THE LIMITS OF JUDICIAL REVIEW OF EXECUTIVE
ACTION-50ME COMPARISONS BETWEEN AUSTRALIA
AND THE UNITED STATES
Justice Ronald Sackville
INTRODUCTION
The new administrative law in Australia dates from the implementation, over a period
of more than a decade, of the substance of the proposals advanced by the Kerr
Committee and its successors in the early 1970s.1 The now familiar legislation swept
away many of the procedural obscurities associated with the prerogative writs,
codified the general principles governing judicial review of administrative action and
provided for independent merits review of administrative decisions. 2 These reforms
paved the way for the emergence of what commentators have described as a
"distinctively Australian jurisprudence in public law".3 It is hardly necessary to say
that Sir Anthony Mason played a pivotal role in the development of the distinctive
jurisprudence, both through his membership of the Kerr Committee and his judgments
in the leading administrative law cases of the 1980s and 1990s.
Although remaining distinctive, Australian administrative law has nonetheless
undergone considerable change since the implementation of the Kerr Committee
proposals. In particular, the permissible boundaries of judicial review have moved,
depending on the emphasis (or lack of it) given by courts to the virtues of judicial
restraint. But during these movements two principles have been accepted, generally
without challenge, as fundamental in determining the proper scope of judicial review.
The first is that courts exercising powers of judicial review must not intrude into the
"merits" of administrative decision-making or of executive policy making. The second
is that it is for the courts and not the executive to interpret and apply the law,
1
2
3
Commonwealth Administrative Review Committee, Report (P P No 144, 1971) (Kerr
Committee Report) reprinted in R Creyke and J McMillan (eds), The Making of Commonwealth
Administrative Law (19%). This volume includes the reports of the Bland Committee (Final
Report of the Committee on Administrative Discretions (P P No 316, 1973) and the Ellicott
Committee (Prerogative Writ Procedures: Report of Committee ofReview (P P No 56, 1973».
The Administrative Appeals Tribunal Act 1975 (Cth) came into force on 1 July 1976;
Administrative Decisions Oudicial Review) Act 1977 (Cth) (ADJR Act) came into force on 1
October 1980; Freedom of Information Act 1982 (Cth) came into force on 1 December 1982.
R Creyke and J McMillan, "Administrative Law Assumptions... Then and Now", in
R Creyke and J McMillan (eds), The Kerr Vision of Australian Administrative Law-At the
Twenty-Five Year Mark (1998) at 1.
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including the statutes governing the power of the executive. These can be regarded as
the twin pillars of judicial review of administrative action in Australia.
While the solidity of the twin pillars is not often challenged, they may be more
fragile than is usually assumed. The United States experience indicates that neither is
an inevitable feature of administrative law in a federal system, even one which accepts
the doctrine of separation of powers. It may be, therefore, that the apparent
fundamentals of Australian administrative law are considerably less settled than
orthodox doctrine might suggest.
ASSUMPTIONS UNDERLYING THE NEW ADMINISTRATIVE LAW
Despite the undeniable importance of the work of the Kerr Committee, its work (like
that of all reformers) has not escaped criticism. Some commentators have pointed out
that the broad vision of the Kerr Committee was not matched by a similar breadth of
philosophy about the role of administrative law. 4 The Kerr Committee Report took as its
starting point that the "vast range of powers and discretions" capable of detrimentally
affecting the citizen required, as a matter of justice, that the individual should have
more adequate opportunities of challenging an adverse decision. 5 The Committee did
not think it "a matter of real debate" that there was "an established need for review of
administrative decisions".6 The Committee opted for a system of administrative review
described by Professor Pearce as:
heavily lawyer oriented and heavily rule oriented... very much the sort of package that it
could be expected that a committee of lawyers would produce?
In short, the Committee's proposals were designed in large measure to achieve
justice to individuals who were involved in disputes with public agencies, although
the Committee recognised that this objective had to be balanced against the need to
preserve the "efficiency of the administrative process".8
The Kerr Committee did not necessarily envisage fundamental changes in the role
played by courts in the exercise of powers of judicial review. Both for constitutional
and policy reasons, it accepted that the proposed Commonwealth Superior Court or
Administrative Review Court should be invested with a supervisory jurisdiction only.9
But the Committee envisaged that judges would be heavily involved in merits review
(as personae designatae). It also envisaged that the simplification of procedures
governing judicial review and the codification of the grounds of review would not
merely reduce complexity, but encourage recourse to the courts and "facilitate" judicial
review of administrative decisions. While the judicial function in relation to
administrative decision-making was to remain supervisory, the stage was set for
greater intervention by the courts in order to protect individuals dissatisfied with
decisions of public agencies.
4
5
6
7
8
9
Ibid at 5.
Kerr Committee Report, above n 1 at para 11.
Ibid at para 10.
D Pearce, "The Fading of the Vision Splendid" (1989) 58 Canb Bull of Pub Admin 15 at 18,
cited in R Creyke and J McMillan, above n 3 at 9.
Kerr Committee Report, above n 1 at para 12.
Ibid at para 247. See also Chapter 4.
2000
The Limits ofJudicial Review: Australia and the United States
317
In retrospect, it can be seen that the Kerr and Bland Committees reported at a time
(the early 1970s) when the "traditional" role of government, as the largely unchecked
regulator and dispenser of largesse, was at its height. Their reports largely pre-dated
the implementation of a philosophy of public sector managerialism and of other
measures designed to produce a more representative bureaucracy open to public
influence and more accountable to the community.10 They also pre-dated the full
flowering of corporatisation and privatisation, developments that have limited the
opportunities for traditional forms of judicial review of administrative action. 11 The
timing of the reports doubtless provides a partial explanation for the faith of their
authors in legal processes, including independent merits review, as the principal
mechanism for protecting the individual against the excesses of the bureaucratic state.
