effort to distinguish Davis, the Supreme Court of Virginia surmised that this Court had "made no ... ruling" about the application of the rule announced in Davis "retroactively to the litigants in that case." 242 Va., at 326, 410 S. E. 2d, at 631. "[B]ecause the retroactivity issue was not decided in Davis," the court believed that it was "not foreclosed by precedent from applying the three-pronged Chevron Oil test in deciding the retroactivity issue in the present case." Ibid.
We disagree. Davis did not hold that preferential state tax treatment of state and local employee pensions, though constitutionally invalid in the future, should be upheld as to all events predating the announcement of Davis. The governmental appellee in Davis "conceded that a refund [would have been] appropriate" if we were to conclude that "the Michigan Income Tax Act violate[d] principles of intergovernmental tax immunity by favoring retired state and local governmental employees over retired federal employees." 489 U. S., at 817. We stated that "to the extent appellant has paid taxes pursuant to this invalid tax scheme, he is entitled to a refund." Ibid. Far from reserving the retroactivity question, our response to the appellee's concession constituted a retroactive application of the rule announced in Davis to the parties before the Court. Because a decision to accord solely prospective effect to Davis would have foreclosed any discussion of remedial issues, our "consideration of remedial issues" meant "necessarily" that we retroactively applied the rule we announced in Davis to the litigants before us. Beam, supra, at 539 (opinion of SOUTER, J.).
Therefore, under Griffith, Beam, and the retroactivity approach we adopt today, the Supreme Court of Virginia must apply Davis in petitioners' refund action.
We reject the department's defense of the decision below.
The Supremacy Clause, U. S. Const., Art. VI, cl. 2, does not allow federal retroactivity doctrine to be supplanted by the invocation of a contrary approach to retroactivity under state law. Whatever freedom state courts may enjoy to limit the retroactive operation of their own interpretations of state law, see Great Northern R. Co. v. Sunburst Oil & Refining Co., 287 U. S. 358, 364-366 (1932), cannot extend to their interpretations of federal law. See National Mines Corp. v. Caryl, 497 U. S. 922, 923 (1990) (per curiam); Ashland Oil, Inc. v. Caryl, 497 U. S. 916, 917 (1990) (per curiam).
Alcoholic Beverages and Tobacco, Fla. Dept. of Business Regulation, 496 U. S. 18, 39-40 (1990). If Virginia "offers a meaningful opportunity for taxpayers to withhold contested tax assessments and to challenge their validity in a predeprivation hearing," the "availability of a predeprivation hearing constitutes a procedural safeguard ... sufficient by itself to satisfy the Due Process Clause." Id., at 38, n. 21. On the other hand, if no such predeprivation remedy exists, "the Due Process Clause of the Fourteenth Amendment obligates the State to provide meaningful backward-looking relief to rectify any unconstitutional deprivation." Id., at 31 (footnotes omitted).lO In providing such relief, a State may either award full refunds to those burdened by an unlawful tax or issue some other order that "create[s] in hindsight a nondiscriminatory scheme." Id., at 40. Cf. Davis, 489 U. S., at 818 (suggesting that a State's failure to respect intergovernmental tax immunity could be cured "either by extending [a discriminatory] tax exemption to retired federal employees ... or by eliminating the exemption for retired state and local government employees").
10 A State incurs this obligation when it "places a taxpayer under duress promptly to pay a tax when due and relegates him to a postpayment refund action in which he can challenge the tax's legality." McKesson, 496 U. S., at 31. A State that "establish[es] various sanctions and summary remedies designed" to prompt taxpayers to "tender ... payments before their objections are entertained and resolved" does not provide taxpayers "a meaningful opportunity to withhold payment and to obtain a predeprivation determination of the tax assessment's validity." Id., at 38 (emphasis in original). Such limitations impose constitutionally significant" 'duress'" because a tax payment rendered under these circumstances must be treated as an effort "to avoid financial sanctions or a seizure of real or personal property." Id., at 38, n. 21. The State accordingly may not confine a taxpayer under duress to prospective relief.
prior to its payment, or by allowing taxpayers to withhold payment and then interpose their objections as defenses in a tax enforcement proceeding." McKesson, 496 U. S., at 3637. Because this issue has not been properly presented, we leave to Virginia courts this question of state law and the performance of other tasks pertaining to the crafting of any appropriate remedy. Virginia "is free to choose which form of relief it will provide, so long as that relief satisfies the minimum federal requirements we have outlined." Id., at 51-52. State law may provide relief beyond the demands of federal due process, id., at 52, n. 36, but under no circumstances may it confine petitioners to a lesser remedy, see id., at 44-51.
We reverse the judgment of the Supreme Court of Virginia, and we remand the case for further proceedings not inconsistent with this opinion.
I am surprised to see an appeal to stare decisis in today's dissent. In Teague v. Lane, 489 U. S. 288 (1989), JUSTICE O'CONNOR wrote for a plurality that openly rejected settled precedent controlling the scope of retroactivity on collateral review. "This retroactivity determination," the opinion said, "would normally entail application of the Linkletter [v. Walker, 381 U. S. 618 (1965),] standard, but we believe that our approach to retroactivity for cases on collateral review requires modification." Id., at 301. The dissent in Teague was a sort of anticipatory echo of today's dissent, criticizing the plurality for displaying "infidelity to the doctrine of stare decisis," id., at 331 (Brennan, J., dissenting), for "upset[ting] ... our time-honored precedents," id., at 333, for "repudiating our familiar approach without regard for the doctrine of stare decisis," id., at 345, and for failing "so much as [to] mention stare decisis," id., at 333.
Two Perspectives, 1982 S. Ct. Rev. 1; Schaefer, The Control of "Sunbursts": Techniques of Prospective Overruling, 42 N. Y. U. L. Rev. 631 (1967); Mishkin, Forward: The High Court, The Great Writ, and the Due Process of Time and Law, 79 Harv. L. Rev. 56, 58-72 (1965).
ants." Post, at 121. But while it is true that prospectivity was usually employed in the past (during the brief period when it was used in criminal cases) to favor the government, there is no basis for the implicit suggestion that it would usually favor the government in the future. That phenomenon was a consequence, not of the nature of the doctrine, cf. James v. United States, 366 U. S. 213 (1961), but of the historical "accident" that during the period prospectivity was in fashion legal rules favoring the government were more frequently overturned. But more fundamentally, to base a rule of full retroactivity in the criminal-law area upon what the dissent calls "the generalized policy of favoring individual rights over governmental prerogative," post, at 121, makes no more sense than to adopt, because of the same "generalized policy," a similarly gross rule that no decision favoring criminal defendants can ever be overruled. The law is more discerning than that. The dissent's next argument is based on the dubious empirical assumption that civil litigants, but not criminal defendants, will often receive some benefit from a prospective decision. That assumption does not hold even in this case: Prospective invalidation of Virginia's taxing scheme would afford petitioners the enormous future "benefit," ibid., of knowing that others in the State are being taxed more. But empirical problems aside, the dissent does not explain why, if a receipt-of-some-benefit principle is important, we should use such an inaccurate proxy as the civil/criminal distinction, or how this newly discovered principle overcomes the "basic norms of constitutional adjudication" on which Griffith v. Kentucky, 479 U. S. 314, 322 (1987), rested. Finally, the dissent's "equal treatment" argument ably distinguishes between cases in which a prospectivity claim is properly raised, and those in which it is not. See post, at 122. But that does nothing to distinguish between civil and criminal cases; obviously, a party may procedurally default on a claim in either context.
109 U. Pa. L. Rev. 1 (1960). Thus, the dissent is saying, in effect, that stare decisis demands the preservation of methods of destroying stare decisis recently invented in violation of stare decisis.
