In shaping equity decrees, the trial court is vested with broad discretionary power; appellate review is correspondingly narrow. Moreover, in constitutional adjudication as elsewhere, equitable remedies are a special blend of what is necessary, what is fair, and what is workable. Traditionally, equity has been characterized by a practical flexibility in shaping its remedies and by a facility for adjusting and reconciling public and private needs. The essence of equity jurisdiction has been the power of the chancellor to do equity and to mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it. The qualities of mercy and practicality have made equity the instrument for nice adjustment and reconciliation between the public interest and private needs as well as between competing private claims.
Following this Court's invalidation in Lemon v. Kurtzman, 403 U.S. 602 of Pennsylvania's statutory program to reimburse nonpublic sectarian schools (hereafter schools) for secular educational services for being unconstitutional, the District Court on remand enjoined any payments under the program for services rendered after Lemon I, but permitted Pennsylvania to reimburse the schools for services performed during the 1970-1971 school year to the date of the court's decision. Appellants challenge the scope of this decree.
Was the district court's order permitting reimbursement for services performed during the 1970-1971 school year to the date of the court's decision proper?
Applying equitable principles, the Court concluded that its decision should not be applied retroactively to prohibit reimbursement for educational expenses already incurred in reliance on the state statute. Based on the district court's findings, the Court determined that there was such reliance by the schools and that denial of reimbursement for services already rendered would impose a substantial financial burden on them. The Court further determined that reimbursement was not inappropriate where the constitutionality of the Pennsylvania statutory program was an issue of first impression whose resolution was not clearly foreshadowed. The Court also ruled that the decision should not be applied retroactively.