Underpinning this faith was a perception that the political constraints on the
conduct of the executive were simply too weak to afford adequate protection to the
individual. As Sir Gerard Brennan noted in an extra-judicial comment, the courts have
been prompted to widen the boundaries of judicial review in response to a perceived
diminution of legislative control over executive power.l 2 Similarly, Sir Anthony Mason
(in his judicial capacity) supported the extension of judicial review to decisions made
in the exercise of the Crown's prerogative by insisting that ministerial responsibility
cannot be an adequate safeguard for the citizen whose rights are affected by
governmental action. 13 These observations reinforce the view that the courts have seen
themselves as filling a gap created by the failure of political forms of accountability to
provide redress, or even comfort, to individuals adversely affected by government
decisions.
THE BOUNDARIES OF JUDICIAL REVIEW
It is not surprising, then, that in the aftermath of Parliament's endorsement of the
principles of judicial review of administrative action (by the enactment of the
Administrative Decisions Oudicial Review) Act 1977 (Cth», the courts expanded the
scope of judicial review. 14 The landmarks of this expansionary period are well-known.
The decision in Kioa v West,15 for example, laid the foundations for the pervasive
operation of the duty to afford procedural fairness, by holding that the duty applied
whenever public officials have the capacity "to destroy, defeat or prejudice a person's
rights, interests or legitimate expectations".16 The authoritative analysis by Mason CJ,
10
11
12
13
14
15
16
R Sackville, "The Boundaries of Administrative Law-The Next Phase" in R Creyke and
J McMillan, above n 3 at 89-90.
M Allars, "Private Law But Public Power: Removing Administrative Law Review from
Government Business Enterprises" (1995) 6 PLR 44.
Sir Gerard Brennan, "The Purpose and Scope of Judicial Review" in M Taggart (ed), Judicial
Review of Administrative Action in the 1980s (1988) at 19. Of course, legislative control over
(or at least scrutiny of) executive action varies depending on the political make-up of the
houses of Parliament, especially the upper house: cf Egan v Willis (1998) 195 CLR 424; Egan
v Chadwick (1999) 46 NSWLR 563.
The Queen v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 222.
See generally R Sackville, above n 10 at 93-97.
(1985) 159 CLR 550.
Annetts v McCann (1990) 170 eLR 596 at 598 per Mason el, Deane and McHugh JJ. The
scope of the duty was expanded further by the recognition in Minister for Immigration and
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in Minister for Aboriginal Affairs v Peko Wallsend Ltd,17 of the circumstances in which a
decision-maker will be held to have failed to take into account a relevant consideration,
opened the way to close scrutiny of administrative decisions both on that ground and
the counterpart ground of taking into account irrelevant considerations. 18 Courts were
prepared to adopt robust techniques of statutory construction to control the exercise of
apparently broad discretionary powers by administrative decision-makers. 19
Once the courts adopted a more interventionist role in relation to executive action,
difficult issues were swiftly brought into focus. For example, judicial review is often
seen as antithetical to administrative efficiency.20 Courts exercising powers of judicial
review may be forced to the pragmatic recognition that an orderly and expeditious
decision-making process should not be placed at risk by excessive intervention on the
part of the courts. 21 It may also become apparent, although the point is perhaps not
frequently articulated in judicial decisions,22 that an expansive approach to judicial
review will impose a burden on courts that they are ill-equipped to handle. And
increased intervention by the courts in executive decision-making is likely to enliven
debate about the proper limits of the functions of courts exercising the judicial power
of the Commonwealth.
These factors have contributed to a marked retreat from the broadest conceptions of
judicial review in Australia. 23 Considerations of administrative efficiency influenced
the High Court's relatively narrow construction of the expression "decision of an
administrative character II in the Administrative Decisions ijudicial Review) Act 1977.24
Similar considerations prompted the courts to adopt a more cautious approach to the
requirements of procedural fairness than the earlier authorities might have
suggested. 25 More recently, the High Court has been willing to accept that Parliament
means what it says, for example when it curtails the jurisdiction of the Federal Court to
review particular categories of administrative decisions. 26 In the same spirit, the High
Court has upheld the constitutional validity of legislation which permits a federal
court to decide only specified and limited aspects of a justiciable controversy between
17
18
19
20
21
22
23
24
25
26
Ethnic Affairs v Teoh (1995) 183 CLR 273 that ratification of a treaty could give rise to a
legitimate expectation that the Minister would act in conformity with it.
(1986) 162 CLR 24 at 39-42.
For example, Commonwealth v Pharmacy Gujld of Australia (1989) 91 ALR 65 (Shephard and
Ryan JJ, Woodward J dissenting).
For example, Chaudhary v Minister for Immigration and Ethnic Affairs (1994) 49 FCR 84 (FC);
Eshetu v Minister for Immigration and Multicultural Affairs (1997) 71 FCR 300 (FC) reversed by
the High Court Minister for Immigration and Multicultural Affairs v Eshetu (1999) 162 ALR 577.
II Efficiency II in administrative decision-making is itself an ambiguous concept. It can be
defined to include adherence to procedural safeguards and the making of correct decisions:
P Wilenski, "Social Change as a Source of Competing Values in Public Administration"
(1988) 47 Aus Jof Pub Admin 213 at 218.
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 337 per Mason CJ.
Compare S Breyer, "Judicial Review of Questions of Law and Policy" (1986) 38 Admin L Rev
363 at 390 pointing to the practical difficulty of courts closely scrutinising agency decisions
involving thousands of pages of material.
R Sackville, above n 10 at 98-101.
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321.
See, for example, New South Wales v Canellis (1994) 181 CLR 309 reversing Canellis v Slattery
(1994) 33 NSWLR 104.
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 162 ALR 577.