Contrary to the dissent's assertion that Chevron Oil articulated "our traditional retroactivity analysis," post, at 113, the jurisprudence it reflects "came into being," as Justice Harlan observed, less than 30 years ago with Linkletter v. Walker, 381 U. S. 618 (1965). Mackey, supra, at 676. It is so unancient that one of the current Members of this Court was sitting when it was invented. The true traditional view is that prospective decisionmaking is quite incompatible with the judicial power, and that courts have no authority to engage in the practice. See ante, at 94; James B. Beam Distilling Co. v. Georgia, 501 U. S. 529, 534 (1991) (opinion of SOUTER, J.); American Trucking Assns., Inc. v. Smith, 496 U. S. 167, 201 (1990) (SCALIA, J., concurring in judgment); Desist, supra, at 258-259 (Harlan, J., dissenting); Great Northern R. Co. v. Sunburst Oil & Refining Co., 287 U. S. 358, 365 (1932). Linkletter itself recognized that "[a]t common law there was no authority for the proposition that judicial decisions made law only for the future." 381 U. S., at 622-623. And before Linkletter, the academic proponents of prospective judicial decisionmaking acknowledged that their proposal contradicted traditional practice. See, e. g., Levy, supra, at 2, and n. 2; Carpenter, Court Decisions and the Common Law, 17 Colum. L. Rev. 593, 594 (1917). Indeed, the roots of the contrary tradition are so deep that Justice Holmes was prepared to hazard the guess that "[j]udicial decisions have had retrospective operation for near a thousand years." Kuhn v. Fairmont Coal Co., 215 U. S. 349, 372 (1910) (dissenting opinion).
stitutional tradition. It would have struck John Marshall as an extraordinary assertion of raw power. The conception of the judicial role that he possessed, and that was shared by succeeding generations of American judges until very recent times, took it to be "the province and duty of the judicial department to say what the law is," Marbury v. Madison, 1 Cranch 137, 177 (1803) (emphasis added)-not what the law shall be. That original and enduring American perception of the judicial role sprang not from the philosophy of Nietzsche but from the jurisprudence of Blackstone, which viewed retroactivity as an inherent characteristic of the judicial power, a power "not delegated to pronounce a new law, but to maintain and expound the old one." 1 W. Blackstone, Commentaries 69 (1765). Even when a "former determination is most evidently contrary to reason ... [or] contrary to the divine law," a judge overruling that decision would "not pretend to make a new law, but to vindicate the old one from misrepresentation." Id., at 69-70. "For if it be found that the former decision is manifestly absurd or unjust, it is declared, not that such a sentence was bad law, but that it was not law." Id., at 70 (emphases in original). Fully retroactive decisionmaking was considered a principal distinction between the judicial and the legislative power: "[I]t is said that that which distinguishes a judicial from a legislative act is, that the one is a determination of what the existing law is in relation to some existing thing already done or happened, while the other is a predetermination of what the law shall be for the regulation of all future cases." T. Cooley, Constitutional Limitations *91. The critics of the traditional rule of full retroactivity were well aware that it was grounded in what one of them contemptuously called "another fiction known as the Separation of powers." Kocourek, Retrospective Decisions and Stare Decisis and a Proposal, 17 A. B. A. J. 180, 181 (1931).
gard for stare decisis. In the eyes of its enemies, the doctrine "smack[ed] of the legislative process," Mishkin, 79 Harv. L. Rev., at 65, "encroach[ed] on the prerogatives of the legislative department of government," Von Moschzisker, Stare Decisis in Courts of Last Resort, 37 Harv. L. Rev. 409, 428 (1924), removed "one of the great inherent restraints upon this Court's depart[ing] from the field of interpretation to enter that of lawmaking," James v. United States, 366 U. S. 213, 225 (1961) (Black, J., concurring in part and dissenting in part), caused the Court's behavior to become "assimilated to that of a legislature," Kurland, Toward a Political Supreme Court, 37 U. Chi. L. Rev. 19, 34 (1969), and tended "to cut [the courts] loose from the force of precedent, allowing [them] to restructure artificially those expectations legitimately created by extant law and thereby mitigate the practical force of stare decisis," Mackey, 401 U. S., at 680 (Harlan, J., concurring in judgment). All this was not denied by the doctrine's friends, who also viewed it as a device to "augmen[t] the power of the courts to contribute to the growth of the law in keeping with the demands of society," Mallamud, Prospective Limitation and the Rights of the Accused, 56 Iowa L. Rev. 321, 359 (1970), as "a deliberate and conscious technique of judicial lawmaking," Levy, 109 U. Pa. L. Rev., at 6, as a means of "facilitating more effective and defensible judicial lawmaking," id., at 28.
2 Contrary to the suggestion in the dissent, I am not arguing that we should "cast overboard our entire retroactivity doctrine with ... [an] unceremonious heave-ho." Post, at 116 (emphasis added; internal quotation marks omitted). There is no need. We cast over the first half six Terms ago in Griffith, and deep-sixed most of the rest two Terms ago in James B. Beam Distilling Co. v. Georgia, 501 U. S. 529 (1991)-in neither case unceremoniously (in marked contrast to some of the overrulings cited in text). What little, if any, remains is teetering at the end of the plank and needs no more than a gentle nudge. But if the entire doctrine had been given a quick and unceremonious end, there could be no complaint on the grounds of stare decisis; as it was born, so should it die. I do not know the basis for the dissent's contention that I find the jurisprudence of the era that produced the doctrine of prospectivity "distasteful." Post, at 116. Much of it is quite appetizing. It is only the cavalier treatment of stare decisis and the invention of prospectivity that I have criticized here.
by our flexible rule of stare decisis; and because no friend of stare decisis would want it to be.
JUSTICE KENNEDY, with whom JUSTICE WHITE joins, concurring in part and concurring in the judgment.
I remain of the view that it is sometimes appropriate in the civil context to give only prospective application to a judicial decision. "[P]rospective overruling allows courts to respect the principle of stare decisis even when they are impelled to change the law in light of new understanding." American Trucking Assns., Inc. v. Smith, 496 U. S. 167, 197 (1990) (plurality opinion). When a court promulgates a new rule of law, prospective application functions "to avoid injustice or hardship to civil litigants who have justifiably relied on prior law." Id., at 199 (internal quotation marks omitted). See Phoenix v. Kolodziejski, 399 U. S. 204, 213-215 (1970); Cipriano v. City of Houma, 395 U. S. 701, 706 (1969) (per curiam); England v. Louisiana Bd. of Medical Examiners, 375 U. S. 411, 422 (1964). And in my view retroactivity in civil cases continues to be governed by the standard announced in Chevron Oil Co. v. Huson, 404 U. S. 97,106-107 (1971). Thus, for the reasons explained by JUSTICE O'CONNOR, post, at 113-117, I cannot agree with the Court's broad dicta, ante, at 95-97, that appears to embrace in the civil context the retroactivity principles adopted for criminal cases in Griffith v. Kentucky, 479 U. S. 314 (1987). As JusTICE O'CONNOR has demonstrated elsewhere, the differences between the civil and criminal contexts counsel strongly against adoption of Griffith for civil cases. See American Trucking Assns., Inc. v. Smith, supra, at 197-199. I also cannot accept the Court's conclusion, ante, at 96-99, which is based on JUSTICE SOUTER'S opinion in James B. Beam Distilling Co. v. Georgia, 501 U. S. 529, 540-543 (1991), that a decision of this Court must be applied in a retroactive manner simply because the rule of law there announced happened to be applied to the parties then before the Court.
See post, at 117-122 (O'CONNOR, J., dissenting); James B. Beam Distilling Co. v. Georgia, supra, at 550-552 (O'CONNOR, J., dissenting). For these reasons, I do not join Part II of the Court's opinion.
I nonetheless agree with the Court that Davis v. Michigan Dept. of Treasury, 489 U. S. 803 (1989), must be given retroactive effect. The first condition for prospective application of any decision is that it must announce a new rule of law. Ashland Oil, Inc. v. Caryl, 497 U. S. 916, 918 (1990) (per curiam); American Trucking Assns., Inc. v. Smith, supra, at 179; United States v. Johnson, 457 U. S. 537, 550, n. 12 (1982); Chevron Oil Co. v. Huson, 404 U. S., at 106-107. The decision must "overrul[e] clear past precedent on which litigants may have relied" or "decid[e] an issue of first impression whose resolution was not clearly foreshadowed." Id., at 106. Because Davis did neither, it did not announce new law and therefore must be applied in a retroactive manner.
