Laurel C. Thomas, Plaintiff-appellant, v. Walter Shipka, in His Capacity As Clerk of the Parmamunicipal Court, Defendant-appellee, 829 F.2d 570 (6th Cir. 1987)

On Petition for Rehearing.

Subsequent to the issuance of our original decision in this case (reported at 818 F.2d 496 (6th Cir. 1987)), plaintiff filed a timely petition for rehearing. The plaintiff's request for rehearing only concerned Part II of our opinion, in which we affirmed the district court's dismissal of plaintiff's 42 U.S.C. § 1983 claim on the basis that it was time-barred. The district court reached this conclusion based upon this court's decision in Mulligan v. Hazard, 777 F.2d 340 (6th Cir. 1985), cert. denied, --- U.S. ----, 106 S. Ct. 2902, 90 L. Ed. 2d 988 (1986). In Mulligan this court followed the dictates of Wilson v. Garcia, 471 U.S. 261, 105 S. Ct. 1938, 85 L. Ed. 2d 254 (1985), and chose a one-year statute of limitations to be applied to all Sec. 1983 actions brought in the state of Ohio. The Mulligan panel further determined that its ruling was to be applied retroactively because it felt constrained to apply Wilson retroactively. Although plaintiff, in the original appeal, asked us to reconsider the retroactive application of Mulligan, we were unable to do so since a subsequent panel is bound by the decision of a prior panel on the same issue.

In the petition for rehearing, plaintiff contended that the Mulligan precedent was no longer valid in light of St. Francis College v. Al-Khazraji, U.S. ----, 107 S. Ct. 2022, 95 L. Ed. 2d 582 (1987), wherein the Supreme Court held, inter alia, that the question of the retroactive application of a recently adopted statute of limitations should be analyzed in accordance with the principles set forth in Chevron v. Huson, 404 U.S. 97, 92 S. Ct. 349, 30 L. Ed. 2d 296 (1971). Further, on June 19, 1987, the Supreme Court announced its decision in Goodman v. Lukens Steel Co., --- U.S. ----, 107 S. Ct. 2617, 96 L. Ed. 2d 572 (1987), reaffirming the use of the Chevron analysis when deciding whether or not to apply a statute of limitations retroactively.¹  Both St. Francis College and Goodman involved claims brought under 42 U.S.C. § 1981, whereas the plaintiff's claims in the instant case were filed pursuant to 42 U.S.C. § 1983. Nevertheless, we find that the Supreme Court rulings are controlling in the case at bar.

On June 26, 1987, the Supreme Court issued a summary order vacating the judgment of this court in Vodila v. Clelland, 802 F.2d 460 (6th Cir. 1986), and remanding the case for further consideration in light of Goodman and St. Francis College. See --- U.S. ----, 107 S. Ct. 3255, 97 L. Ed. 2d 754. Significantly, Vodila involved a claim brought under Sec. 1983 and a panel of this court, relying on the same precedent we cited in Part II of Shipka, applied a per se rule of retroactivity thereby barring plaintiff's claims under the newly selected one-year statute of limitations. The Supreme Court's action taken with respect to Vodila compels the conclusion that the one-year statute of limitations adopted in Mulligan for all Sec. 1983 claims brought in Ohio is not to be automatically applied retroactively and that the decision as to retroactivity must be made on a case-by-case basis.²  Accordingly, we grant plaintiff's petition for rehearing in order to determine whether Chevron requires that the one-year statute of limitations adopted subsequent to plaintiff's filing suit be applied retroactively or prospectively.³  After applying the Chevron analysis to the facts of this case, we conclude that the retroactive application of the one-year limitation period adopted in Mulligan is appropriate here.

