Jensen v. State, Department of Labor & Industry

No. 83-496
IN THE SUPREME COURT OF THE STATE OF MONTANA
1984

CLARE J. JENSEN,
Petitioner and Respondent,

STATE OF MONTANA, DEPARTMENT OF
LABOR AND INDUSTRY, JOB SERVICE
DIVISION & DAVID HUNTER, Commis-
sioner of the Dept. of Labor,
Respondents and Appellants.

APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable Joel G. Roth, Judge presiding.

COUNSEL OF RECORD:
For Appellants:
R. Scott Currey, Dept. of Labor & Industry,
Helena, Montana
Books & Budewitz; Patrick Hooks argued, Townsend,
Montana
For Respondents:
Neil G. Jensen argued, Great Falls, Montana

-- -----
Submitted: June 19, 1984
Decided: October 25, 1984

~iled:
Our . q-14
fu
Mr. Chief Justice Frank I. Haswell delivered the Opinion of
the Court.
The Department of Labor and Industry, State of Montana,
appeals the judgment of the Cascade County District Court
finding the Department must grant the petitioner a veteran's
employment preference and appoint him to a manager's job.
The petitioner, Clare Jensen, was hired by the Job
Service Division of the Department of Labor and Industry in
1961. When hired, Jensen claimed and received a veteran's
preference. On March 12, 1982, the Department issued a
vacancy announcement for the position of manager of the Great
Falls Job Service Office. Nine persons, including Jensen,
applied for the position. Seven were veterans. The Depart-
ment viewed the filling of the position as an internal promo-
tion. Only internal applications were accepted and veteran's
preference, traditionally granted only in initial hire situa-
tions, was not considered. On June 16, 1982, a nonveteran,
Yerhert Waltermire, was chosen to fill the manager position.
On June 16, 1983, this Court issued its decision in
Crabtree v. Montana State Library (Mont. 1983), 665 P.2d 231,
40 St.Rep. 963. In Crabtree this Court affirmed the lower
court decision of Judge Bennett of the Lewis and Clark County
District Court. Judge Bennett ruled on February 14, 1982,
that the State's failure to grant a job applicant an absolute
preference was in violation of the Veterans and Handicapped
Civilians Employment Preference Act (hereinafter "the Act") ,
section 10-2-201 et seq., MCA. This ruling and our subse-

quent affirmance held that qualified veterans and disabled
civilians are entitled to state employment over nonveteran
and nondisabled applicants, thus granting veterans and dis-
abled persons an absolute preference. See Crabtree, supra.
 On J u n e 2 1 , 1983, J e n s e n f i l e d a " p e t i t i o n t o e n f o r c e

employment p r e f e r e n c e . " Relying on C r a b t r e e , J e n s e n c l a i m e d

t h a t h e s h o u l d have been h i r e d f o r t h e p o s i t i o n due t.o h i s

veteran's status.

On September 19, 1983, the District Court issued an

o r d e r f i n d i n g t h a t t h e i n t e r p r e t a t i o n of t h e v e t e r a n ' s p r e f -

erence as announced in Crabtree would be applied t o this

case. The c o u r t d e t e r m i n e d t h a t t h e h i r i n g was n o t an i n t e r -

n a l d e p a r t m e n t promotion b u t an appointment withi-n t h e s c o p e

of t h e p r e f e r e n c e law.

The District Court concluded that the Department of

Labor must a p p o i n t J e n s e n t o t h e manager's job and t h a t t h e

Department must pay t h e r e t r o a c t i v e s a l a r y t h a t J e n s e n would

have r e c e i v e d from J u l y 1, 1982, p l u s i n t e r e s t . Judgment was

e n t e r e d on J e n s e n ' s c l a i m October 11, 1983.

The l e g i s l a t u r e r e p e a l e d t h e a b s o l u t e v e t e r a n ' s p r e f e r -

ence in a special session called for this purpose. The

repeal-ing l e g i s l a t i o n , Senate R i l l 2 of the First Specj.a.1

Session of the 1983 L e g i s l a t u r e , provid.ed t h a t preference

c l a i m s t h a t were reduced t o jud-gment p r i o r t o December 23,

1983, t h e e f f e c t i v e d a t e of t h e l e g i s l a t i o n , were e n f o r c e -

able. The case a t ba.r, therefore, presents a preference

claim that was litigated subsequent to our decision in

C r a b t r e e and p r i o r t o r e p e a l of t h e o l d Act.