Respondent argues that two new principles of law were established in Davis. First, it points to the holding that 4 U. S. C. § 111, in which the United States consents to state taxation of the compensation of "an officer or employee of the United States," applies to federal retirees as well as current federal employees. Brief for Respondent 16-18. See Davis, 489 U. S., at 808-810. In Davis, however, we indicated that this holding was "dictate[d]" by "the plain language of the statute," id., at 808, and we added for good measure our view that the language of the statute was "unambiguous," "unmistakable," and "leaves no room for doubt," id., at 809, n. 3, 810. Given these characterizations, it is quite implausible to contend that in this regard Davis decided "an issue of first impression whose resolution was not clearly foreshadowed." Chevron Oil, supra, at 106.
ployees. Brief for Respondent 18-26. See Davis, supra, at 814,815, n. 4. The Davis Court, however, anchored its decision in precedent. We observed that in Phillips Chemical Co. v. Dumas Independent School Dist., 361 U. S. 376 (1960), "we faced thee] precise situation" confronting us in Davis, and so Phillips Chemical controlled our holding. 489 U. S., at 815, n. 4. To be sure, JUSTICE STEVENS in dissent disagreed with these contentions and attempted to distinguish Phillips Chemical. 489 U. S., at 824-826. The Court, however, was not persuaded at the time, and I remain convinced that the Court had the better reading of Phillips Chemical. A contrary holding in Davis, in my view, would have created a clear inconsistency in our jurisprudence. Under Chevron Oil, application of precedent which directly controls is not the stuff of which new law is made.
Far from being "revolutionary," Ashland Oil Co. v. Caryl, supra, at 920, or "an avulsive change which caused the current of the law thereafter to flow between new banks," Hanover Shoe, Inc. v. United Shoe Machinery Co., 392 U. S. 481, 499 (1968), Davis was a mere application of plain statutory language and existing precedent. In these circumstances, this Court is not free to mitigate any financial hardship that might befall Virginia's taxpayers as a result of their state government's failure to reach a correct understanding of the unambiguous dictates of federal law.
Because I do not believe that Davis v. Michigan Dept. of Treasury, supra, announced a new principle of law, I have no occasion to consider JUSTICE O'CONNOR'S argument, post, at 131-136, that equitable considerations may inform the formulation of remedies when a new rule is announced. In any event, I do not read Part III of the Court's opinion as saying anything inconsistent with what JUSTICE O'CONNOR proposes.
On this understanding, I join Parts I and III of the Court's opinion and concur in its judgment.
Today the Court applies a new rule of retroactivity to impose crushing and unnecessary liability on the States, precisely at a time when they can least afford it. Were the Court's decision the product of statutory or constitutional command, I would have no choice but to join it. But nothing in the Constitution or statute requires us to adopt the retroactivity rule the majority now applies. In fact, longstanding precedent requires the opposite result. Because I see no reason to abandon our traditional retroactivity analysis as articulated in Chevron Oil Co. v. Huson, 404 U. S. 97, 106107 (1971), and because I believe the Supreme Court of Virginia correctly applied Chevron Oil in this case, I would affirm the judgment below.
This Court's retroactivity jurisprudence has become somewhat chaotic in recent years. Three Terms ago, the case of American Trucking Assns., Inc. v. Smith, 496 U. S. 167 (1990), produced three opinions, none of which garnered a majority. One Term later, James B. Beam Distilling Co. v. Georgia, 501 U. S. 529 (1991), yielded five opinions; there, no single writing carried more than three votes. As a result, the Court today finds itself confronted with such disarray that, rather than relying on precedent, it must resort to vote counting: Examining the various opinions in Jim Beam, it discerns six votes for a single proposition that, in its view, controls this case. Ante, at 96-97.
rule, and whether retroactive application would produce injustice. 404 U. S., at 106-107. Even when this Court adjusted the retroactivity rule for criminal cases on direct review some six years ago, we reaffirmed the vitality of Chevron Oil, noting that retroactivity in civil cases "continues to be governed by the standard announced in Chevron Oil Co. v. Huson." Griffith v. Kentucky, 479 U. S. 314, 322, n. 8 (1987). In American Trucking Assns., supra, however, a number of Justices expressed a contrary view, and the jurisprudential equivalent of entropy immediately took over. Whatever the merits of any retroactivity test, it cannot be denied that resolution of the case before us would be simplified greatly had we not disregarded so needlessly our obligation to follow precedent in the first place.
I fear that the Court today, rather than rectifying that confusion, reinforces it still more. In the usual case, of course, retroactivity is not an issue; the courts simply apply their best understanding of current law in resolving each case that comes before them. James B. Beam, 501 U. S., at 534, 535-536 (SOUTER, J.). But where the law changes in some respect, the courts sometimes may elect not to apply the new law; instead, they apply the law that governed when the events giving rise to the suit took place, especially where the change in law is abrupt and the parties may have relied on the prior law. See id., at 534. This can be done in one of two ways. First, a court may choose to make the decision purely prospective, refusing to apply it not only to the parties before the court but also to any case where the relevant facts predate the decision. Id., at 536. Second, a court may apply the rule to some but not all cases where the operative events occurred before the court's decision, depending on the equities. See id., at 537. The first option is called "pure prospectivity" and the second "selective prospectivity."
opinion in that case, one can derive from that case the proposition the Court announces today: Once "this Court applies a rule of federal law to the parties before it, that rule ... must be given full retroactive effect in all cases still open on direct review." Ante, at 97. But no decision of this Court forecloses the possibility of pure prospectivity-refusal to apply a new rule in the very case in which it is announced and every case thereafter. As JUSTICE WHITE explained in his concurrence in James B. Beam, "[t]he propriety of prospective application of decision in this Court, in both constitutional and statutory cases, is settled by our prior decisions." 501 U. S., at 546 (opinion concurring in judgment).
"[W]hen the Court changes its mind, the law changes with it. If the Court decides, in the context of a civil case or controversy, to change the law, it must make [a] determination whether the new law or the old is to apply to conduct occurring before the law-changing decision. Chevron Oil describes our long-established procedure for making this inquiry." James B. Beam, supra, at 550 (O'CONNOR, J., dissenting) (internal quotation marks omitted).
u. S., at 106-107; Phoenix v. Kolodziejski, 399 U. S. 204, 214 (1970); Cipriano v. City of Houma, 395 U. S. 701, 706 (1969); see also American Trucking Assns., 496 U. S., at 188-200 (plurality opinion) (canvassing the Court's retroactivity jurisprudence); ante, at 110 (KENNEDY, J., concurring in part and concurring in judgment) (citing cases).
In any event, the question of pure prospectivity is not implicated here. The majority first holds that once a rule has been applied retroactively, the rule must be applied retroactively to all cases thereafter. Ante, at 97. Then it holds that Davis v. Michigan Dept. of Treasury, 489 U. S. 803 (1989), in fact retroactively applied the rule it announced. Ante, at 98-99. Under the majority's approach, that should end the matter: Because the Court applied the rule retroactively in Davis, it must do so here as well. Accordingly, there is no reason for the Court's careless dictum regarding pure prospectivity, much less dictum that is contrary to clear precedent.
a new pronouncement of law." Griffin v. Illinois, 351 U. S. 12, 26 (1956) (opinion concurring in judgment).