In order to apply the Chevron analysis, we must first set forth a brief chronology of the major procedural events in this case and the relevant legal developments which occurred during that period. Plaintiff was discharged from her job with the Parma Municipal Courts on April 7, 1983. Nearly two years later, on April 5, 1985, plaintiff filed suit in federal district court alleging that her termination was politically motivated and was effected without due process thereby giving rise to a cause of action under 42 U.S.C. § 1983 predicated on alleged violations of the first and fourteenth amendments to the United States Constitution. Less than two weeks after the plaintiff filed her suit, the Supreme Court issued its opinion in Wilson v. Garcia, instructing federal courts "to select, in each State, the one most appropriate statute of limitations." 471 U.S. at 275, 105 S. Ct. at 1947 (emphasis added). Prior to Wilson, the federal courts had been applying a variety of different state statutes of limitations to claims filed under 42 U.S.C. § 1983 depending on which state law cause of action was most closely analogous to the factual circumstances which gave rise to the federal claim.

Shortly after the Supreme Court's decision in Wilson, the defendant filed a motion to dismiss alleging a statute of limitations defense based on the one-year limitation period contained in Ohio Rev.Code Ann. Sec. 2305.11 (Anderson 1981), which applied to actions for libel, slander, assault, battery, malicious prosecution, false imprisonment, or malpractice.⁴  The district court denied the motion finding that Wilson called for the application of Ohio's two-year statute of limitations for general personal injury actions contained in Ohio Rev.Code Ann. Sec. 2305.10 (Anderson 1981).⁵  Approximately four months later, this court issued its decision in Mulligan v. Hazard, wherein we compared the two statutes of limitations and concluded that the one-year limitation period contained in section 2305.11 should be applied to all claims brought under 42 U.S.C. § 1983 in federal courts located within the state of Ohio. 777 F.2d at 344. The Mulligan court also held that this statute should be applied retroactively. Id. In response to Mulligan, the district court dismissed the plaintiff's claims sua sponte finding that they were untimely.

The general rule is that federal cases should be decided in accordance with the law existing at the time of the decision;⁶  hence, there is a presumption in favor of applying the one-year limitation period selected in Mulligan retroactively to the plaintiff's claims. But in Chevron, the Supreme Court cautioned against the retroactive application of decisions adopting a new statute of limitations, setting forth a three-part test to be used when making such a determination:

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, for " [w]here a decision of this court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the 'injustice or hardship' by a holding of nonretroactivity."

404 U.S. at 106-107, 92 S. Ct. at 355 (citations omitted).

Of the three factors described above, the first one is the most important for purposes of our analysis in this case. Plaintiff contends that we should not give retroactive effect to our decision in Mulligan because that case represented a departure from clear precedent which had established a longer period of limitations for Sec. 1983 claims filed in Ohio. The Supreme Court agreed with a similar argument in St. Francis College where it upheld the Third Circuit's refusal to apply a two-year limitations period retroactively because, at the time plaintiff had filed his complaint in 1978, a six-year period had been clearly established by Third Circuit precedent. See Al-Khazraji v. St. Francis College, 784 F.2d 505, 514 (3rd Cir. 1986), aff'd, --- U.S. ----, 107 S. Ct. 2022, 95 L. Ed. 2d 582 (1987). In contrast, the Supreme Court upheld the retroactive application of the two-year limitation period in Goodman which also involved a Sec. 1981 claim filed by a plaintiff in federal district court in Pennsylvania. The distinguishing fact was that the plaintiffs in Goodman had filed their claims in 1973, before the six-year limitations period had been clearly established as being applicable to Sec. 1981 claims for employment discrimination filed in Pennsylvania. Therefore, the Goodman court could apply the two-year limitations period to bar some of the plaintiffs' claims since they were not entitled to rely on the six-year statute of limitations which was not firmly established until 1977. See Goodman, --- U.S. at ----, 107 S. Ct. at 2620-2621.⁷ 

