Cite as: 509 U. S. 86 (1993)
Opinion of Kennedy, J.
See post, at 117-122 (O'Connor, J., dissenting); James B. Beam Distilling Co. v. Georgia, supra, at 550-552 (O'Connor, J., dissenting). For these reasons, I do not join Part II of the Court's opinion.
I nonetheless agree with the Court that Davis v. Michigan Dept. of Treasury, 489 U. S. 803 (1989), must be given retroactive effect. The first condition for prospective application of any decision is that it must announce a new rule of law. Ashland Oil, Inc. v. Caryl, 497 U. S. 916, 918 (1990) (per curiam); American Trucking Assns., Inc. v. Smith, supra, at 179; United States v. Johnson, 457 U. S. 537, 550, n. 12 (1982); Chevron Oil Co. v. Huson, 404 U. S., at 106-107. The decision must "overrul[e] clear past precedent on which litigants may have relied" or "decid[e] an issue of first impression whose resolution was not clearly foreshadowed." Id., at 106. Because Davis did neither, it did not announce new law and therefore must be applied in a retroactive manner.
Respondent argues that two new principles of law were established in Davis. First, it points to the holding that 4 U. S. C. § 111, in which the United States consents to state taxation of the compensation of "an officer or employee of the United States," applies to federal retirees as well as current federal employees. Brief for Respondent 16-18. See Davis, 489 U. S., at 808-810. In Davis, however, we indicated that this holding was "dictate[d]" by "the plain language of the statute," id., at 808, and we added for good measure our view that the language of the statute was "unambiguous," "unmistakable," and "leaves no room for doubt," id., at 809, n. 3, 810. Given these characterizations, it is quite implausible to contend that in this regard Davis decided "an issue of first impression whose resolution was not clearly foreshadowed." Chevron Oil, supra, at 106.
The second new rule respondent contends the Court announced in Davis was that the state statute at issue discriminated against federal retirees even though the statute treated them like all other state taxpayers except state em-
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