I dissented in James B. Beam because I believed that the absolute prohibition on selective prospectivity was not only contrary to precedent, but also so rigid that it produced unconscionable results. I would have adhered to the traditional equitable balancing test of Chevron Oil as the appropriate method of deciding the retroactivity question in individual cases. But even if one believes the prohibition on selective prospectivity desirable, it seems to me that the Court today takes that judgment to an illogical-and inequitable-extreme. It is one thing to say that, where we have considered prospectivity in a prior case and rejected it, we must reject it in every case thereafter. But it is quite another to hold that, because we did not consider the possibility of prospectivity in a prior case and instead applied a rule retroactively through inadvertence, we are foreclosed from considering the issue forever thereafter. Such a rule is both contrary to established precedent and at odds with any notion of fairness or sound decisional practice. Yet that is precisely the rule the Court appears to adopt today. Ante, at 96-97.
these circumstances, see Brief for Appellee 63, to the extent appellant has paid taxes pursuant to this invalid tax scheme, he is entitled to a refund." Id., at 817 (quoted in part, ante, at 98). According to the majority, that sentence constitutes "'consideration of remedial issues'" and therefore "'necessarily'" indicates that we applied the rule in Davis retroactively to the parties before us. Ante, at 98 (quoting James B. Beam, supra, at 539 (opinion of SOUTER, J.)). Ironically, respondent and its amici draw precisely the opposite conclusion from the same sentence. According to them, the fact that Michigan conceded that it would offer relief meant that we had no reason to decide the question of retroactivity in Davis. Michigan was willing to provide relief whether or not relief was required. The Court simply accepted that offer and preserved the retroactivity question for another day.
how one reads the solitary sentence upon which the Court relies, surely it does not "squarely address" the question of retroactivity; it does not even mention retroactivity. At best, by addressing the question of remedies, the sentence implicitly "assumes" the rule in Davis to be retroactive. Our decision in Brecht, however, makes it quite clear that unexamined assumptions do not bind this Court. Brecht, supra, at 631 (That the Court "assumed the applicability of" a rule does not bind the Court to the assumption).
In fact, there is far less reason to consider ourselves bound by precedent today than there was in Brecht. In Brecht, the issue was not whether a legal question was resolved by a single case; it was whether our consistent practice of applying a particular rule, Chapman v. California, 386 U. S. 18, 24 (1967), to cases on collateral review precluded us from limiting the rule's application to cases on direct review. Because none of our prior cases directly had addressed the applicability of Chapman to cases on collateral review-each had only assumed it applied-the Court held that those cases did not bind us to any particular result. See Brecht, supra, at 630-631. I see no reason why a single retroactive application of the Davis rule, inferred from the sparse and ambiguous language of Davis itself, should carry more weight here than our consistent practice did in Brecht.
Court now permanently binds itself to its every unexamined assumption or inattention. Any rule that creates a grave risk that we might resolve important issues of national concern sub silentio, without thought or consideration, cannot be a wise one.
"[COURT]: So why do we have to answer that at all? "[MICHIGAN]: -if, if this Court issues an opinion stating that the current Michigan classification is unconstitutional or in violation of the statute, there are these 24,000 taxpayers out there.
"[COURT]: But that's not-it's not here, is it? Is that question here?
"[MICHIGAN]: It is not specifically raised, no." Tr. of Oral Arg., O. T. 1988, No. 87-1020, pp. 37-38.
Now, however, the Court holds that the question was implicitly before us and that, even though the Davis opinion does not even discuss the question of retroactivity, it resolved the issue conclusively and irretrievably.
cept the notion that Davis resolved the question of retroactivity. Instead, JUSTICE KENNEDY applies the analysis of Chevron Oil to resolve the retroactivity question today. See ante, at 110-112 (opinion concurring in part and concurring in judgment).
The Court's decision today cannot be justified by comparison to our decision in Griffith v. Kentucky, 479 U. S. 314 (1987), which abandoned selective prospectivity in the criminal context. Ante, at 97. As I explained in American Trucking Assns., 496 U. S., at 197-200, there are significant differences between criminal and civil cases that weigh against such an extension. First, nonretroactivity in criminal cases historically has favored the government's reliance interests over the rights of criminal defendants. As a result, the generalized policy of favoring individual rights over governmental prerogative can justify the elimination of prospectivity in the criminal arena. The same rationale cannot apply in civil cases, as nonretroactivity in the civil context does not necessarily favor plaintiffs or defendants; "nor is there any policy reason for protecting one class of litigants over another." Id., at 198. More important, even a party to civil litigation who is "deprived of the full retroactive benefit of a new decision may receive some relief." Id., at 198199. Here, for example, petitioners received the benefit of prospective invalidation of Virginia's taxing scheme. From this moment forward, they will be treated on an equal basis with all other retirees, the very treatment our intergovernmental immunity cases require. The criminal defendant, in contrast, is usually interested only in one remedy-reversal of his conviction. That remedy can be obtained only if the rule is applied retroactively. See id., at 199.
be that there is little difference between the criminal defendant in whose case a decision is announced and the defendant who seeks certiorari on the same question two days later. But in this case there is a tremendous difference between the defendant in whose case the Davis rule was announced and the defendant who appears before us today: The latter litigated and preserved the retroactivity question while the former did not. The Michigan Department of Taxation did not even brief the question of retroactivity in Davis. Respondent, in contrast, actually prevailed on the question in the court below.
If the Court is concerned with equal treatment, that difference should be dispositive. Having failed to demand the unusual, prospectivity, respondent in Davis got the usualnamely, retroactivity. Respondent in this case has asked for the unusual. In fact, respondent here defends a judgment below that awarded it just that. I do not see how the principles of equality can support forcing the Commonwealth of Virginia to bear the harsh consequences of retroactivity simply because, years ago, the Michigan Department of Taxation failed to press the issue-and we neglected to consider it. Instead, the principles of fairness favor addressing the contentions the Virginia Department of Taxation presses before us by applying Chevron Oil today. It is therefore to Chevron Oil that I now turn.
Under Chevron Oil, whether a decision of this Court will be applied nonretroactively depends on three factors. First, as a threshold matter, "the decision to be applied nonretroactively must establish a new principle of law." 404 U. S., at 106. Second, nonretroactivity must not retard the new rule's operation in light of its history, purpose, and effect. Id., at 107. Third, nonretroactivity must be necessary to avoid the substantial injustice and hardship that a holding of retroactivity might impose. Ibid. In my view, all three factors favor holding our decision in Davis nonretroactive.
As JUSTICE KENNEDY points out in his concurrence, ante, at 111, a decision cannot be made nonretroactive unless it announces "a new principle of law." Chevron Oil, 404 U. S., at 106. For purposes of civil retroactivity, Chevron Oil identifies two types of decisions that can be new. First, a decision is new if it overturns "clear past precedent on which litigants may have relied." Ibid.; ante, at 111 (KENNEDY, J., concurring in part and concurring in judgment). I agree with JUSTICE KENNEDY that Davis did not represent such a " 'revolutionary'" or "'avulsive change'" in the law. Ante, at 112 (quoting Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U. S. 481, 499 (1968)).
when aware of reasonable contrary conclusions reached by other courts." Butler v. McKellar, 494 U. S. 407, 415 (1990).
In Butler, we determined that the rule announced in Arizona v. Roberson, 486 U. S. 675 (1988), was "new" for purposes of Teague v. Lane, 489 U. S. 288 (1989), despite Roberson's repeated assertions that its rule was "directly controlled" by precedent. Indeed, we did not even feel bound by the opinion's statement that it was not announcing a new rule at all but rather declining to create an exception to an existing rule. While Teague and its progeny may not provide the appropriate standard of novelty for Chevron Oil purposes, their teaching-that whether an opinion is new depends not on its language or tone but on the legal landscape from which it arose-obtains nonetheless.
