Statutory Construction: Should A New Statute Be Applied Retroactively or Prospectively?

• Posted on: Sep 20 2023

By: Jeffrey M. Haber

A question about the application of law sometimes arises when a statute is amended, or the Legislature enacts a new statute that governs a particular issue. In this regard, the question concerns whether the new law or amendment should be applied retroactively or prospectively.

There are “two axioms of statutory interpretation” that are relevant in determining whether a statute or amendment should be given retroactive effect.¹ “Amendments are presumed to have prospective application unless the Legislature’s preference for retroactivity is explicitly stated or clearly indicated.”² However, “remedial legislation should be given retroactive effect in order to effectuate its beneficial purpose.”³ “Remedial statutes are those designed to correct imperfections in prior law, by generally giving relief to the aggrieved party.”⁴ Courts also consider a statute or amendment to be remedial where: the Legislature has conveyed a sense of urgency; the statute was designed to rewrite an unintended judicial interpretation; and the enactment itself reaffirms a legislative judgment about what the law in question should be.⁵ While the foregoing principles serve as guides, a court must discern the legislative intent either from the particular words used or from the nature of the legislation.⁶

In Pacheco v. P.V.E. Co., LLC, 2023 N.Y. Slip Op. 23279 (Sup. Ct., Kings County Sept. 6, 2023) (here), the court was asked to determine whether the Justice for Injured Workers Act (N.Y. Work. Comp. § 118-a) (the “Act”), enacted on December 30, 2022, should be applied retroactively or prospectively. As discussed below, the court held that the Act should be applied retroactively.

Pacheco is an action to recover damages for personal injuries. Defendants/third-party plaintiffs/third third-party plaintiffs P.V.E. CO., LLC, P.V.E. II CO., LLC, and 70 NARDOZZI LLC (“PVE/Nardozzi”) moved pursuant to CPLR § 3025 (b) and (c) for leave to amend its verified answer to assert a proposed affirmative defense of collateral estoppel. Plaintiff cross-moved for the imposition of costs and sanctions against PVE/Nardozzi for interposing a frivolous motion.

Plaintiff commenced the action against PVE/Nardozzi and Suffolk Construction Company, Inc., alleging that he sustained injuries as a result of an accident that occurred at a construction site located in New Rochelle, New York. On or about March 17, 2021, PVE/Nardozzi filed its answer to the complaint. Subsequently, the parties received a Notice of Decision from the Workers’ Compensation Board (the “Board decision”), in which, inter alia, the Workers’ Compensation Board determined that treatment for plaintiff’s neck injury had not been established and disallowed the neck injury claim.

PVE/Nardozzi moved for leave to amend its answer to assert a proposed affirmative defense of collateral estoppel based upon the Board decision. In opposition, plaintiff argued that the Act, which was enacted on December 30, 2022, warranted the denial of PVE/Nardozzi’s motion. Under Work. Comp. § 118-a, “no finding or decision by the workers’ compensation board, judge or other arbiter shall be given collateral estoppel effect in any other action or proceeding arising out of the same occurrence, other than the determination of the existence of an employer employee relationship.” Plaintiff moved for costs and sanctions against defendants for refusing to withdraw the motion and for willfully interposing a frivolous motion. PVE/Nardozzi opposed the cross-motion, arguing that Work. Comp. § 118-a was not applicable as it should be applied prospectively to actions filed post-enactment.

The court denied both motions.

In denying the motion to amend, the court observed that, although there was “no express directive” in Work. Comp. § 118-a instructing that it should be applied retroactively, “it [was] clear that [the statute] is a remedial law intended to ‘correct recent court decisions that granted preclusive effect to decisions of the Workers’ Compensation Board (WCB), barring injured workers from seeking justice through the courts because of an administrative decision of the WCB.’”⁷ The court explained that the “legislative history, specifically the sponsor memorandum, highlight[ed] that administrative hearings before a Worker’s Compensation Law Judge sacrifice[d] basic procedures and evidentiary rules of trials to swiftly decide the claims and that NY WORK COMP § 118-a [was] ‘needed to ensure that findings from cursory Worker’s Compensation Board hearings [did] not prevent workers from exercising their constitutional right to a jury trial.’”⁸ 

Apart from the legislative history, the court noted that “the statute took effect immediately,” thereby evincing “a sense of urgency.”⁹ The court also noted that “retroactive application [would] not result in unfairness or impair substantive rights.”¹⁰ The court explained that “retroactive application [would] not increase [PVE/Nardozzi’s] liability but rather [would] provide plaintiff with an opportunity to exercise his right to a fair trial.”¹¹ “These factors together,” concluded the court, “weigh in favor of the finding that the remedial purpose of NY WORK COMP § 118-a should be effectuated through retroactive application.”¹²

Takeaway

In determining whether a statute should be given retroactive effect, the New York Court of Appeals has identified two competing axioms of statutory interpretation. On the one hand, new statutes and amendments are presumed to have prospective application unless the Legislature states a preference for retroactivity that is explicitly stated or clearly indicated. On the other hand, remedial legislation or statutes governing procedural matters should be applied retroactively, unless such application would “impair vested rights or bestow additional rights.”¹³ Courts must discern the Legislature’s intent, first by looking to the language of the statute and, if necessary, considering legislative history and other guides, such as those discussed above.

In Pacheco, the court examined a number of the factors discussed above, including legislative history, whether retroactive application would result in unfairness or impair substantive rights, and whether there was a sense of urgency in passing the legislation, to conclude that Work. Comp. § 118-a should be applied retroactively.

Footnotes

1. Matter of Gleason (Michael Vee, Ltd.), 96 N.Y.2d 117, 122 (2001); see also Nelson v. HSBC Bank USA, 87 A.D.3d 995, 997 (2d Dept. 2011).
2. Id.; see also Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577, 584 (1998); Matter of OnBank & Trust Co., 90 N.Y.2d 725, 730 (1997); People v. Duggins, 192 A.D.3d 191 (3d Dept. 2021).
3. Matter of Gleason, 96 N.Y.2d at 122; Majewski, 91 N.Y.2d at 584; Matter of OnBank & Trust Co., 90 N.Y.2d at 730.
4. Nelson, 87 A.D.3d at 998 (internal quotation marks omitted).
5. E.g., Matter of OnBank & Trust Co., 90 N.Y.2d at 730.
6. See Matter of Regina Metro. Co., LLC v. New York State Div. of Hous. & Community Renewal, 35 N.Y.3d 332, 370 (2020); Matter of OnBank & Trust Co., 90 N.Y.2d at 730.
7. Slip Op. at *3 (quoting 2021 N.Y. Senate Bill S9149).
8. Id. (quoting id.).
9. Id. (quoting Matter of Gleason, 96 N.Y.2d at 122).
10. Id.
11. Id.
12. Id.
13. See Matter of City of New York (Long Is. Sound Realty Co.), 160 A.D.2d 696, 697 (2d Dept. 1990).

Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes and is not intended to be and should not be taken as legal advice.