2000
The Limits of Judicial Review: Australia and the United States
319
an individual and the executive. 27 Despite the narrowing of the scope of judicial
review, some apparently fundamental principles of administrative law have appeared
to remain constant. These principles--the twin pillars of judicial review--are closely
associated with the High Court's interpretation of Chapter III of the Constitution.
THE FOUNDATIONS FOR THE lWIN PILLARS
The High Court has insisted on the separation of Chapter III judicial power from other
functions of government. Chapter III jurisprudence in Australia has been heavily
influenced by the Court's assessment of whether the discharge of a particular function
by a court exercising federal jurisdiction might "sap public confidence in the
judiciary"28 and for that reason be incompatible with the exercise of judicial power. In
Wilson v Minister for Aboriginal Affairs, for example, the High Court considered that a
Ministerial request to a Chapter III judge to prepare a report "as an integral part of the
process of the Minister's exercise of power" exposed the judge to the necessity of
making decisions that were "political in character".29 The critical constitutional defect
in that request, and in the judge's acceptance of it, was that these events were seen by
the High Court as impairing public confidence in the judiciary. Similarly, in Kable v
Director of Public Prosecutions, the draconian preventative detention powers conferred
by the Community Protection Act 1994 (NSW) were said to "compromise the integrity
of the Supreme Court of New South Wales" (a court exercising the judicial power of
the Commonwealth) and to threaten "public confidence in the [judicial] process".30
The High Courtts repeated emphasis on the necessity to preserve public confidence
in the judicial process is of considerable significance for judicial review of executive
action. At one level, the significance is practical, rather than theoretical. The courts I
powers of judicial review, although legitimised and endorsed by legislation, are by no
means popUlar among opinion leaders or, for that matter, the community generally. Sir
Anthony Mason has confessed to "some feelings of disappointment" that the benefits of
a simplified and more comprehensive system of judicial review have not been more
evident to administrators and lawyers alike. 31 More significantly, as Sir Anthony
recognised, the lack of enthusiasm for lawyers and legal processes (especially judicial
review) is not confined to administrators, but extends to business people, union
officials and, above all, politicians. 32 To this must be added the obvious point that the
exercise of powers of judicial review will frequently place the courts in the position of
overriding, if only temporarily, important decisions or policies of representatives of
elected governments. It is therefore hardly surprising that the exercise of such powers
27
28
29
30
31
32
Abebe v Commonwealth (1999) 162 ALR 1.
Wilson v Minister for Aboriginal and Torres Strait Islander Affairs (1996) 189 CLR 1 at 12 per
Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ.
Ibid at 18-19.
Kable v Director of Public Prosecutions (1996) 189 CLR 51 at 107 per Gaudron J. Despite the
views of the High Court, one suspects that a very substantial majority of the population of
New South Wales, if asked, would express approval of legislation designed to keep an
apparently dangerous person in custody beyond the period of his sentence, with or
without a further conviction.
Sir Anthony Mason, "Reflections on the Development of Australian Administrative Law" in
R Creyke and J McMillan (eds), above n 3 at 122.
Ibid at 123.
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often generates criticism that is not necessarily couched in terms likely to increase
public confidence in the judiciary.33
At another level the concept of public confidence in the judicial process raises issues
of principle, although it may be that practical considerations can never be entirely
divorced from questions of principle. 34 The High Court has been acutely conscious of
the need to protect and preserve the legitimacy of the role played by the courts in
judicial review of executive action. This is illustrated by the reaffirmation in Minister
for Immigration and Ethnic Affairs v Wu Shan Liang35 of the principle that judicial review
of an administrative decision cannot be turned into a reconsideration of the merits of
the decision. 36 The Court cited a well-known passage from the judgment of Brennan J
in Attorney-General (NSW) v Quin37 in support of its warning that courts must not use
judicial review to trespass into the field reserved to the decision-maker. It is Brennan
J's judgment which provides the most detailed principled justification for the
proposition that "proper principles" preclude the courts undertaking "merits" review of
administrative decisions.
In Attorney-General v Quin, Brennan J made five related points: 38
• First, the essential warrant for judicial supervision of administrative action is the
declaration and enforcement of the law affecting the extent and exercise of power.
The duty and jurisdiction of courts in Australia are reflected in the famous words
of Marshall CJ in Marbury v Madison: "It is, emphatically, the province and duty of
the Judicial Department to say what the law is." 39
• Secondly, the court's duty and jurisdiction does not go beyond the declaration and
enforcement of the law which determines the limits of the repository's power:
33
34
35
36
37
38
39
See, as one example among many, the criticism of the decision in Lam v Minister for
Immigration and Multicultural Affairs (Federal Court of Australia, Sackville J, 4 March 1998,
unreported): B Walkley, "$3m Heroin Cache-But He Can Stay", Daily Telegraph 5 March
1998 at 5 and Editorial, Daily Telegraph, 5 March 1998 at 10. In Lam, the decision of the
Administrative Appeals Tribunal deporting the applicant was set aside on the principle of
Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273, since the Tribunal had
failed to alert the applicant to its intention not to give effect to the best interests of the
applicant's child as a "primary consideration" consistently with the requirements of Art 3 of
the United Nations Convention on the Rights of the Child. There was no appeal from the
decision of the Federal Court. The Tribunal subsequently set aside the decision to deport
the applicant: Re Lam and Minister for Immigration and Multicultural Affairs (1999) 28 AAR
431. On the tensions generated by the Federal Court's jurisdiction to review immigration
decision-making, see generally J McMillan, "Federal Court v Minister for Immigration"
(1999) 22AIAL Forum 1.
Compare R A Posner, The Problematics ofMoral and Legal Theory (1999) ch4.
(1996) 185 CLR 259.
