PLUMLEY v. HALE

OPINION

MATTHEWS, Justice.

In these medical malpractice cases the trial courts ordered the use of expert advisory panels under AS 09.55.536, and upheld the constitutionality of that statute.1 Petitioners challenge these orders on various grounds, all of which were rejected by the superior courts. We granted their petitions for review on one question only, namely whether AS 09.55.536 was enacted in violation of the recorded vote requirement of article II, section 14 of the Alaska Constitution.

The procedural history of the statute in question is not in dispute.2 It was enacted as part of section 33, chapter 102 of the 1976 Session Laws of Alaska, the chapter being devoted to various matters pertaining to health care.3 The bill was introduced in the House as HB 574, was replaced by a committee substitute bill (CSHB 574), and on the third reading of the committee substitute, as amended, the bill was approved in the house by a recorded roll call vote of 29-0. 1976 House Journal 433. The bill was then engrossed, certified and sent to the Senate.

A Senate committee proposed an amended version of the bill (SCS CSHB 574), which was passed after the third reading by a recorded roll call vote of 19-0. 1976 Senate Journal 460. The bill as thus amended was returned to the House, where by simultaneous voice vote, the House refused to concur in the Senate amendments. The Senate then refused to recede from its amendments, also by simultaneous voice vote, and each house then designated three members to serve on a free conference committee.

The free conference committee under then current legislative rule 43(b) had the authority to propose and draft entirely new statutory provisions, as long as they were germane to the subject matter of the legislation being considered.4 The free conference committee did in fact recommend adoption of a version of chapter 102 SLA 1976 that differed in many respects from the version originally passed by the House.5 The free conference committee's bill (FCCS SCS CSHB 574) was passed by the Senate by a recorded vote of 17-3. 1976 Senate Journal 1314. In the House, however, there was no roll call or recorded vote; the free conference committee bill was passed there by a simultaneous voice vote. 1976 House Journal 1535.

The petitioners contend that this voice vote constituted "final passage" of chapter 102 SLA 1976 and thus violated article II, section 14 of the Alaska Constitution:

The respondents here, and the State of Alaska, as intervenor, argue that "final passage" is a legislative term of art, referring only to the initial passage of a bill in its house of origin, and to the initial passage of the bill, in amended or original form, by the second house. Thus it is argued that article II, section 14 does not apply to subsequent legislative action taken to resolve any discrepancies in the initial versions of a bill passed by the two houses.

We cannot agree that article II, section 14 was intended to be limited in the fashion suggested by the respondents. The requirement that the vote on final passage be by individual yeas and nays, and be recorded in the relevant house journal, is a formality embodying several purposes: to ensure deliberation prior to passage, to ensure that the requisite majority of each house affirmatively votes to enact a bill into law, and to provide a public record of the vote cast by each legislator. It is thus designed to engender a responsible legislative process worthy of the public trust.

These purposes would be ill-served if "final passage" were to be construed merely as a term of art. A free conference committee may substitute a bill which is entirely different from those presented to it by each house. We can think of no reason why such a bill should be exempt from the constitutional requirement of a recorded individual vote. The observation made by the Kentucky Supreme Court nearly one hundred years ago is no less true today:

Norman v. Kentucky Board of Managers of World's Columbian Exposition, 14 Ky. 529, 20 S.W. 901, 902 (1892). It is in this clearest and most straightforward sense that we believe article II, section 14 was intended to be understood, and the sense in which the electorate that ratified it must have understood it.6

The argument that "final passage" always had a peculiar and specific meaning prior to the constitutional convention, is supported by historical proofs that are at best ambiguous. The Organic Act of Alaska7 and the early internal rules of the territorial legislatures,8 do seem to have imposed the formalities of final passage only on the initial passage in each house. However these usages of "final passage", rather than defining a term of art, can be viewed as reflecting the reality that the initial passage in a house was most frequently true final passage. As legislative procedures evolved, the inappropriateness of a limited definition of "final passage" became apparent. Thus we find the territorial legislature amending its rules9 and practices,10 albeit not consistently.11 Also, while some courts prior to our constitutional convention had opted for a technical definition of "final passage" in their own constitution,12 others had rejected such an interpretation.13

The first sentence of article II, section 14, demonstrates the drafters' anticipation that procedural changes would continue to occur.14 At the same time article II, section 14 does not retain the juxtapositions giving rise to the limited construction of the Organic Act. Only the "three readings" requirement can be read as pertaining to the initial passage in each house. The "affirmative vote of the majority of the membership" and recorded vote requirements were not similarly limited, and are most naturally read as applying to the vote by which a bill actually and finally becomes law.