In fact, before Davis was announced, conventional wisdom seemed to be directly to the contrary. One would think that, if Davis was "clearly foreshadowed," some taxpayer might have made the intergovernmental immunity argument before. No one had. Twenty-three States had taxation schemes just like the one at issue in Davis; and some of those schemes were established as much as half a century before Davis was decided. See Harper v. Virginia Dept. of Taxation, 241 Va. 232, 237, 401 S. E. 2d 868, 871 (1991). Yet not a single taxpayer ever challenged one of those schemes on intergovernmental immunity grounds until Davis challenged Michigan's in 1984. If Justice Holmes is correct that "[t]he prophecies of what the courts will do in fact, and nothing more pretentious" are "law," O. Holmes, The Path of the Law, in Collected Legal Papers 167, 173 (1920), then surely Davis announced new law; the universal "prophecy" before Davis seemed to be that such taxation schemes were valid.
suIt in [Davis itself]"; "how the intergovernmental tax immunity doctrine and 4 U. S. C. § 111 applied to [plans like the one at issue in Davis] was anything but clearly established prior to Davis"); Harper v. Virginia Dept. of Taxation, 241 Va. 232, 238, 401 S. E. 2d 868, 872 (1991) ("[T]he Davis decision established a new rule of law by deciding an issue of first impression whose resolution was not clearly foreshadowed"); Swanson v. State, 329 N. C. 576, 583, 407 S. E. 2d 791, 794 (1991) ("[T]he decision of Davis was not clearly foreshadowed"); Bass v. State, 302 S. C. 250, 256, 395 S. E. 2d 171, 174 (1990) (Davis "established a new principle of law"); Bohn v. Waddell, 164 Ariz. 74, 92, 790 P. 2d 772, 790 (1990) (Davis "established a new principle of law"); Note, Rejection of the "Similarly Situated Taxpayer" Rationale: Davis v. Michigan Department of Treasury, 43 Tax Lawyer 431, 441 (1990) ("The majority in Davis rejected a long-standing doctrine").
those who do business with it. The income tax at issue in Davis, however, did not appear discriminatory on its face. Like the Virginia income tax at issue here, it did not single out federal employees or retirees for disfavored treatment. Instead, federal retirees were treated identically to all other retirees, with a single and numerically insignificant exception-retirees whose retirement benefits were paid by the State. Whether such an exception rendered the tax "discriminatory" within the meaning of the intergovernmental immunity doctrine, it seems to me, was an open question. On the one hand, the tax scheme did distinguish between federal retirees and state retirees: The former were required to pay state taxes on their retirement income, while the latter were not. But it was far from clear that such was the proper comparison. In fact, there were strong arguments that it was not.
As JUSTICE STEVENS explained more thoroughly in his Davis dissent, 489 U. S., at 819-and as we have recognized since McCulloch v. Maryland, 4 Wheat. 316 (1819)-intergovernmental immunity is necessary to prevent the States from interfering with federal interests through taxation. Because the National Government has no recourse to the state ballot box, it has only a limited ability to protect itself against excessive state taxes. But the risk of excessive taxation of federal interests is eliminated, and "[a] 'political check' is provided, when a state tax falls" not only on the Federal Government, but also "on a significant group of state citizens who can be counted upon to use their votes to keep the State from raising the tax excessively, and thus placing an unfair burden on the Federal Government." Washington v. United States, 460 U. S. 536, 545 (1983) (emphasis added). Accord, United States v. County of Fresno, 429 U. S. 452, 462-464 (1977); South Carolina v. Baker, 485 U. S. 505, 526, n. 15 (1988).
Virginia provided that necessary "political check." They exempted only a small group of citizens, state retirees, while subjecting the remainder of their citizens-federal retirees, retirees who receive income from private sources, and nonretirees alike-to a uniform income tax. As a result, any attempt to increase income taxes excessively so as to interfere with federal interests would have caused the similarly taxed populace to "use their votes" to protect their interests, thereby protecting the interests of the Federal Government as well. There being no risk of abusive taxation of the National Government, there was a good argument that there should have been no intergovernmental immunity problem either. See Davis, 489 U. S., at 821-824 (STEVENS, J., dissenting).
In addition, distinguishing between taxation of state retirees and all others, including private and federal retirees, was justifiable from an economic standpoint. The State, after all, does not merely collect taxes from its retirees; it pays their benefits as well. As a result, it makes no difference to the State or the retirees whether the State increases state retirement benefits in an amount sufficient to cover taxes it imposes, or whether the State offers reduced benefits and makes them tax free. The net income level of the retirees and the impact on the state fisc is the same. Thus, the Michigan Department of Taxation had a good argument that its differential treatment of state and federal retirees was "directly related to, and justified by, [a] significant differenc[e] between the two classes," id., at 816 (internal quotation marks omitted): Taxing federal retirees enhances the State's fisc, whereas taxing state retirees does not.
curring in judgment). But surely that cannot be dispositive. Few decisions are so novel that there is no precedent to which they may be moored. What is determinative is that the decision was "sufficiently debatable" ex ante that, under Chevron Oil, nonretroactivity cannot be precluded. Arizona Governing Committee v. Norris, 463 U. S., at 1109 (O'CONNOR, J., concurring). That, it seems to me, is the case here.
"[T]he purpose of the immunity was not to confer benefits on the employees by relieving them from contributing their share of the financial support of the other government ... , but to prevent undue interference with the one government by imposing on it the tax burdens of the other." Graves v. New York ex rel. O'Keefe, 306 U. S. 466, 483-484 (1939) (footnote omitted).
ernmental immunity was meant to protect-the Federal Government's-denying Davis retroactive application would not undermine the decision's purpose or effect.
The final factor under Chevron Oil is whether the decision " 'could produce substantial inequitable results if applied retroactively.'" Chevron Oil, supra, at 107 (quoting Cipriano v. City of Houma, 395 U. S., at 706). We repeatedly have declined to give our decisions retroactive effect where doing so would be unjust. In Arizona Governing Committee v. Norris, supra, for example, we declined to apply a Title VII decision retroactively, noting that the resulting "unanticipated financial burdens would come at a time when many States and local governments are struggling to meet substantial fiscal deficits." Id., at 1106-1107 (Powell, J., joined by Burger, C. J., BLACKMUN, REHNQUIST, and O'CONNOR, JJ.). There was "no justification" for "impos[ing] this magnitude of burden retroactively on the public," we concluded. Id., at 1107. Accord, id., at 1107-1111 (O'CONNOR, J., concurring); see id., at 1075 (per curiam). Similarly, we declined to afford the plaintiff full retroactive relief in Los Angeles Dept. of Water and Power v. Manhart, 435 U. S. 702, 718-723 (1978) (STEVENS, J.). There, too, we explained that "[r]etroactive liability could be devastating" and that "[t]he harm would fall in large part on innocent third parties." Id., at 722-723.
[S]tates," one commentator has noted, "are truly staggering." Hellerstein, Preliminary Reflections on McKesson and American Trucking Associations, 48 Tax Notes 325, 336 (1990). The States estimate that their total liability will exceed $1.8 billion. Brief for Respondent SA-l; Brief for State of Utah et al. as Amici Curiae 12-13. Virginia's share alone exceeds $440 million. Brief for Respondent SA-l; Brief for State of Utah et al. as Amici Curiae 12-13. This massive liability could not come at a worse time. See Wall Street Journal, July 27, 1992, p. A2 ("Most states are in dire fiscal straits, and their deteriorating tax base is making it harder for them to get out, a survey of legislatures indicates"). Accord, Harper v. Virginia Dept. of Taxation, 241 Va., at 239-240, 401 S. E. 2d, at 873 (such massive liability "would have a potentially disruptive and destructive impact on the Commonwealth's planning, budgeting, and delivery of essential state services"); Swanson v. State, 329 N. C. 576, 583, 407 S. E. 2d 791, 794 (1991) ("this State is in dire financial straits" and $140 million in refunds would exacerbate it); Bass v. State, 302 S. C. 250, 256, 395 S. E. 2d 171, 174 (1990) ($200 million in refunds "would impose a severe financial burden on the State and its citizens [and] endanger the financial integrity of the State"). To impose such liability on Virginia and the other States that relied in good faith on their taxation laws, "at a time when most States are struggling to fund even the most basic services, is the height of unfairness." James B. Beam, 501 U. S., at 558 (O'CONNOR, J., dissenting).
It cannot be contended that such a burden is justified by the States' conduct, for the liability is entirely disproportionate to the offense. We do not deal with a State that willfully violated the Constitution but rather one that acted entirely in good faith on the basis of an unchallenged statute. Moreover, during the four years in question, the constitutional violation produced a benefit of approximately $8 million to $12 million per year, Tr. of Oral Arg. 33, 36, and that benefit accrued not to the Commonwealth but to individual retirees.