Ibid at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ. The Court also accepted the
need for the reviewing court to adopt a "beneficial construction" of the reasons of the
decision-maker, so that the reasons are "not construed minutely and finely with an eye
keenly attuned to the perception of error". The language approved by the High Court is
that of a Full Court of the Federal Court in Collector of Customs v Pozzolanic (1993) 43 FCR
280 at 287.
(1990) 170 CLR 1 at 35-36.
Ibid at 35-38.
1 Cranch 137 at 177; 5 US 87 at 111 (1803).
2000
The Limits ofJudicial Review: Australia and the United States
321
H [in the course of review], the court avoids administrative injustice or error, so be
it; but the court has no jurisdiction simply to cure administrative injustice or error.
The merits of administrative action, to the extent that they can be distinguished
from legality, are for the repository of the relevant power and, subject to political
control, for the repository alone.
The consequence is that the scope of judicial review must be defined not in terms of
the protection of individual interests but in terms of the extent of power and the
legality of its exercise. In Australia, the modem development and expansion of the
law of judicial review of administrative action have been achieved by an
increasingly sophisticated exposition of implied limitations on the extent or the
exercise of statutory power, but those limitations are not calculated to secure
judicial scrutiny of the merits of a particular case.
Thirdly, the doctrine of "Wednesbury unreasonableness"40 is founded on the
implied intention of the legislature that a power be exercised reasonably. While the
doctrine provides, in one sense, an opportunity for review on the merits, the
limitation on the extent of the statutory power is "extremely confined".
• Fourthly, in order for the courts to declare and enforce the law, it is necessary to
answer the question: what is the law? That question must be answered by the
courts themselves. In doing so, the role of the courts is not to balance competing
interests of the public at large and the interests of individuals, since the courts
cannot evaluate the competing policy considerations. Moreover, if the courts could
review the merits, the exercise of administrative power might be skewed in favour
of the rich, the powerful or the simply litigious.
• Finally, if the courts were to review administrative decisions on the ground that
they were unfair on the merits, the courts would be doing the very thing entrusted
to the repository of the administrative power, namely choosing among courses of
action on which reasonable minds might differ. The courts must recognise the
autonomy of the three branches of government within the limits of their own
competence and thus the legal effectiveness of the due exercise of power by the
other branches of government. To do otherwise would be to put the legitimacy of
the courts at risk.
The second point made by Brennan J is particularly important. It embodies one of
the pillars of Australian administrative law: courts are not concerned with the merits of
administrative decisions, but only with their legality. Brennan 1's observations make
explicit that the rationale for judicial review of administrative action in Australia is not
the protection of individuals against administrative error. The rationale lies, rather, in
the vindication of the legality of the administrative decision-making process. It follows
that an individual who has legitimate complaints about the quality of an adverse
administrative decision is not entitled, by reason of that fact alone, to judicial review of
the decision. Generally speaking, an error of fact, for example, even if basic to the
decision, is not the concern of the court. Equally, an individual who appears to have no
genuine complaint concerning the substance of an adverse decision may succeed in
setting it aside if there have been defects in the decision-making process. Indeed, a
successful applicant in the court may be someone who appears to have no II merits" at
all.
•
40
ADJR Act, s 5(2)(g).
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One consequence of this approach is that courts reviewing administrative decisions,
if they adhere stringently to the legality-merits dichotomy, will rule even against
claimants who appear to be the victims of egregious injustice. 41 Another is that
apparently undeserving claimants will succeed in the courts, if they can point to
deficiencies in the decision-making process recognised as a basis for setting aside the
relevant decisions. In few areas of the law are courts not merely unconcerned with
substantive injustice, but positively enjoined from taking into account the justice of the result
between the parties in an individual case. If the High Court is truly concerned with
maintaining public confidence in the judicial process, it is far from clear that this kind
of judicial self-restraint serves to achieve the objective which forms the cornerstone of
current Chapter ill jurisprudence.
It should be added that, although both Attorney-General v Quin and Minister for
Immigration and Ethnic Affairs v Wu Shan Liang were concerned with judicial review of
administrative decisions, the same philosophy of restraint applies to judicial review of
executive policy-making. Ordinarily, the issue arises in the context of challenges to
subordinate legislation embodying policy determinations by agencies or statutory
authorities. While the courts have been prepared to strike down regulations on the
grounds of unreasonableness or want of proportionality,42 these tests are interpreted
narrowly. Thus in South Australia v Tanner the High Court emghasised that a court
must not "impose its own untutored judgment on the legislator". It is not enough that
the court thinks a regulation is inexpedient or misguided: it must be "S0 lacking in
reasonable proportionality as not to be a real exercise of the power II • This reflects the
principle that subordinate legislation will be declared invalid only if the court
concludes that the particular rule or regulation could not have been within the
contemplation of Parliament when authorising subordinate legislation. 44
The first and fourth points made by Brennan J in Attorney-General v Quin
summarise the effect of the second pillar of Australian administrative law. In Australia,
it has been thought to be virtually axiomatic that, because the courts are responsible for
declaring the law, they must bear the exclusive responsibility for performing that task.
This is the other side of the judicial restraint coin. While executive decision-makers
must ascertain the law insofar as it bears on the particular decision to be made, their
view as to the meaning of the legislation governing their powers and functions counts
for nothing as far as the courts are concerned. It is the judges who determine the
meaning of the legislation, uninfluenced by the views of administrative decisionmakers. This is so notwithstanding that the construction of the governing legislation
may turn on technical, economic or social considerations that the administrative
agencies might have considered at length (or would consider if they had the
41
42
43
44
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356 per Mason CJ (want of
logic is not synonymous with error of law); Minister for Immigration and Multicultural Affairs
v Epeabaka (1998) 84 FCR 411 (FC) at 420-421.