Not only did the first factor provide the decisive difference between the outcomes in Goodman and St. Francis College, it is also inextricably interrelated with the third factor in the Chevron analysis which focuses on the equitable considerations involved. If it were shown that the plaintiff had filed a claim within the then established limitations period, it would be inequitable to retroactively impose a shorter limitations period barring the plaintiff's claim. See, e.g., Fitzgerald v. Larsen, 769 F.2d 160 (3rd Cir. 1985). Conversely, it would not necessarily be inequitable to dismiss the action of a plaintiff who was not justified in relying on the longer limitations period which had not yet been clearly established. See, e.g., Goodman, --- U.S. at ----, 107 S. Ct. at 2617-2619. Thus, the importance of the third factor in the Chevron analysis is in large part dependent upon the outcome of the analysis under the first part of the test. To a certain extent, the equitable considerations will always militate against the retroactive application of a shorter limitations period if it would result in the dismissal of the plaintiff's claims. This consideration alone, however, is not necessarily determinative. See, e.g., Goodman, id.

With respect to the second factor, i.e., whether retroactive application would "further or retard" the operation of the new rule, it has been held that the goals of uniformity and simplicity, which provided the impetus for the Supreme Court's ruling in Wilson, were neither enhanced nor diminished by the retroactive application of a decision adopting a single statute of limitations in response to the Wilson mandate. See Smith v. City of Pittsburg, 764 F.2d 188, 196 (3rd Cir.), cert. denied, 474 U.S. 950, 106 S. Ct. 349, 88 L. Ed. 2d 297 (1985). Therefore, the second factor is neutral for purposes of our analysis. See St. Francis College, 784 F.2d at 513.

In sum, the crucial inquiry in this case focuses on whether at the time plaintiff filed her case there was a clear precedent upon which she could have justifiably relied establishing a definite limitations period for the type of claim brought by plaintiff under Sec. 1983.

In the petition for rehearing, plaintiff contends that prior to our decision in Mulligan it was well-settled that claims filed pursuant to 42 U.S.C. § 1983 in federal district courts in Ohio were subject to the four-year limitations period contained in Ohio Rev.Code Ann. Sec. 2305.09, which applies to certain torts including trespass, theft, fraud, and any other torts not otherwise provided for by other sections.⁸  Plaintiff asserts that this precedent was firmly established as early as 1980 by the district court's decision in Schorle v. The City of Greenhills, 524 F. Supp. 821 (S.D. Ohio 1981). In Schorle, the plaintiff brought a Sec. 1983 claim against various city officials and police officers alleging that he had been harassed and wrongfully arrested due to racial discrimination. The defendants filed a motion to dismiss arguing, inter alia, that plaintiff's claims were barred by the one-year limitation period contained in section 2305.11. In a published order, District Judge Spiegel set forth a lengthy review of cases decided within the Sixth Circuit where courts had selected various state statutes of limitations to apply to different types of Sec. 1983 claims. Judge Spiegel observed that " [t]rial courts have been provided with little guidance in the methods to be used and in making the required analysis." 524 F. Supp. at 822 (quoting Hines v. Bd. of Educ., 492 F. Supp. 469, 472 (E.D. Ky. 1980), aff'd, 667 F.2d 564 (6th Cir. 1982) (per curiam) ). Judge Spiegel also noted that the Sixth Circuit had previously applied three different statutes of limitations to civil rights claims brought in Ohio.⁹  The district court also analyzed several other Sixth Circuit cases arising out of Michigan and Kentucky. After pointing to several inconsistencies in the decisions, the court concluded that the accepted method of analysis, i.e., selecting the most factually analogous state law claim, was unworkable because a Sec. 1983 claim is necessarily "broader" than a simple common law tort.¹⁰  Therefore, the Schorle court concluded that one single limitations period should be selected to govern all Sec. 1983 claims arising in Ohio. Rejecting the one-year period in Ohio Rev.Code Ann. Sec. 2305.11 as being contrary to the "broad remedial purposes" of the Civil Rights Act, the court instead opted for the four-year residual statute of limitations contained in section 2305.09.¹¹ 