Utilization of the voice vote procedure has gained in frequency in recent times, and such legislative practice is entitled to interpretative weight. See C. Sands, 2A Sutherland's Statutes and Statutory Construction § 49.03 (4th ed. 1973). But the practice has not been consistent; the Senate has used it far less than the House of Representatives.15 Furthermore, the legislature itself has recognized the problem; in 1977, Uniform Rule 41 of the Legislature was amended to require a formal "final passage" vote for the adoption of conference committee proposals.16 Finally, we note that the very first state legislature, in codifying article II, section 14, as AS 24.30.080 and 24.30.090, did so in a fashion denoting its understanding that the "third reading" and "final passage" requirements were meant to be construed and applied as independent terms.17 Authorities published subsequent to the constitutional convention support our interpretation of "final passage." See Minnehaha County v. South Dakota State Board of Equalization, 84 S.D. 640, 176 N.W.2d 56, 59-60 (1970); 1 Sutherland's Statutes § 14.04, at 386.18

We therefore hold that "final passage" refers to that vote which is the final one in a particular house with regard to a particular bill. Such a final vote may occur at various stages. It may be on the third reading of a bill; it may be the vote to concur in the amendments adopted by the second house; it may be the vote to recede from amendments not concurred in by the other house; or it may be the vote to adopt the amendments proposed by a conference committee.19

Whether a vote is the final one in a particular house is naturally a fact ascertainable only in retrospect, since whether a house has cast its final vote will frequently depend upon the action subsequently taken in the second house. We recognize that this uncertainty will compel a formal tally of votes whenever a vote has the potential to be the final one. However, the purposes served by the recorded vote requirement justify whatever burdens may be felt by the legislature in recording several votes rather than one.20

II

We now turn to the issue of the retroactive application of today's holding. Absent special circumstances, a new decision of this court will be given effect in the case immediately before the court, and will be binding in all subsequent cases in which the point in question is properly raised, regardless of the fact that the events to which the law is applied occurred prior to the actual decision of the Court. In a number of our cases however, we have recognized that on occasion, the interests of justice may demand that a new rule of law only be applied prospectively.21 We find that today's holding requires this treatment.

In accord with United States Supreme Court precedent,22 we have previously identified four conditions indicating the propriety of non-retroactive treatment in civil cases: 1) the holding is one of first impression, or overrules prior law, and was not foreshadowed in earlier decisions; 2) there has been justifiable reliance on an alternative interpretation of the law; 3) undue hardship would result from retroactive application; and 4) the purpose and intended effect of the holding is best accomplished by prospective application. Moore v. State, 553 P.2d 8, 28 (Alaska 1976); Warwick v. State ex rel. Chance, 548 P.2d 384, 393-6 (Alaska 1976); Schreiner v. Fruit, 519 P.2d 462, 466-7 (Alaska 1974). See also State v. Aleut Corporation, 541 P.2d 730, 740 n. 25 (Alaska 1975).

The petitioners concede that with respect to the first of the foregoing criteria, the issue decided today is one of first impression in Alaska, and that our holding was not clearly foreshadowed at the time chapter 102 SLA 1976 was enacted. It is likewise incontestable that the second and third factors that we must consider, justifiable reliance and undue hardship, are present in an overwhelming degree in this case. The reliance is of two sorts. It is clear that the Alaska legislatures that have de facto interpreted "final passage" as "third reading," have done so in good faith, on the basis of respectable precedent.23 It is the reliance on and potential hardship resulting from the legislatures' acts, however, with which we are primarily concerned.

The reliance of the legislature on the constitutionality of its voice vote procedure has resulted in the enactment of a great many statutes by the identical process challenged today. In 1975-76 alone, at least thirty-seven bills became law by virtue of a voice vote approval by at least one house of free conference committee amendments. See supra note 15. Such legislation was concerned with such diverse and critical subjects as aid to the handicapped, leasing of state land, criminal assault, day care, pharmacists, operating expenses of the state government, the income tax, school construction, public employees' retirement, workers' compensation, employment of Alaska residents, flood control, minimum wage, municipal revenue sharing, bank records, consumer protection, the residential homestead exception, the University of Alaska, public employee salaries, possession of weapons, motorcycle safety, airport improvements, general bond obligations, and dissolution of marriage. While the public's reliance on the validity of these statutes is not precisely calculable, it is clear that it is profound and permeates every stratum of Alaska society. To apply today's holding retroactively so as to make each of these statutes subject to challenge, "would have an impact upon the administration of . . [state] law so devastating as to need no elaboration." Tehan v. United States ex rel. Shott, 382 U.S. 406, 419, 86 S.Ct. 459, 467, 15 L.Ed.2d 453, 461 (1966).