Minister for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 (FC) at 574-578 per
Gummow J; P Bayne, "Reasonableness, Proportionality and Delegated Legislation" (1993)
67 ALJ448.
South Australia v Tanner (1989) 166 CLR 161 at 168 per Wilson, Dawson, Toohey and
GaudronJJ.
Minister for Primary Industries and Energy v Austral Fisheries Pty Ltd (1993) 40 FCR 381 (FC) at
384 per Lockhart J.
2000
The Limits ofJudicial Review: Australia and the United States
323
opportunity). Nor does it matter that the courts may not be as well equipped as the
agencies to investigate and make judgments on these issues. 45
There is something of a paradox here. Australian courts defer to decision-makers on
factual and policy questions, even to the point of upholding obviously erroneous
decisions. Yet they pay no attention to an agency's interpretation of the legislation it
administers, even if the agency is peculiarly well-placed to analyse the issues. The
orthodox answer to the paradox is that each of the twin pillars is a necessary
consequence of the nature of judicial power exercised by Chapter III courts. And the
nature of judicial power is ultimately determined by what maintains confidence in the
judicial process. But is it true that each of the twin pillars is a necessary consequence of
the nature of judicial power exercised by Chapter III courts? The experience in the
United States suggests that it is not. To that experience I now tum.
THE UNITED STATES EXPERIENCE
The Supreme Court of the United States has adopted a strikingly different approach to
the scope of judicial review of executive action than that accepted by the High Court.
Notwithstanding the provenance of MarbunJ v Madison, the Supreme Court has
followed a principle of deference to the executive on questions of statutory
construction. Yet by means of the so-called "hard look ll doctrine, it has simultaneously
been prepared to scrutinise closely what in Australia would plainly be regarded as the
II merits" of agency decisions. The situation in the United States is itself paradoxical; but
the nature of the paradox is the mirror image of that in Australia.
Statutory construction
The leading case on the principle of deference to the executive on questions of
statutory construction is Chevron USA, Inc v Natural Resources Defense Council, Inc. 46
Chevron is regarded as one of the most important Supreme Court cases marking out the
relationship between judicial review and administrative decision-making, especially by
agencies responsible for formulating and applying regulatory controls in areas such as
environmental protection, anti-discrimination, safety in the workplace and consumer
protection. 47 It has been said, with perhaps a touch of nationalistic hyperbole, that
Chevron may be the most frequently cited case of all time. 48
In Chevron, the Court was concerned with the Clean Air Act which required States
not meeting federal quality requirements to establish a permit program regulating
"new or modified stationary sources of air pollution". The legislation provided only a
general definition of the expression "stationary source". In 1981 the Environment
Protection Agency (EPA) issued regulations defining a "stationary source" to mean a
45
46
47
48
For example, is a court better equipped than an agency to determine whether a particular
bulk iron ore rail track transportation service should be regarded as a "service" as defined
by s 44B of the Trade Practices Act 1974 (Cth), so that other iron ore producers are entitled
to gain access to it? Cf Hammersley Iron Pty Ltd v National Competition Council [1999] FCA
867.
467 US 837 (1984).
See, for example, Cass R Sunstein, "Law and Administration After Chevron" (1990) 90 Colum
L Rev 2071 at 2073-2075; S Breyer, above n 22 at 372-373.
S G Breyer, R B Stewart, Cass R Sunstein and M L Spitzer, Administrative Law and Regulatory
Policy (4th ed 1998) at 256.
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plant, rather than a pollution-emitting device within a plant. The effect was to permit a
polluter to add pollution-emitting devices within a plant, so long as there was no
increase in aggregate emissions from the plant.
The principle governing the EPA's construction of the legislation was expressed by
Stevens J (delivering the opinion of the Court) as follows:
When a court reviews an agency's construction of the statute which it administers, it is
confronted with two questions. First, always, is the question whether Congress has
directly spoken to the precise question at issue. If the intent of Congress is clear, that is
the end of the matter; for the court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress. If, however, the court determines Congress
has not directly addressed the precise question at issue, the court does not simply impose
its own construction on the statute, as would be necessary in the absence of an
administrative interpretation. Rather, if the statute is silent or ambiguous with respect to
the specific issue, the question for the court is whether the agency's answer is based on a
permissible construction of the statute.49
By positing a rule of deference to agency interpretation where Congress has not
directly spoken on the issue, Chevron has been portrayed by some commentators as a
kind of "counter-Marbury". 50 Other commentators contend that Chevron has been
frequently honoured in the breach rather than the observance or that it has merely
provided a doctrinal basis for a construction of legislation that would have been
adopted in any event. 51 It has also been argued that Chevron has been consistently
circumvented by the Supreme Court's "hypertextualism"-that is, the use of textualist
techniques of construction that permit the attribution of "plain meaning" to statutory
language that most observers would characterise as ambiguous or even internally
inconsistent. 52 Whatever criticisms might be made of the Chevron line of authority, the
fact is that the Supreme Court has frequently applied Chevron in order to uphold
agency interpretations. Two recent cases illustrate its application, although many
others might have been chosen.
United States v O'Hagan53 was concerned with s 14(e) of the Securities Exchange Act
1934 (US)/ which made it unlawful for a person "to engage in any fraudulent... acts or
practices in connection with any tender offer". The subsection also empowered the
Securities and Exchange Commission (SEC), by rules and regulations "to define, and
prescribe means reasonably designed to prevent, such acts and practices as are
fraudulent". Acting under this power, the SEC forbade traJing on the basis of material,
non-public information regardless of whether the trader owed a fiduciary duty to
respect the confidentiality of the information. The Eighth Circuit Court of Appeals
struck down the rule on the basis that s 14(e) did not authorise the SEC to create its
own definition of "fraud". The Court considered that the statutory expression retained
a fixed meaning and did not extend to trading unless it involved a breach of trust or
confidence.
49
50
51
52
53
467 US 837 at 842-843 (1984) (citations omitted).
C R Sunstein, above n 47 at 2075.
