Opinion
Appeal No. 01-A-01-9703-BC-00130.
November 7, 1997
Appealed From The Tennessee Claims Commission At Nashville, Tennessee, Honorable W. R. Baker, Commissioner, Middle Division Tennessee Claims Commission No. 500795
PHILLIP L. DAVIDSON, Attorney for Petitioners/Appellants
JOHN KNOX WALKUP, Attorney General and Reporter, MICHAEL E. MOORE, Solicitor General, MICHAEL W. CATALANO, Associate Solicitor General Attorney for Respondent/Appellee
AFFIRMED AND REMANDED
OPINION
Two former employees of the Public Service Commission (PSC) filed claims with the Claims Commission, alleging that they had been wrongfully terminated from their positions with the PSC. The Claims Commission dismissed the claims for lack of jurisdiction. The plaintiffs appealed to this court under Rule 12, Tenn. R. App. P. We affirm the Claims Commission.
I.
John C. Curry and Jimmy Tate were motor carrier enforcement officers employed by the Tennessee Public Service Commission. On January 18, 1995, both officers were terminated by the Executive Director of the PSC "for the good of the service" because of an investigation by the TBI into allegations of dishonest conduct made against them. They appealed their terminations, in accordance with procedures established for the PSC, and an administrative law judge (ALJ) heard their appeal on March 30, 1995.
On September 1, 1995, the ALJ issued an administrative order which included a finding of fact that there was no credible evidence that either party had participated in criminal activity or in misconduct of any kind. The ALJ also found that there had not been such media coverage of the TBI investigation as would render the parties ineffective on the job, and support their discharge for the good of the service. Officers Curry and Tate were ordered to be restored to their positions, with all their back pay awarded to them, and no loss of seniority or of any other benefits attributable to their employment.
Between the time the parties were discharged, and the time they were restored to their positions, Chapter 305 of the Public Acts of 1995 had been passed by the Legislature and signed by the Governor. The Act transferred all law enforcement officers of the PSC to the Department of Safety. Officers Curry and Tate thus became employees of the Department of Safety upon their reinstatement.
The significance of the change is that employees of the Department of Safety are entitled to the protections and procedures found in the Civil Service Act, Tenn. Code Ann. § 8-30-101, et seq., including the right to file negligence claims against the State, whereas employees of the PSC were specifically excluded from the provisions of the Civil Service Act. Tenn. Code Ann. § 8-30-101(a)(23)(J).
On May 16, 1997, Curry and Tate filed a claim with the Tennessee Claims Commission. They alleged that as a result of the negligence of the PSC in compiling the information and evidence which was used to terminate them, they suffered "physical injury and great emotional anxiety and distress, physical injury and have been subject to financial deprivation and loss . . . ." and they asked for damages "in the maximum statutory amount," which would be $300,000 each. See Tenn. Code Ann. § 9-8-307(e).
The Claims Commission dismissed the claims, stating that as the claimants were employees of the PSC at the time of the acts complained of, it had no jurisdiction. An appeal to this court followed.
II.
The appellants contend that they obtained the right to file their claim with the Claims Commission when they were transferred to the Department of Safety. They concede that statutes are generally presumed to operate prospectively only, absent a contrary provision in the statute itself, but they argue that the case of State Dept. of Human Services v. DeFriece, 937 S.W.2d 954 (Tenn.App. 1996) stands for the proposition that a new statute that changes a rule of practice applies to all pending cases. However we believe that Chapter 305 does far more than merely change a rule of practice.
The DeFriece case involved a termination of parental rights. The mother's rights were terminated after three separate hearings in Juvenile Court. Between the first and second hearing, the Legislature changed the route of appeal for a party aggrieved by a juvenile court's decision to terminate parental rights. Prior to April 15, 1994, such a party would have been entitled to a trial de novo in circuit court. After that date, appeal was directly to this court. The mother insisted that she was entitled to a trial de novo.
The DeFriece court acknowledged that there was an exception to the general rule that statutes are presumed to be applied prospectively only. The court quoted a Tennessee Supreme Court case to that effect, Kee v. Shelter Insurance Co., 852 S.W.2d 226 (Tenn. 1993):
"An exception exists . . . for statutes which are remedial or procedural in nature. Such statutes apply retrospectively, not only to causes of action arising before such acts become law, but also to all suits pending when the legislation takes effect, unless the legislature indicates a contrary intention or immediate application would produce an unjust result."
DeFriece at 957-958.
The court found that the new statute was indeed procedural in nature rather than substantive, but that under the circumstances, its retroactive application would be unjust. The court did, however, vacate and remand the order of the juvenile court, on a finding that the State had failed to present clear and convincing evidence that the mother's rights should be terminated.
Our initial inquiry in the present case must be whether Chapter 305 of the Public Acts of 1995 should be considered a substantive statute, in which case it may not be applied retrospectively, or whether it is to the contrary a procedural/remedial statute requiring further analysis to determine whether it should be applied to the claims of Messrs. Curry and Tate.
Chapter 305 is a lengthy and complex statute which amends many different sections of the Tennessee Code in order to abolish the Public Service Commission. It establishes a new entity in the PSC's place, called the Tennessee Regulatory Authority, and it distributes the functions of the PSC to the new entity, and to other entities of State government, such as the Department of Transportation, the Comptroller of the Treasury, and the Department of Safety. Section 46 (out of the 138 Sections of the Act) transfers all enforcement officers of the PSC to the Department of Safety.
We have found nothing in the Act to indicate that the Legislature intended it to have retroactive effect; instead, Section 138 sets out a schedule for the implementation of the Act's various provisions, some parts of it to take effect on July 1, 1995, some on January 1, 1996, some on July 1, 1996, and some (including Section 46) "on becoming law." The Act became law on May 26, 1995.
Statutes that affect only the method or the procedure for prosecuting or defending an action may be considered remedial. A procedural or remedial statute does not affect the vested rights or liabilities of the parties. Statutes that create a new right of recovery or change the amount of damages recoverable are not considered remedial, because they have altered the vested rights of the parties. See Shell v. State, 893 S.W.2d 416 (Tenn. 1995); Saylors v. Rigsbee, 544 S.W.2d 609 (Tenn. 1976).
Thus, the statute in the DeFriece case was not considered substantive, because it did not create a new remedy or right, or deprive a party of a previously existing remedy or right but merely changed the manner in which to vindicate a previously-existing right.
The statute in the present case does alter the vested rights of the parties. It grants the claimants new substantive rights, which they did not enjoy as employees of the PSC: the right to sue the State, and the right to recover substantial damages if their suit is successful. It also deprives the State of an immunity from suit that the legislature chose not to remove prior to May 26, 1995.
It therefore follows that the act is substantive in nature, and not merely procedural, and may not be applied to causes of action that arose before it became law. The Claims Commission was correct to find that it had no jurisdiction to consider the claims of Mr. Curry or Mr. Tate.
We remand this appeal to the Claims Commission for any further actions necessary. Tax the costs on appeal to the appellants.
_____________________________ BEN H. CANTRELL, JUDGE
CONCUR:
_______________________________ WILLIAM C. KOCH, JR., JUDGE
_______________________________ WALTER W. BUSSART, JUDGE