Likewise, the enactment of chapter 102 SLA 1976 has itself fostered a justifiable and significant degree of reliance. Pursuant to a procedure arguably proper under article II, section 14, the legislature created the Medical Indemnity Corporation of Alaska, and with it a malpractice insurance scheme that was obligatory upon all physicians and hospitals in this state, and potentially obligatory upon all health care providers. Supra note 3. In accordance with the provisions of that statute, insurance was purchased and health care provided, in the belief that the authority of the State of Alaska stood behind and assured the validity of such insurance policies. While the obligatory aspects of the statute have been repealed,24 the reliance of past and present policyholders remains unaffected.25 In the absence of convincing reasons to do otherwise, we are loathe to disturb these contracts.26

Finally, with respect to the fourth criterion that we must consider, the purpose of the holding, we find that the rationale of our holding today is neither inconsistent with prospective application, nor compels retroactive application. To strike down a statute on the basis of an article II, section 14 procedural error would serve the end of vindication of the substantive objectives of the recorded vote requirement. In the present context we are forced to recognize that the harshness of the remedy is disproportionate with achievement of this purpose.

First, a statute enacted by voice vote in one house on final passage, but preceded by an individual recorded vote on third reading, hardly indicates a total failure of the substantive objectives of the individual recorded vote requirement. A very different question would be presented were a statute enacted without benefit of an individual recorded vote at any stage. In such a case there would be no objective assurance of deliberation or majority passage, and no record of the vote of individual legislators. Furthermore, in the particular case of chapter 102 SLA 1976, additional assurances of no substantive harm are provided by the facts that the vote recorded in the House of Representatives on the third reading of the bill was 39 to 0, 1975-76 House Bill History 433, no representative made objection to the voice vote on the free conference revisions,27 id. at 1535, and that the Senate vote on final passage was recorded in strict compliance with article II, section 14. 1975-76 Senate Bill History 1314. Finally, the general constitutional objective of securing the public trust in the legislative process would hardly be furthered by striking down chapter 102 SLA 1976 or any of the myriad statutes enacted by similar procedures.

In light of our conclusions that today's decision is one of first impression, that substantial reliance has followed from the legislature's alternative interpretation of law, that undue hardship would result from retroactive application of our holding, and that the rationale of today's holding does not compel retroactivity, we hold that any statute heretofore passed by voice vote on final passage, subsequent to a recorded vote on third reading, shall be immune from challenge under our holding in Part I of this decision.

The petitioners here recognize that the severe consequences that would follow a retroactive holding compel prospectivity. Accordingly, they seek only a limited form of retroactivity, so that at least they might benefit from today's holding.

It is fundamental that the determination as to whether a decision will be prospectively or retroactively applied, is one guided by equitable principles.28 This court has therefore recognized that a prospective holding need not be purely prospective. See Warwick v. State ex rel. Chance, 548 P.2d 384, 393 (Alaska 1976). On numerous occasions, fairness has required that at least the litigants who successfully urged adoption of a new rule in this court be afforded relief, though the new rule was otherwise given only prospective application.29 Indeed the United States Supreme Court has observed that any other result would be "most unusual." Simpson v. Union Oil Company, 396 U.S. 13, 14, 90 S.Ct. 30, 31, 24 L.Ed.2d 13, 15 (1969).

In the instant case we cannot ignore the fact that these petitioners are one-time litigants who in all likelihood will not benefit from today's holding in any future litigation. We are also mindful that the evolution of legal principles depends in large part on the incentive provided private parties to devote energies and resources to raising, briefing, and arguing new issues with the requisite skill and care. Several authorities have recognized the weight of these considerations.30

A form of relief may be afforded these petitioners that accommodates these considerations without compromising the principles that otherwise compel prospectivity. The petitioners' constitutional challenge arose by virtue of the trial courts' various rulings pertaining to expert advisory panels under AS 09.55.536, enacted as part of section 33, chapter 102 SLA 1976. The respondents have not taken any actions in reliance on the advisory panel provision nor can we see that depriving them of its operation will cause undue hardship.

We have already determined that neither chapter 102 SLA 1976, nor any other bill previously enacted into law by voice vote, will be overturned by today's interpretation of article II, section 14, and thus we do not invalidate AS 09.55.536. However, in order to effectuate the goals of fairness and intelligent advocacy, we also hold that AS 09.55.536 will not be applicable in the malpractice actions consolidated for this appeal.31 In every other respect today's holding will be purely prospective.

BURKE, J., not participating.