The appellant Department has raised the following

issues :
1. Whether the District Court correctly determined

t h a t t h e C r a b t r e e i n t e r p r e t a t i o n of t h e v e t e r a n ' s p r e f e r e n c e

s h o u l d b e a p p l i e d t o t h e f a c t s of t h i s c a s e .
 2. Whether the District Court was correct in conclud-
ing the hiring was an appointment to a job rather than a
promotion.
3. Whether the remedy of awarding Jensen the job and
backpay was a proper form of relief.

I

The first issue raises the question of retroactive
applica-tion of our Crabtree decision. Whether or not a
judicial interpretation should he applied retroactively is a.
question guided by the principles enunciated in LaRoque v.
State (1978), 178 Mont. 315, 583 P.2d 1059. In LaRoque we
followed the factors set forth by the United States Supreme
Court in Chevron Oil Company v. Huson (1971), 404 U.S. 97, 92
S.Ct. 349, 30 L.Ed.2d 296. These considerations are as
follows:
(1) The decision to be applied nonretroactively must
establish a new principle of law either by overruling prece-
dent or deciding an issue of first impression whose resolu-
tion was not clearly foreshadowed;
(2) The rule in question must be examined to determine
whether its retroactive application will further or retard
its operation; and,
(3) The equity of the retroactive application must be
considered.
As to the first consideration, the State argues that
Crabtree established a. new rule of law in Montana and the
decision was not foreshadowed by prior law. Prior to
Crabtree, the Act had been interpreted by the Attorney Gener-
al and administrative agen.ices as granting a relative, not
absolute, preference. Several Attorney General opinions and
administrative rules of the Merit System Council are cited in
support of appel.lantfsccntention. The State argues that
since Crabtree overruled the established executive interpre-
tation of the Act, the decision should be applied
nonretroactively under the first factor of LaRoque and
Chevron Oil.
We do not find this argument persuasive. As Jensen
noted in the court below and on appeal, Crabtree held that an
absolute preference was intended by the enactment of the Act
in 1921. The p1a.j.n and unambiguous langua-ge of the Act
created an absolute preference that existed from day one of
its enactment through its repeal in 1983. Our judicial
decision of Crabtree did not create a new principle of law as
much as it announced the continuing impact of the statute.
The plain language of the Act foreshadowed Crabtree.
The second LaRoque consideration can be restated as a
question of whether or not the absolute preference rule of
Crabtree would be furthered by its retroactive application.
Job opportunities for veterans and handicapped, the obvious
purpose of the Act, could not be achieved without adherence
to the mandates of the preference statute. In the present
case the Labor Department did not consider veteran's prefer-
ence whatsoever in its employment decision. Were Crabtree
not applied here, the Department's total disregard for the
Act would be condoned. Such an outcome could not further the
purpose or operation of the Act.
Finally, the equity of retroactive application of
Crabtree should be considered. The Sta.te maintains retroac-
tive application would disrupt employment relationships
established as long as five years ago; it would harm those
who justifiably relied upon established employment
procedures. The State argues retroactive appl-ication would
be particularly inequitabl-e to Herbert Waltermire who wil.1-
lose his employment. if the veteran Jensen is placed in the
Great Falls manager position.
In LaRoque we stated that where substantial inequity
will result by retroactive application, a ruling of
nonretroactivity is proper. A case frequently cited for this
proposition i.s Cipriano v. City of Houma (1969), 395 U.S.
701, 89 S.Ct. 1897, 23 L.Ed.2d 647. In Cipriano the Supreme
Court held a decision that a Louisiana statute, giving only
property taxpayers the right to vote in bond elections, was
unconstitutional and would not be applied retroactively
because significant ha.rdships would be imposed on cities,
bondholders and others connected with munici.pa1 utilities.
In the case at bar, retroactive application is
straightforward and does not pose the kind of hardship or
complexity presented by Cipriano. Potential ly Herbert
Waltermire will suffer real hardship by retroactive applica-
tion of Crabtree. However, our consideration of the equities
involved cannot be controlled by the potential impact on one
individ.ua1. Considering the broad purpose of the Act, j - t s
impact on all concerned parties and the ease with which
absolute preference can be applied in this case, the balance
of equities lies with retroactive application.
Applying the three considerations of LaRoque to the
case at hand, we find they do not prevent retroactive appli-
cation of Crabtree. Accordingly, the decision of the Dis-
trict Court on this issue is affirmed.
 I1

The District Court concluded that Jensen's hiring
constituted an appointment, not a promotion. Hence, the
controlling words of the Act "appointment and employment"
were triggered and the Act was found applicable.
The State argues that the Act applies only to initial
hiring. Since only internal applications were considered by
the Department, the State contends Jensen's claim concerns a
promotion outside the scope of the Act.
This issue may be decided without determining whether
the hiring was an appointment or promotion. The Act express-
ly covers employment as well as appointment. To give the Act
any effect, the hiring of the Great Falls manager position
must be construed as employment. We affirm the trial court's
conclusion that the Act covered Jensen's claim.

