Harper v. Virginia Department of Taxation

Summary

The Court held that when it applies a rule of federal law to the parties before it, every court must apply that rule retroactively in cases still open on direct review, including to events preceding the rule's announcement. Because Davis applied its tax-immunity rule to the parties there, Virginia had to apply Davis to the retirees' refund claims. Contrary state retroactivity principles could not supply an independent and adequate ground for denying relief. The Court reversed and remanded, leaving Virginia courts to determine an appropriate remedy consistent with federal due process rather than ordering refunds outright. Justice Thomas's opinion had five votes throughout; Justices White and Kennedy also joined Parts I and III. Justice Scalia separately defended retroactivity as inherent in the judicial role and rejected reliance on stare decisis to preserve prospective decisionmaking. Justice Kennedy, joined by Justice White, concurred in part and in the judgment, retaining Chevron Oil's framework but concluding that Davis announced no new law and therefore applied retroactively. Justice O'Connor, joined by Chief Justice Rehnquist, dissented, arguing that Chevron Oil justified nonretroactivity and that equitable considerations should inform any remedy.