Yet, for that $32 million to $48 million error, the Court now allows the imposition of liability well in excess of $400 million dollars. Such liability is more than just disproportionate; it is unconscionable. Finally and perhaps most important, this burden will not fall on some thoughtless government official or even the group of retirees that benefited from the offending exemption. Instead the burden falls squarely on the backs of the blameless and unexpecting taxpayers of the affected States who, although they profited not at all from the exemption, will now be forced to pay higher taxes and be deprived of essential services.
Petitioners, in contrast, would suffer no hardship if the Court refused to apply Davis retroactively. For years, 23 States enforced taxation schemes like the Commonwealth's in good faith, and for years not a single taxpayer objected on intergovernmental immunity grounds. No one put the States on notice that their taxing schemes might be constitutionally suspect. Denying Davis retroactive relief thus would not deny petitioners a benefit on which they had relied. It merely would deny them an unanticipated windfall. Because that windfall would come only at the cost of imposing hurtful consequences on innocent taxpayers and the communities in which they live, I believe the substantial inequity of imposing retroactive relief in this case, like the other Chevron factors, weighs in favor of denying Davis retroactive application.
should apply the old rule or the new one." When the retroactivity of a decision of this Court is in issue, the choice-oflaw issue is a federal question. Ashland Oil, Inc. v. Caryl, 497 U. S. 916, 918 (1990) (per curiam).
The question of remedy, however, is quite different. The issue is not whether to apply new law or old law, but what relief should be afforded once the prevailing party has been determined under applicable law. See James B. Beam, 501 U. S., at 535 (SOUTER, J.) ("Once a rule is found to apply 'backward,' there may then be a further issue of remedies, i. e., whether the party prevailing under a new rule should obtain the same relief that would have been awarded if the rule had been an old one"). The question of remedies is in the first instance a question of state law. See ibid. ("[T]he remedial inquiry is one governed by state law, at least where the case originates in state court"). In fact, the only federal question regarding remedies is whether the relief afforded is sufficient to comply with the requirements of due process. See McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, Fla. Dept. of Business Regulation, 496 U. S. 18, 31-52 (1990).
While the issue of retroactivity is properly before us, the question of remedies is not. It does not appear to be within the question presented, which asks only if Davis may be applied "nonretroactively so as to defeat federal retirees' entitlement to refunds." Pet. for Cert. i. Moreover, our consideration of the question at this juncture would be inappropriate, as the Supreme Court of Virginia has yet to consider what remedy might be available in light of Davis' retroactivity and applicable state law. The Court inexplicably discusses the question at length nonetheless, noting that if the Commonwealth of Virginia provides adequate predeprivation remedies, it is under no obligation to provide full retroactive refunds today. Ante, at 100-102.
inadvertently suggesting constitutional absolutes that do not exist. The Court's dictum today follows that course. Amidst its discussion of predeprivation and postdeprivation remedies, the Court asserts that a plaintiff who has been deprived a predeprivation remedy cannot be "confine[d] ... to prospective relief." Ante, at 101, n. 10. I do not believe the Court's assertion to be correct.
"To the extent that equitable considerations, for example, 'reliance,' are relevant, I would take this into account in the determination of what relief is appropriate in any given case. There are, of course, circumstances when a change in the law will jeopardize an edifice which was reasonably constructed on the foundation of prevailing legal doctrine." United States v. Estate of Donnelly, 397 U. S. 286, 296 (1970) (concurring opinion).
The commentators appear to be in accord. See Fallon & Meltzer, New Law, Non-Retroactivity, and Constitutional Remedies, 104 Harv. L. Rev. 1733 (1991) (urging consideration of novelty and hardship as part of the remedial framework rather than as a question of whether to apply old law or new). In my view, and in light of the Court's revisions to the law of retroactivity, it should be constitutionally permissible for the equities to inform the remedial inquiry. In a particularly compelling case, then, the equities might permit a State to deny taxpayers a full refund despite having refused them predeprivation process.
tary relief. In JUSTICE STEVENS' view, however, Chevron Oil determined the question of remedy rather than which law would apply, new or old. See 496 U. S., at 220 (Chevron Oil and its progeny "establish a remedial principle for the exercise of equitable discretion by federal courts and not, as the plurality states, a choice-of-Iaw principle applicable to all cases on direct review"); see also ante, at 95, n. 9 (reserving the possibility that Chevron Oil governs the question of remedies in federal court). If JUSTICE STEVENS' view or something like it has prevailed today-and it seems that it has-then state and federal courts still retain the ability to exercise their "equitable discretion" in formulating appropriate relief on a federal claim. After all, it would be wholly anomalous to suggest that federal courts are permitted to determine the scope of the remedy by reference to Chevron Oil, but that state courts are barred from considering the equities altogether. Not only would that unduly restrict state court "flexibility in the law of remedies," Estate of Donnelly, supra, at 297 (Harlan, J., concurring), but it also would turn federalism on its head. I know of no principle of law that permits us to restrict the remedial discretion of state courts without imposing similar restrictions on federal courts. Quite the opposite should be true, as the question of remedies in state court is generally a question of state law in the first instance. James B. Beam, 501 U. S., at 535 (SOUTER, J.).
son did not deal" (emphases added)). Accord, id., at 543 ("[NJothing we say here precludes consideration of individual equities when deciding remedial issues in particular cases"). It is true that the Court in McKesson rejected, on due process grounds, the State of Florida's equitable arguments against the requirement of a full refund. But the opinion did not hold that those arguments were irrelevant as a categorical matter. It simply held that the equities in that case were insufficient to support the decision to withhold a remedy. The opinion expressly so states, rejecting the State's equitable arguments as insufficiently "weighty in these circumstances." McKesson, 496 U. S., at 45 (emphasis added).
The circumstances in McKesson were quite different than those here. In McKesson, the tax imposed was patently unconstitutional: The State of Florida collected taxes under its Liquor Tax statute even though this Court already had invalidated a "virtually identical" tax. Id., at 46. Given that the State could "hardly claim surprise" that its statute was declared invalid, this Court concluded that the State's reliance on the presumptive validity of its statute was insufficient to preclude monetary relief. Ibid. As we explained in American Trucking Assns., the large burden of retroactive relief is "largely irrelevant when a State violates constitutional norms well established under existing precedent." We cited McKesson as an example. 496 U. S., at 183 (plurality opinion).
require a full, backwards-looking compensatory remedy whenever a governmental official reasonably taxes a citizen under what later turns out to be an unconstitutional statute but not where the officer deprives a citizen of her bodily integrity or her life.
In my view, if the Court is going to restrict authority to temper hardship by holding our decisions nonretroactive through the Chevron Oil factors, it must afford courts the ability to avoid injustice by taking equity into account when formulating the remedy for violations of novel constitutional rules. See Fallon & Meltzer, 104 Harv. L. Rev. 1733 (1991). Surely the Constitution permits this Court to refuse plaintiffs full backwards-looking relief under Chevron Oil; we repeatedly have done so in the past. American Trucking Assns., supra, at 188-200 (canvassing the Court's practice); see also supra, at 115-116, 129. I therefore see no reason why it would not similarly permit state courts reasonably to consider the equities in the exercise of their sound remedial discretion.
In my view, the correct approach to the retroactivity question before us was articulated in Chevron Oil some 22 years ago. By refusing to apply Chevron Oil today, the Court not only permits the imposition of grave and gratuitous hardship on the States and their citizens, but also disregards settled precedents central to the fairness and accuracy of our decisional processes. Nor does the Court cast any light on the nature of the regime that will govern from here on. To the contrary, the Court's unnecessary innuendo concerning pure prospectivity and ill-advised dictum regarding remedial issues introduce still greater uncertainty and disorder into this already chaotic area. Because I cannot agree with the Court's decision or the manifestly unjust results it appears to portend, I respectfully dissent.


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Argued: and Submitted Nov. 21, 1924.
Mr. H. E. Spalding, of Detroit, Mich., for appellants.
Missrs. Hal H. Smith and Percy J. Donovan, both of Detroit, Mich., for appellee.