Finding that the Act applies to the facts of this case
and Jensen was wrongly denied a-n absolute preference, we must
address the propriety of the remedy.
The District Court concluded:
". . . the Department must grant the
veterans preference to the Petitioner and
must appoint Petitioner to the Manager's
job. Additionally, in order to provide a
complete remedy to the Petitioner, the
Court concludes that the Department must
pay the retroactive salary that Petition-
er would have received from July 1, 1982,
plus interest thereon."
The underlying enforcement statute is set forth at section
10-2-206, MCA. It provides in relevant part that "[tlhe
District Court has jurisdiction upon the proper showings to
issue its order directing and ordering the appointing author-
ity to comply with this law in giving the preference provid-ed
for."
As discussed above, the petitioner ,Sensen is entitled
to an absolute preference. While the District Court has
jurisdiction to order a state agency to comply with the law
and grant a preference, it does not follow that such court
has the additional authority to order an agency to grant the
petitioner the job. This relief is not a correct and legal
remedy under the statute nor our constitution.
In the Application of OISullivan (1945), 117 Mont. 295,
158 P.2d 306, a statutory remedy providing the same relief
that Jensen was afforded here was declared unconstitutional.
The legislative history of section 10-2-206, MCA, and the
CtSullivan decision must be examined to understand why the
present relief is also improper.
When the Act was first enacted in 1921, there was no
enforcement or remedy provision. This oversight was correct-
ed by the Twenty-fifth Legislative Assembly in 1937 when the
original section 5653 was amended. Language setting forth a
remedy for aggrieved veterans was added to section 5653.
This language with some minor stylistic changes is identical
to the contemporary language of section 10-2-206, MCA, in
effect during the case at bar. Essentially, there is a
procedure set forth for the filing of a petition, show cause
hearing, and district court order directing the appointing
authority to comply with the law by giving the preference.
However, the legislature strengthened the described
remedy in 1943. By amendment (1943 Mont. Laws, Ch. 160),
section 5653 was changed giving the district court original
jurisdiction to determine whether a preference was proper and
to issue an order directing the appointing authority to
employ the veteran and award backpay. This procedure was
invoked in 1945 by Emmet O'Sullivan, a veteran of World War
I, who had unsuccessfully sought the position of city attor-
ney in Harlowton. The City challenged the constitutionality
of the enforcement procedure and this Court declared the
amendments of Chapter 160 invalid.
The basis of the OfSullivan ruling was that section
5653, as amended by Chapter 160, conferred appointment au-
thority upon the judiciary. The Court noted that power of
appointment is generally an executive function. The Court
found the amendment was also void insofar as it dispensed
with due process rights of notice and hearing.
Following OISullivan, the legislature in 1947 deleted
the strengthened remedy provision and section 5653 was amend-
ed to how it read prior to 1943. As noted above, the en-
forcement provision remained essentially unchanged from this
time in 1947 until. Senate Bill 2 of the Special Session
repealed the Act in December 1983.
In summary, the remedy the District Court granted
Jensen was once provided by statute and this Court found the
law unconstitutional. The precedent of OfSullivan controls:
the legislature cannot place the power of appointment in the
judiciary. Under the enforcement statute and the Constitu-
tion, the District Court may order the Department to grant
Jensen the veteran's absolute preference. Beyond this statu-
tory relief, the judiciary lacks any power to appoint a
particular petitioner to a job.
We have held that Crabtree should be retroactively
applied to this hiring. Although Jensen has carried the
burden of pressing this legal issue, once the Act is applied,
it provides a preference for all preferred persons.
 For the foregoing reasons, we vacate that part of the
judgment that addresses Jensen's remedy and remand to the
District Court with directions to order the Department of
Labor and Industry to reopen the manager position to the
original applicants, grant Jensen and the other preferred
applicants their preference, and otherwise fill the vacancy
in accordance with Crabtree.
The judgment is affirmed in part and vacated in part.

%hd a. wm&
Chief Justice
.