In support of the contention that Schorle established a "clear precedent," plaintiff cites to the subsequent district court decision in Nash v. City of Oakwood, 94 F.R.D. 83 (S.D. Ohio 1982). We note, however, that the Nash court adopted the six-year limitation period contained in section 2305.07 as opposed to the four-year period adopted in Schorle. See 94 F.R.D. at 87 n. 2.¹² 

Our review of the cases decided within the Sixth Circuit subsequent to the district court's opinion in Schorle demonstrates that Schorle was not the final word on the subject. Less than a year after Schorle was issued, the Sixth Circuit expressly rejected the suggestion of District Judge Bertelsman that the court adopt a uniform statute of limitations in Sec. 1983 cases. See Hines v. Bd. of Educ., 667 F.2d at 564-65 n. 1 (6th Cir. 1982) (per curiam) (ex-teacher's Sec. 1983 claims alleging wrongful discharge barred by Kentucky's one-year statute of limitations). Thus, the Sixth Circuit decision in Hines substantially undermined the rationale relied upon by Judge Spiegel in support of his opinion in Schorle. Moreover, in Woods v. City of Dayton, 574 F. Supp. 689 (S.D. Ohio 1983), affd, 734 F.2d 17 (6th Cir. 1984), the district court criticized Judge Spiegel's opinion in Schorle stating, "While Judge Spiegel's arguments are sound as a matter of policy and practicality, this court must conclude that they do not reflect, in their entirety, the controlling law in this circuit." 574 F. Supp. at 695. The Woods court also noted that "courts and commentators have observed that the Sixth Circuit has arguably been inconsistent and erratic in applying the most 'appropriate' state statute of limitations in civil rights cases." Id. at 694 (citations omitted). Rejecting Judge Spiegel's call for a single statute of limitations in all Sec. 1983 cases, the Woods court adopted a bifurcated analysis of the plaintiff's Sec. 1983 claims dividing them according to the supporting factual allegations and holding that those claims analogous to "assault" were barred under Ohio Rev.Code Ann. Sec. 2305.11, whereas the claims akin to "trespass" were properly brought within the four-year period contained in section 2305.09.

The precedential effect of Schorle was further eroded by subsequent federal court decisions which continued to apply different statutes of limitations to Sec. 1983 claims arising within Ohio. For example, in Kilgore v. City of Mansfield, 679 F.2d 632 (6th Cir. 1982), this court upheld the district court's refusal to apply either the four-year limitation period found in section 2305.09 or the six-year period in section 2305.07, and instead, held that the plaintiff's 42 U.S.C. § 1983 claims based on an allegedly wrongful arrest were barred by the one-year period in section 2305.11 which applied to claims for a "false imprisonment." 679 F.2d at 634.

All three of these cases, Hines, Woods and Kilgore, were decided in the interim between the issuance of the supposedly definitive decision in Schorle and the point at which plaintiff's cause of action accrued. Under these circumstances, we find that the plaintiff was not justified in relying on the Schorle decision adopting Ohio's four-year statute of limitations for all Sec. 1983 claims. This court has previously held that a "clean break" does not automatically occur every time an appellate court renders a definitive ruling which clarifies the law by resolving an issue that had previously been a subject of confusion and conflict amongst the lower courts. See Lawson v. Truck Drivers, 698 F.2d 250, 254 (6th Cir.), cert. denied, 464 U.S. 814, 104 S. Ct. 69, 78 L. Ed. 2d 83 (1983). The conflicting precedents discussed above demonstrate that this area of the law remained unsettled until we issued our opinion in Mulligan. Therefore, under the Chevron analysis, our decision in Mulligan adopting Ohio's one-year limitation period for all Sec. 1983 claims can be applied retroactively to bar plaintiff's claims brought in this case.¹³ 

Upon reconsideration, the motion for rehearing is GRANTED and the judgment of the district court is AFFIRMED.