T W Merrill, "Judicial Deference to Executive Precedent" (1992) 101 Yale LJ 969 at 980-993.
See generally S G Breyer and others, above n 48 at 250-345.
R J Pierce Jr, "The Supreme Court's New Hypertextualism: An Invitation to Cacophony and
Incoherence in the Administrative State" (1995) 95 Colum L Rev 749 at 752.
138 L Ed (2d) 724 (1997).
2000
The Limits ofJudicial Review: Australia and the United States
325
Ginsburg J, for the majority of the Supreme Court, reversed the decision of the
Court of Appeals, holding that the SEC's rule making authority gave it "latitude" to
prohibit acts not themselves fraudulent if the prohibition was reasonably designed to
prevent fraudulent acts.54 The SEC's judgment on these questions was owed more than
mere deference or weight. According to Chevron, the SEC's assessment was to be given
controlling weight unless it was arbitrary, capricious or manifestly contrary to the
statute. On this basis the rule was a proper exercise of the SEC's prophylactic power.
It will be seen that both Chevron and O'Hagan involved questions as to the validi~
of subordinate legislation. In Immigration and Naturalization Service v Aguirre-Aguirre,
the question concerned the correctness of a particular deportation decision made by
the Board of Immigration Appeals (BIA). The BIA had to construe the Immigration and
Nationality Act which, using language derived from the Convention Relating to the
Status of Refugees,56 authorised the Attorney-General to deport an alien if he or she
determined that there were
serious reasons for considering that the alien had committed a serious non-political crime
outside the United States [prior to arrival in the United States].
The BIA decided that a Guatamalan citizen was not immune from deportation despite
fearing persecution in that country by reason of his political activities, because he had
committed a "serious non-political crime" before his entry into the United States. The
BIA rejected a construction of the legislation that would have allowed the alien's
criminal conduct to be weighed against the nature of the persecution he would face if
returned to Guatemala. The Ninth Circuit Court of Appeals, relying on the analysis
contained in the so-called II UN Handbook",57 took a contrary view and set aside the
BlAIs decision. This is, of course, the kind of statutory construction issue that is
addressed by Australian courts on almost a daily basis.
Kennedy J, giving the opinion of the Supreme Court, held that the Court of Appeals
had failed to accord the required degree of deference to the interpretation adopted by
the Attorney-General and the BIA. Chevron was applicable because the AttorneyGeneral was responsible for determining whether the statutory conditions for
withholding deportation had been met. Moreover, judicial deference to the Executive
was especially appropriate in the immigration context, where officials exercise
sensitive functions involving questions of foreign relations. Since the statute was silent
with respect to the particular issue of construction and the BIA's determination was
based on a fair and permissible reading, it had to stand. 58
54
55
56
57
58
Ibid at 754.
143 L Ed (2d) 590 (1999).
Art 1(F)(b).
United Nations High Commissioner for Refugees, Handbook on Procedures and Criteria for
Determining Refugee Status (1979). The Handbook is frequently referred to in Australian
decisions, although its value as an aid to construction is generally regarded as limited: Chan
v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 392 per Mason CJ.
It must be said that it is not easy to reconcile INS v Aguirre-Aguirre with the Court's earlier
decision in Immigration and Naturalization Service v Cardoza-Fonseca 480 US 421 (1987). There
the Court rejected the BIA's construction of the asylum statute which would have required
an applicant for asylum to demonstrate the !lclear probability II that he or she would face
persecution if returned to the country of nationality.
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Volume 28
What, then, is the justification as a matter of principle for courts in the United States
deferring to agency interpretations of governing legislation? This question has
generated a substantial literature. Sometimes pragmatic answers are given. For
example, some commentators suggest that the courts defer because agencies have built
up specialist expertise in their particular areas and indeed have often assisted in
drafting the legislation. 59 A related contention is that agencies are better equipped to
make the policy judgments required to resolve ambiguities in the expression of
Congressional will.60
In an "influential essay",61 Justice Scalia of the Supreme Court of the United States
rejects these approaches and offers an alternative rationale. In his view, the theoretical
justification for the Chevron doctrine is that Congress has determined to leave the
resolution of the construction question to the agency itself. Chevron, in effect, creates a
presumption that Congress intends ambiguity in the governing legislation to be
resolved by the agency. Congress therefore
knows that the ambiguities it creates, whether intentionally or unintentionally, will be
resolved, within the bounds of permissible interpretation, not by the courts but by a
particular agency, whose policy biases will ordinarily be known. 62
Implicit in this analysis is a recognition that the process of statutory construction
involves choices among alternatives by reference to policy considerations and that
agencies are at least as well-equipped as courts to make the necessary policy
judgments. In this sense, the Chevron doctrine represents a triumph for realist
jurisprudence.
Chevron has no shortage of critics in the United States. None of the critics appears to
suggest, however, that courts will lose legitimacy nor that public confidence in the
judiciary will be destroyed, if the courts do not retain exclusive responsibility for
interpreting legislation. On the contrary, the Chevron doctrine seems to show that
deference can be paid to administrators' determinations on questions of statutory
construction without abrogating the judicial function or the authority of the legislature.
The doctrine is also a clear demonstration that the principle of Marbury v Madison,
despite its enthusiastic reception in Australia, does not necessarily require courts to be
exclusively responsible for construing statutes which confer decision or rule-making
authority on the executive.
The "Hard Look" doctrine
The counterpoint to the Chevron principle in the United States is the so-called "hard
look" doctrine, employed by federal courts in the United States when reviewing agency
decisions, especially those involving rule-making functions. The key provision is
59
60
61
62
S Breyer, above n 22 at 368-369 (describing, but not necessarily endorsing, the argument).