We concur:

Justices
Mr. Justice John C. Sheehy and Mr. Justice John C. ~arrison,
concurring and dissenting:

We concur with the majority opinion except for the
remedy provided Jensen. To that portion of the majority
opinion we dissent.
Jensen is the only veteran of seven to come to court to
enforce his veteran's right to preference. The other six
veterans, for whatever reasons, did not seek court redress.
Each of them, except Jensen, has thereby acquiesced. in what
the District Court did.
It wa.s Jensen who continued. the struggle to
achieve what was justly his, a vet.eran1sright to preference.
He alone bore the brunt of the battle in court, but he may
lose the war if the appointing authority gives the job to
some other of the remaining six veterans. We do not see that
possible result as fair or required.
Since only Jensen is before this Court, the decision to
be made is whether he is entitled to the job over Waltermire.
The other veterans, by failing to go to court, have
acquiesced in Waltermire's appointment. Jensen should be
awarded the fruits of his trial and given the job, with
baclcpay .
?lr. Justice L. C. Gulbrandson, dissenting.

I respectfully dissent.
It is my opinion that the Crabtree int~rpretation of
the Veterans and Handicapped Civilians Employment Preference
Act should not be retroactively applied.
In 1934, the Attorney General issued his opinion (15
A.G. O p . 417) that the Act granted a veteran preference only
when his qualifications equaled the most qualified
non-preferred applicant. In a later opinion (21 A.G. Op.
105), in 1945, the Attorney General construed the preference
as absolute, but in a 1949 opinion (23 A.G. 0 . 46), the

Attorney General found the preference to be not absolute,
but to consist only of a certain percentage to be added to

the veterans examination grade.
It is clear that the agency charged with administering

the Act followed the 1949 Attorney General opinion and
interpreted the Act as granting a relative preference. The
Crabtree decision, of June 16, 1983, ruling that the
preference was absolute, effectively overturned an executive
interpretation which had been relied upon for more than
thirty-three years by state, county and city agencies.
It is my view that, in effect, a new principle of law
was established, which overruled clear past precedent, and
the Crabtree decision resolved an issue of first impression
whose resolution was not clearly foreshadowed, and

therefore, the decision should not be appli retroactively.

* r
. L
7
Justice
Mr. J u s t i c e D a n i e l J. S h e a , s p e c i a l c o n c u r r e n c e :

I join t h e majority opinion i n a l l r e s p e c t s , although I

b e l i e v e it would h a v e b e e n b e t t e r t o c o m p l e t e l y open up t h e
a p p l i c a t i o n p r o c e s s r a t h e r t h a n t o l e a v e t h e j o b open o n l y t o
t h o s e who a p p l i e d f o r i t . The j o b was n o t a d v e r t i s e d w i t h
the idea of giving a veteran an absolute preference, and
t h e r e f o r e it would. b e more f a i r t o a l l c o n c e r n e d t o a l l t h o s e

who want t o a p p l y t o d o s o . Nonetheless, because w e have a
d i v i d e d C o u r t on t h i s i s s u e , and I a m t h e o n l y m e m b e r who
would. open u p t h e entire application process, I join the
opinion t o a r r i v e a t t h e necessary four votes. M v o t e on
y
t h i s i s s u e i s n e c e s s a r y t o e v e n p u t t i n g an o p i n i o n down a n d I
do n o t feel it i s a t r a v e s t y of j u s t i c e t o l i m i t t h e job t o

t h o s e who a l r e a d y h a v e a p p l - i e d f o r it. I f I did so feel I
would not join the opinion just to make it a majority
opinion..
I a l s o emphasize t h a t t h e C r a b t r e e d.ecision, i s , a s i s

s t a t e d i n t h e o p i n i o n h e r e , simply an e n u n c i a t i o n of t h e law
a s it ha.s a l w a y s e x i s t e d . There h a s never been an o p i n i o n

from t h i s C o u r t c o n t r a r y t o t h e d e c i s i o n w e made i n C r a b t r e e .
When w e d e c i d e d C r a b t r e e , w e d i d n o t d e c l a r e new law.
I n h i s d i s s e n t J u s t i c e Gulbrandson d e c l - a r e s t h a t w e d i d
d e c l a r e new l a w , b e c a u s e o u r d e c i s i o n was t h e n c o n t r a r y t o
the 1949 Attorney General opinion that interpreted the
Veterans' Preference Act as granting only a limited or

qualified preference. However, two p r e v i o u s A t t o r n e y G e n e r a l

o p i n i o n s came up w i t h mixed r e s u l t s : a 1934 o p i n i o n d e c l a r e d .

that it was a qualified preference, and a 1945 opinion
declared it to be an absolute preference. Political
expediency was clearly the moving force behind these
d i f f e r i n g opinions, and t h i s s h o u l d h a v e b e e n enough n o t i c e
that the agencies should not have relied on the latest
o p i n i o n , b u t i n s t e a d s h o u l d have gone t o c o u r t and o b t a i n e d a
declaratory judgment. Only then do I believe the agencies
would have been justified in relying on an interpretation of
the Veteran's Preference Act.