A rule adopted by the commission requires all common carriers, defined by the act, to take out such an indemnity bond; and the commission has announced that no permit will be given until there has been filed with it a certificate of the bonding company showing that such bond had been issued. The act imposed upon every such carrier a fee for the privilege of engaging in the business defined in section 1, and appropriates all fees to the general highway fund. And it prescribes punishment by fine or imprisonment or both for violations of the act or of any lawful order, rule or regulation of the commission.
At the time of the passage of the act, plaintiff had three contracts to transport from Detroit, Mich., to Toledo, Ohio, automobile bodies made at the plants of three manufacturers in Detroit and intended for the use of an automobile manufacturer at Toledo. He had been doing such hauling for some years, and had a large investment in property used exclusively for that purpose. He employed 75 men and operated 47 motor trucks and trailers upon the public highways of Michigan, which formed a part of the route between Detroit and Toledo. He had no other business and did not hold himself out as a carrier for the public. It was shown that defendants intended to enforce the act against him, and that, unless he obtained the permits required, they would cause his vehicles to be stopped on the highways by state police and local officers, and the prescribed penalties to be imposed upon him. Plaintiff alleged that the enforcement of the act would cause him irreparable injury, the loss of his contracts, the destruction of his business, and the loss of a substantial part of his capital investment. He assailed the act as invalid; and, among other things, averred that it contravenes the commerce clause of the Constitution of the United States, that it is repugnant to the due process clause of the Fourteenth Amendment, and that it violates the Constitution of Michigan, because it contains a plurality of objects, and its real object is not expressed in the title. The lower court held that section 7, providing for indemnity bonds imposes a direct burden on interstate commerce, and that the provisions of section 3 applicable to private carriers are foreign to the title of the act and fall under the condemnation of the state Constitution. See opinion of the same judges in Liberty Highway Co. v. Michigan Public Utilities Commission (D. C.) 294 F. 703, 706, 708, decided the same day that the injunction was granted in this case.
Plaintiff is a private carrier. His sole business is interstate commerce, and it is limited to the transportation covered by his three contracts. He has no power of eminent domain or franchise under the state, and no greater right to use the highways than any other member of the body public. He does not undertake to carry for the public and does not devote his property to any public use. He has done nothing to give rise to a duty to carry for others. The public is not dependent on him or the use of his property for service, and has no right to call on him for transportation. The act leaves it to the commission to require plaintiff, if he is to use the highways, to be prepared to furnish adequate service to the public. It would make him a common carrier and subject him to all the duties and burdens of that calling and would require him to furnish bond for the protection of those for whom he hauls.
This court has held that, in the absence of national legislation covering the subject, a state may rightfully prescribe uniform regulations necessary for public safety and order in respect to the operation upon its highways of all motor vehicles those moving in interstate commerce as well as othersthat a reasonable, graduated license fee imposed by a state on motor vehicles used in interstate commerce does not constitute a direct burden on interstate commerce, and that a state which, at its own expense, furnishes special facilities for the use of those engaged in intrastate and interstate commerce may exact compensation therefor, and if the charges are reasonable and uniform, they constitute no burden on interstate commerce. Hendrick v. Maryland, 235 U. S. 610, 622, 35 S. Ct. 140, 59 L. Ed. 385; Kane v. New Jersey, 242 U. S. 160, 167, 37 S. Ct. 30, 61 L. Ed. 222. Such regulations are deemed to be reasonable and to affect interstate commerce only incidentally and indirectly. But it is well settled that a state has no power to fetter the right to carry on interstate commerce within its borders by the imposition of conditions or regulations which are unnecessary and pass beyond the bounds of what is reasonable and suitable for the proper exercise of its powers in the field that belongs to it. Sioux Remedy Co. v. Cope, 235 U. S. 197, 201, 35 S. Ct. 57, 59 L. Ed. 193. One bound to furnish transportation to the public as a common carrier must serve all, up to the capacity of his facilities, without discrimination and for reasonable pay. The act would put on plaintiff the duty to use his trucks and other equipment as a common carrier in Michigan, and would prevent him from using them exclusively to perform his contracts. This is to take from him use of instrumentalities by means of which he carries on the interstate commerce in which he is engaged as a private carrier and so directly to burden and interfere with it. See Kansas Southern Ry. v. Kaw Valley District, 233 U. S. 75, 78, 79, 34 S. Ct. 564, 58 L. Ed. 857; Atlantic Coast Line v. Wharton, 207 U. S. 328, 334, 28 S. Ct. 121, 52 L. Ed. 230; Illinois Central Railroad Co. v. Illinois, 163 U. S. 142, 153, 16 S. Ct. 1096, 41 L. Ed. 107. And it is a burden upon interstate commerce to impose on plaintiff the onerous duties and strict liability of common carrier, and the obligation of furnishing such indemnity bond to cover the automobile bodies hauled under his contracts as conditions precedent to his right to continue to carry them in interstate commerce. See Barrett v. New York, 232 U. S. 14, 33, 34 S. Ct. 203, 58 L. Ed. 483. Clearly, these requirements have no relation to public safety or order in the use of motor vehicles upon the highways, or to the collection of compensation for the use of the highways. The police power does not extend so far. It must be held that, if applied to plaintiff and his business, the act would violate the commerce clause of the Constitution.
Moreover, it is beyond the power of the state by legislative fiat to convert property used exclusively in the business of a private carrier into a public utility, or to make the owner a public carrier, for that would be taking private property for public use without just compensation, which no state can do consistently with the due process of law clause of the Fourteenth Amendment. Producers Transportation Co. v. Railroad Commission, 251 U. S. 228, 230, 40 S. Ct. 131, 64 L. Ed. 239; Wolff Co. v. Industrial Commission, 262 U. S. 522, 535, 42 S. Ct. 630, 67 L. Ed. 1103, 27 A. L. R. 1280. On the facts above referred to, it is clear that, if enforced against him, the act would deprive plaintiff of his property in violation of that clause of the Constitution.
The Supreme Court of Michigan has not decided whether the act contravenes the state Constitution; and as we hold that the enforcement of the act against plaintiff would deprive him of his rights under the federal Constitution, and that therefore the decree must be affirmed, we do not pass on state questions. Pacific Tel. Co. v. Kuykendall, 265 U. S. 196, 204, 44 S. Ct. 553, 68 L. Ed. 975.

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The Supreme Court extended the prohibition that laws of nature, combined with “well-understand, routine [and] conventional” method steps are not patent eligible subject matter under 35 U.S.C. Sec. 101. Mayo Collaborative Serv. v. Prometheus Labs., Inc., Case No. 10-1150 (U.S., March 20, 2012) (available here). The Patent Statute provides: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U. S. C. §101.
The Supreme Court has held that this provision contains an important implicit exceptions on patentable subject matter. “[L]aws of nature, natural phenomena, and abstract ideas” are not patentable. Prometheus Opn. 1; citing Diamond v. Diehr, 450 U. S. 175, 185 (1981); see also Bilski v. Kappos, 561 U. S. ___, ___ (2010) (slip op., at 5); Diamond v. Chakrabarty, 447 U. S. 303, 309 (1980); Le Roy v. Tatham, 14 How. 156, 175 (1853); O’Reilly v. Morse, 15 How. 62, 112–120 (1854).
“Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.” p. 2; Gottschalk v. Benson, 409 U. S. 63, 67 (1972). The exclusion of laws of nature was extended in Parker v. Flook, 437 U.S. 584, 590 (1978) (adjusting alarm limits in catalytic conversion of hydro carbons not patentable subject mater) and Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (mathematical process for converting binary-coded decimal numerals into pure binary numbers). In Bilski, the Court considered claims covering a process for hedging risks of price changes by, for example, contracting to purchase commodities from sellers at a fixed price, reflecting the desire of sellers to hedge against a drop in prices, while selling commodities to consumers at a fixed price, reflecting the desire of consumers to hedge against a price increase. p. 5; Bilski v. Kappos, 561 U.S. – (2010). This hedging risk method was also not patentable subject matter.
Is “Inventive Concept” a New Requirement For Process Patents?
The Court in Prometheus stated that Flook and Benson “insist[ed] that a process that focuses upon the use of a natural law also contain other elements or a combination of elements, sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself.” p. 3, citing O’Reilly v. Morse, 15 How. 62, 112-120 (1854)(Morse’s telegraph case).