This article was written when Justice Breyer (now of the Supreme Court) was a Judge of the
US Circuit Court of Appeals for the First Circuit.
A Scalia, "Judicial Deference to Administrative Interpretations of Law" [1989] Duke LJ 511 at
514-516. Justice Scalia rejects this rationale, on the ground that policy evaluation is "part of
the traditional judicial tool-kit" (at 515).
S G Breyer and others, n 48 above, at 257.
A Scalia, above n 60 at 517. Sunstein sees Chevron as resting on the desirability of forcing
Congress to speak with clarity if it wishes to avoid administrative interpretation of statutes:
Cass R Sunstein, "Must Formalism Be Defended Empirically?" (1999) 66 U Chicago L Rev 636
at 656.
2000
The Limits ofJudicial Review: Australia and the United States
327
s 706(2)(A) of the Administrative Procedure Act 1946 (APA) which requires a
reviewing court to
hold unlawful and set aside agency action, findings, and conclusions found to be
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
This language has provided the springboard for what in Australia would be
understood as merits review of agency policy decisions.
The "arbitrary and capricious" standard, like Wednesbury unreasonableness in
Australia, could have been read as justifying judicial intervention only in narrowly
defined circumstances. But in a series of decisions, of which the most important are
Citizens to Preseroe Overton Park, Inc v Volpe 63 and Motor Vehicle Manufacturers'
Association v State Farm Mutual Automobile Association (the so-called "airbags" case),64
the Supreme Court has given its imprimatur to a broad reading of the standard laid
down by the APA.
In Overton Park, a challenge was made to a decision by the Secretary of
Transportation to authorise the use of federal funds to finance the construction of an
interstate highway through a public park in Memphis, Tennessee. The relevant statute
prevented the Secretary from authorising the expenditure if a "feasible and prudent
alternative exists". The Court held that the Secretary's decision was entitled to a
presumption of regularity, but that the presumption could not "shield his action from a
thorough probing, in-depth review ll • The reviewing court, in order to uphold the
Secretary's decision, had to be able to find that the Secretary could have reasonably
believed that there were no feasible alternatives to the proposed construction of the
highway. The court's role was to consider whether the decision was based on a
consideration of all relevant factors and whether there had been "a clear error of
judgmentll • In the result, the Supreme Court remanded the case to the District Court for
plenary review of the Secretary's decision since there was insufficient material before it
to enable it to identify the factors that motivated the Secretary's decision.
While the Supreme Court has used more restrained and traditional language in
other cases,65 the analysis in Overton Park encouraged federal courts in the United
States to scrutinise agency policy decisions very carefully. This approach was
reinforced by State Farm. In that case, a majority of the Supreme Court held that the
National Highway Traffic Safety Administration (NHTSA) had acted arbitrarily and
capriciously in revoking a requirement under the Motor Vehicle Safety Act of 1966 that
new vehicles be equipped with passive restraints to protect the safety of occupants. 66
The requirement had a IIcomplex and convoluted" history over more than a decade,
during which it had been imposed, amended, rescinded, reimposed and again
rescinded by the NHfSA.
The Supreme Court considered that the NHfSA, despite its lengthy consideration
of the issue, had failed to present an adequate explanation for rescinding the passive
restraint standard. The Court characterised the rescission as unreasonable, for a
63
64
65
66
401 US 402 (1971).
463 US 29 (1983).
Compare Baltimore Gas and Electric Co v National Resources Defense Council Inc 462 US 87 at
103 (1983), referring to the need for the reviewing court to defer to factual determinations
within an agency's area of expertise.
The case was decided by a majority of 5:4.
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Volume 28
number of reasons. These included the agency's insufficiently explained rejection of
certain studies relating to the usage of seatbelts and its failure to consider alternatives
to rescission of the standard. In what might be thought to be an understatement,
Justice Breyer has described State Farm as exhibiting a "fairly strict judicial attitude
towards review of substantive agency pOlicy".67 As he points out, the Court conducted
a thorough and searching review of the agency's action under the "arbitrary and
capriciousII standard in order to undermine the plausibility of the justification
proffered by the NHTSA for its actions. 68
The IIhard look ll doctrine has been said to reflect the concerns of federal courts in the
United States that powerful agencies have been IIcaptured ll by particular interest
groups, frequently the very interests the agency is meant to regulate. 69 The courts
applying the doctrine have, for the most part, been careful not to substitute their
judgment for those of the agencies. In that sense they have continued to defer to the
agency's ultimate decision-making authority. Even so, in practical terms they have
required agencies to develop detailed records that explain the bases for their decisions
and to consider carefully the evidence presented to them. It is not surprising that the
effective outcome of a successful challenge is often the death of the rule or policy
promoted by the agency.70
Critics of the hard look doctrine have emphasised the practical difficulties inherent
in a stringent standard of review of substantive agency decisions. 71 They have pointed
to the limitations of the judicial process for investigating and assessing the vast body of
technical and conflicting material gathered by or presented to the relevant agency.
They have also criticised the fact that judicial review of the merits of agency decisions
creates an incentive for agencies to maintain the status quo. For example, an agency
faced with apparently unending demands by courts for more information and more
elaborate reasoning may simply abandon its attempts at reform. Alternatively, the
spectre of judicial review of substantive policy may divert the agency's scarce
resources to satisfying the courts I requirements and away from the regulatory job the
agency is meant to perform.
Like Chevron, the hard look doctrine has its share of critics. Some of the criticisms
focus on the practical difficulties confronting courts when they attempt to review
complex policy questions. But the critics do not suggest that merits review of policy
decisions will delegitimise the courts or destroy public confidence in them. The calls
for change rest on more pragmatic considerations.
WHAT IS TO BE LEARNED?
From an Australian perspective, there is a nice irony in the conclusions reached by
Justice Breyer in a survey of judicial review of executive action in the United States.
Writing in 1988, he detected an lIimportant anomaly II in the law of judicial review of
administrative decision-making. He identified the anomaly as follows:
67
68
69
70
71
5 Breyer, above n 22 at 384.
Ibid at 385-387.
5 G Breyer and others, above n 48 at 346-347.
The highway proposal in Overton Park never went ahead. While, in the aftermath of State
Farm, the NlITSA ultimately adopted a passive restraint rule: ibid at 362-363 and 382.
5 Breyer, above n 22 at 388 ff.
2000
The Limits afJudicial Review: Australia and the United States
329
The law requires courts to defer to agency judgments about matters of law, but it also
suggest that courts conduct independent, "in-depth" review of agency judgments about
matters of policy. Is this not the exact opposite of a rational system? Would one not
expect courts to conduct a stricter review of matters of law, where courts are more expert,
but more lenient review of matters of policy, where agencies are more expert?72
Justice Breyer saw the then current state of the law as unstable. He therefore
considered that change was likely. One approach was to accord agency decisions
greater deference,73 but this carried with it the danger that agencies would be largely
unchecked by the judicial branch. He characterised the problem as one of "tailoring the
court's legal obligations... to their institutional capacities and strengths".74 The solution
to the problem he largely left to others.
In Australia, as I have pointed out, the anomaly is quite the reverse of that
identified by Justice Breyer. Australian courts have insisted on exclusive authority to
declare and enforce the law, but have generally deferred almost completely to
executive decision-makers on the "merits". There may be good reasons why Australian
courts would choose not to embrace fully the Chevron and "hard look" doctrines. But
this is not the same thing as saying that the twin pillars of Australian administrative
law can never be challenged.
It is by no means out of the question that Australian courts will borrow from the
United States experience. For example, there have been hints from time to time in
Australia that courts might consider deferring to agency interpretation of statutory
language that require reference to technical, economic or social considerations. As
Peter Bayne has pointed out in one of the few Australian commentaries to have
referred to Chevron,75 Dixon J in R v Hickman; Ex parte Fox76 characterised as
"unfortunate" the fact that the Court had been left to ascertain as best it could the
denotation of the very indefinite expression "coal mining industri'.77 His Honour
expressed the view that:
From a practical point of view, the application of the Regulations should be determined
according to some industrial principle or policy and not according to the legal rules of
construction and the analytical reasoning upon which the decision of a court of law must
rest.78
More recently there have been tentative indications that the High Court may be
prepared to contemplate something less than a unyielding application of Marbury v
Madison to judicial review of administrative decisions. Ironically enough, in Minister for
Immigration and Ethnic Affairs v Wu Shan Liang itself, the joint judgment emphasised
that, under the Migration Act, an applicant's status as a refugee depended on the
Minister (or his delegate) being satisfied that the applicant met the criteria stated in the
Refugees Convention. The Court considered that the subjective nature of the
72
73
74
75
76
77
78
Ibid at 397.
For an example of a restrained approach, see the opinion of Posner} in American Dental
Association v Martin, 984 F 2d 823 (7th Cir 1993).
S Breyer, above n 22 at 398.
P Bayne, "Fuzzy Drafting and the Interpretation of Statutes in the Administrative State"
(1992) 66 ALJ 523 at 524.
(1945) 70 CLR 598.
The question concerned the jurisdiction of a Local Reference Board established under the
National Security (Coal Mining Industry Employment) Regulations.
(1945) 70 CLR 598 at 614-615 per Dixon}.
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Volume 28
administrative decision was relevant in deciding whether the Minister's delegate had
or had not applied the correct criteria. In substance, the Court took the view that the
delegate's reasons were not lightly to be understood as failing to undertake the degree
of speculation required by the definition of "refugee" in the Refugees Convention. The
judgment did not expressly take up the point made by Dixon J in Hickman.
Nonetheless, it can be read as indirectly acknowledging the desirability of according
some latitude to an administrative decision-maker required to apply a statutory
standard. 79
No Australian case has gone so far as to suggest that the Chevron doctrine should be
adopted in this country. But there seems to be no insuperable obstacle to the High
Court choosing to adopt the doctrine or some variation of it. As Peter Bayne has
observed,80 there is a well established stream of authority in Australia dealing with the
effect of privative clauses which protects an administrative decision, provided it is a
bona fide attempt to exercise the relevant power. The decision must relate to the subject
matter of the legislation and must be reasonably capable of reference to the power
given to the body.81 This line of authority provides some support for the view that
Parliament is able to commit interpretative functions to an administrative agency and
that the courts might acquiescence in such an approach.
Similarly, it is open to the High Court to move towards closer scrutiny of the merits
of decisions made by the executive. The tools are already there. They include
WednesbunJ unreasonableness and the doctrine of proportionality. All that is required
is for a more liberal interpretation of established principles. Indeed, the recent
reaffirmation by the High Court of the sanctity of the border between legality and
merits review has been prompted by the Federal Court incursion over the border. 82 As
the United States experience shows, borders can be moved.
CONCLUSION
The most significant lesson to be learned from the experience of judicial review of
administrative action in the United States is that even the most apparently
fundamental principles deserve reappraisal from time to time. It may be that the
reappraisal will ultimately serve to affirm those principles and the values underlying
them. But that will be because they continue to serve important policy objectives, not
because they are immutable.
79
80
81
82
See also Minister for Immigration and Multicultural Affairs v Eshetu (1999) 162 ALR 577 at 607609 per Gummow J.
P Bayne, above n 75 at 525.
R v Hickman; Ex parte Fox (1945) 70 CLR 598 at 614.
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; Minister for
Immigration and Multicultural Affairs v Eshetu (1999) 162 ALR 577; Guo v Minister for
Immigration and Ethnic Affairs (1997) 191 CLR 559. See J McMillan, above n 33.