“In particular, the steps in the claimed processes (apart from the natural laws themselves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field.” P. 4. “Claim 1, for example, states that if the levels of 6–TG in the blood (of a patient who has taken a dose of a thiopurine drug) exceed about 400 pmol per 8×108 red blood cells, then the administered dose is likely to produce toxic side effects.” P. 8.
“If a law of nature is not patentable, then neither is a process reciting a law of nature, unless that process has additional features that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself. A patent, for example, could not simply recite a law of nature and then add the instruction ‘apply the law.’ P. 8-9.
In the Promotheus case, first, the “administering” step refered to the relevant audience, namely doctors who treat patients with certain diseases with thiopurine drugs. Second, the “wherein” clauses “simply” tell a doctor about the relevant natural laws, at most adding a suggestion that he should take those laws into account when treating his patient. Third, the “determining” step tells the doctor to determine the level of the relevant metabolites in the blood, through whatever process the doctor or the laboratory wishes to use. Fourth, to consider the three steps as an ordered combination “adds nothing” to the laws of nature that is not already present when the steps are considered separately.
“Thus, this step tells doctors to engage in well-understood, routine, conventional activity previously engaged in by scientists who work in the field. Purely ‘conventional or obvious’ ‘[pre]-solution activity’ is normally not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law.” P. 10.
Like Flook, the instructions “add nothing specific to the laws of nature other than what is well-understood, routine, conventional activity, previously engaged in by those in the field. And since they are steps that must be taken in order to apply the laws in question, the effect is simply to tell doctors to apply the law somehow when treating their patients.” “The ‘determining’ step too is set forth in highly general language covering all processes that make use of the correlations after measuring metabolites, including later discovered processes that measure metabolite levels in new ways.” P. 18.
In a cautionary statement, the Court stated “We need not, and do not, now decide whether were the steps at issue here less conventional, these features of the claims would prove sufficient to invalidate them. For here, as we have said, the steps add nothing of significance to the natural laws themselves.” P. 18.
The Supreme Court confirmed that the Bilski, machine or transformation (MOT) test for patentable subject matter, is a useful clue, but stated the MOT test does not trump the law of nature exclusion. P. 19. Also, the Court indicated that the law of nature exclusion under § 101 is independent of the novelty requirements of § 102, non-obvious requirements of § 103 and the requirement to clearly and exactly describe the invention under § 112.
A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising: (a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and (b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder, wherein the level of 6-thioguanine less than about 230 pmol per 8×108 red blood cells indicates a need tincrease the amount of said drug subsequently administered to said subject and wherein the level of 6-thioguanine greater than about 400 pmol per 8×108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject. See U.S.P.N. 6,355,623.
In conclusion, with respect to method or process claims, the transformation of blood chemistry coupled with only a “determining” step, is not patentable statutory subject matter under § 101. Such “chemical transformation” with a “determining step” is now held to fall within the “conventional post solution” category as does issuing an alarm (Flook) or printing or displaying a result. These are “well understood, routine, conventional activity, previously engaged in by those in the field.” P. 13. Further, the sequence of the steps was not unique.


5 June 2018 Authors: Jackson Ho, Ph.D.
The patent at issue, U.S. Patent No. 8,859,623 (“the ‘623 patent”), is directed to a phenylephrine solution used to dilate a patient’s pupils. Phenylephrine exists in two chiral forms, S- and R-phenylephrine hydrochloride, but only the R-form is useful to dilate pupils.  Altaire had been producing substantially pure R-phenylephrine solutions since as early as 2000 . In 2011, Altaire and Paragon Biotek, Inc. (“Paragon”) entered into an agreement to submit a new drug application (“NDA”) for Altaire’s products . According to the agreement, Paragon was to prepare the documents necessary for the filing and Altaire was to provide the chemistry, manufacturing, and controls to support the NDA filing .
After Paragon submitted the NDA, the Food and Drug Administration recommended that Paragon add a chiral purity test to the drug specification. Altaire ran the purity test and provided a summary of the results to Paragon . Afterwards, Paragon filed a patent application directed to a phenylephrine solution with a certain level of chiral purity, which eventually issued as the ‘623 patent, without assigning any rights to Altaire.
In April 2015, Altaire and Paragon had a dispute over their agreement, which resulted in Altaire suing Paragon in U.S. District Court in New York alleging that Paragon breached the nondisclosure clause in the agreement. Paragon responded by alleging that Altaire materially breached the nondisclosure clause in the agreement and that Paragon had the right to terminate the agreement .
In May 2015, Altaire petitioned for PGR of the ‘623 patent arguing that the ‘623 patent was obvious based on prior existing lots of phenylephrine solution . The Patent Trial and Appeal Board (“PTAB”) instituted review but ultimately found that Altaire failed to show that the ‘623 patent was obvious because Altaire had failed to timely qualify its expert. Altaire appealed to the Federal Circuit .
Article III standing requires that an appellant/petitioner have suffered an “injury in fact.”  In order to establish injury in fact, a litigant must show that they suffered invasion of a legally protected interest that is concrete and particularized, and actual or imminent, not conjectural or hypothetical .
The majority further commented that PGR estoppel compounded Altaire’s injury. It noted that PGR estoppel likely precludes Altaire from arguing that the ‘623 patent is obvious over Altaire’s prior manufactured products because a petitioner in a PGR is estopped from arguing any ground of invalidity in a subsequent court action that could have reasonably been made during the PGR . The court distinguished prior cases Phigenix and Consumer Watchdog  from the Altaire case because Altaire’s injury was imminent .
Regarding the substance of the appeal, the Federal Circuit reversed the PTAB decision, holding that the PTAB abused its discretion in refusing to consider Altaire’s expert’s testimony because of alleged noncompliance with procedural rules .
Judge Schall dissented from the majority opinion that Altaire had standing because Judge Schall believed the harm to Altaire was not imminent. First, Judge Schall argued that being sued for patent infringement in three years’ time, after the agreement between the parties naturally terminates in 2021, cannot support a finding that the harm is imminent . Second, Judge Schall argued that Paragon’s right and ability to terminate the agreement before 2021 is contingent upon Paragon winning its case in District Court and therefore any harm to Altaire before 2021 is speculative because it may not occur if Altaire wins in District Court .
PGRs can only be filed within a nine month window starting from the issuance of the patent . This limited time window coupled with the Federal Circuit’s Article III standing requirements puts certain would-be PGR petitioners in a difficult position. The Altaire case exemplifies the dilemma. Altaire’s only option for challenging the ‘623 patent at the PTAB based on its prior phenylephrine products was to file a PGR since inter partes review can only be based on written prior art, but with a limited nine-month window, Altaire could not wait for an actual injury to materialize. Altaire was thus forced to choose foregoing PGR entirely or filing a PGR and risk losing at the PTAB, being estopped from raising those arguments in later infringement litigation and having no standing to appeal. Altaire chose the latter and fortunately for Altaire, the Federal Circuit held Altaire had standing to appeal.
 Any person who is not the patent owner may file a petition to institute a post-grant review. 35 U.S.C. § 321(a). However, the Constitution confines Article III courts to deciding actual “Cases” or “Controversies.” U.S. Const. art. III, § 2.
 No. 2017-1487, 2018 WL *2167293 (Fed. Cir. May 2, 2018).
 See Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168 (Fed. Cir. 2017).
 Altaire, 2018 WL *2167293 at 4.
 The court declined to address the alleged reputational injury to Altaire.
 Altaire, 2018 WL *2167293 at 5.
 The Federal Circuit may further clarify the significance of a future planned ANDA filing to the standing issue in Momenta Pharmaceuticals, Inc. v. Bristol-Myers Squibb Company (No. 17-1694, filed Feb. 22, 2017, argued Dec. 5, 2017).
 Id. (quoting Prasco LLC v. Medics Pharm. Corp., 537 F.3d 1329, 1338 (Fed. Cir. 2008)).
 Id. (quoting Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016)).
 Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258 (Fed. Cir. 2014).