Legislation in the contemporary administrative state: an Australian perspective on Loper Bright
16.8.2024
Recent decisions of the United States Supreme Court (SCOTUS) seem to have thrown the administrative state into crisis. A suite of recent cases have limited executive power in important ways—for example, by requiring executive action to be authorised by far more detailed legislation than has previously been required, or preventing executive agencies from performing certain functions that they have been allowed to in the past. These include the momentous decision in Loper Bright Enterprises v Raimondo, 603 US ___ (2024) (Loper Bright)—in which the SCOTUS effectively overturned the doctrine of Chevron deference.
Why should Australian public lawyers be interested in these developments? What light do they cast on our own legal system, and its particular strengths and pathologies? This post explores these issues, beginning with the complex legislative framework that sustains administrative government here.
The Australian legislative framework
Legislation in Australia is very complex. By complex, I mean difficult for people to find, navigate and understand. That is so for many reasons. It is voluminous. It is frequently amended. And it is drafted in a technical style, which has no doubt been honed through careful practice on the part of professional draftspeople, in an admirable attempt to capture the often complex policy instructions that they have been given—but which makes them very difficult to comprehend.
Complex legislation can pose real problems. It makes it very difficult for people to find and understand the legislation that determines their legal position. It can hinder access to justice, by making legal proceedings harder and more costly. And it poses challenges for democracy—by making it very difficult for voters to meaningfully understand the performance of those they have elected, and very difficult for lawmakers to carefully assess the need for legal change or the way that legislative proposals before them will change the law.
But what is the solution? As is so often the case, that is far harder to articulate than the problem itself.
First, we have to be realistic about the level of simplicity we can, or should, demand. One of the reasons legislation has become more complex is that many people want government to do more and more complex things. If that is so, then legislative complexity is not so much a problem to be solved but an unavoidable side-effect of an admirable mode of governance; a challenge to which we must adapt. (For present purposes, I’ll leave to one side the argument that government should simply do less).
The US scholar Edward Rubin went further—arguing that we should reject the received wisdom, proffered by legal theorists Fuller and Raz—that legislation ought to be accessible to the people. This is a sophisticated argument, which I can only summarise here. But its main insight is that legislation in the contemporary administrative government is a tool for directing the executive to pursue policy goals with whatever degree of specificity the legislature thinks fit. As legislation ‘speaks to’ the executive rather than the people, it is wrong to assume it needs to be comprehensible to the people. It is the implementation of legislation by the executive branch that affects the rights and interests of the ordinary member of the public. If people want to get a sense of how they will be affected by legislation, they should talk to the executive—not read the statute book. Indeed, the legislature should encourage the executive to communicate with the public in this way.
This is a very attractive argument, because it suggests that we can have our cake and eat it too: we can maintain the complex legislation that we need to sustain a progressive administrative state; we can help people to get the information that they need.
But I have argued that this defence of legislative complexity only works in certain doctrinal conditions (in this article, and my contribution to this collection). In particular, it only works if people can safely rely on what the executive tells them—which will depend in part, on whether courts defer to the executive’s interpretation of the law. It expands the power of the executive branch to ‘say what the law is’, in fact if not in law, in ways that are difficult to reconcile with the constitutional orthodoxy, that the scope of executive power is set by legislation, independently interpreted by the courts.
The decision in Loper Bright
This brings me to the topic of deference—the subject of Loper Bright. Loper Bright was a case about fishing—and whether a statute empowered an executive agency to charge private fishing operators for the cost of carrying an observer from that agency on board their boat, to collect data for conservation purposes and monitor for overfishing. But it is momentous because it overturned the doctrine of Chevron deference—that is, the presumption that courts should treat the executive’s interpretation of a statute as binding, if the statute in question is ambiguous, and the interpretation in question is reasonable. This had, until now, represented an important point of difference between American administrative law and that of Australia and many other jurisdictions.
There were three prongs to the Court’s opinion, delivered by Chief Justice Roberts.
Firstly, that Chevron deference is inconsistent with constitutional principle—namely, the constitutional role of the courts.
Second, that Chevron deference was inconsistent with the Administrative Procedure Act (APA), and the statutory obligations it places on courts, to decide all questions of law in reviewing executive action.
Thirdly, that the doctrine of stare decisis did not stop the Court from overruling Chevron, because it was so wrong, and because it could not have been meaningfully relied upon—in large part, because the courts had tinkered with the doctrine so frequently in recent years.
I’ll focus my comments on the first of these points, because it is most salient to Australia.
The constitutional reasoning of the Court relied heavily on writings by the founders of the US Constitution and case law from the 18 and early 1900s—though the ideas are familiar to Australian ears. Quoting Hamilton, it was said that the ‘final “interpretation of the laws” would be “the proper and peculiar province of the courts.”’ This was the framer’s vision of the Constitution, and it was reflected in its structure, which ‘allow[ed] judges to exercise that judgment independent of influence from the political branches’ (at 7). The Court accepted ‘that exercising independent judgment often included according due respect to Executive Branch interpretations of federal statutes’ (at 8). As was said in United States v Moore, 95 US 760 (1877), ‘the officers concerned [were] usually able men, and masters of the subject’, and ‘not unfrequently … the draftsmen of the laws they [were] afterwards called upon to interpret’. However:
“Respect,” … was just that. The views of the Executive Branch could inform the judgment of the Judiciary, but did not supersede it. Whatever respect an Executive Branch interpretation was due, a judge “certainly would not be bound to adopt the construction given by the head of a department.” Otherwise, judicial judgment would not be independent at all. (at 9)
The view that questions of statutory meaning are questions of law is perhaps the crux of the Court’s judgment—and the main point of difference between it and the Chevron era case law. Chevron had been justified on the basis that resolving statutory ambiguities and filling gaps in statutory meaning was essentially a policy making function. Moreover, it was one that the executive was uniquely equipped to make, given its expertise in the increasingly complex subject matters of that legislation. At the same time, it was implausible to expect the legislature to enact detailed legislation to empower the executive to do all that it was not expected to do, let alone to constantly update that legislation as policy needs evolved; it simply did not have the time or resources to do so. Thus, courts should presume that Congress intended the executive to have final say as to what an ambiguous statute means. In this way, US scholars and judges reasoned, Chevron could be reconciled with the statutory obligations imposed by the APA, and the constitutional principle from Marbury v Madison, 5 US 137 (1803)—that is, that it is emphatically the province and duty of the judicial department to say what the law is. According to Chevron, courts performed that duty by recognising that the law authorised the executive to decide its meaning.
All of this was thrown out by Loper Bright. There is no basis, the Court said, for presuming that Congress wants the executive to decide interpretive questions. A statute could be ambiguous for all sorts of reasons—and ‘agencies have no special competence in resolving statutory ambiguities. Courts do’ (at 23). It was this rejection of executive expertise—or as her Honour put it, judicial hubris—that animated Justice Kagan’s excoriating dissent.
Loper Bright is no anomaly. It stands alongside other decisions and developments, which seem to significantly curtail the possible reach of executive power, causing judicial power to expand correspondingly, or else placing new demands on the legislature to authorise executive action in clear detail. One is Securities and Exchange Commission v Jarkesy, No 22-859 (2024), which held that the Commission could no longer impose financial penalties on rule breakers, as such matters involving private rights had to be decided by a court, and a jury. Another is the reinvigorated major questions doctrine. In a nutshell, this means a statute will not be read as empowering administrative agencies to decide questions of ‘vast economic and political significance’ unless it says so in clear words. As Adrian Vermuele commented, ‘the Loper Bright opinion “expressed a mood,” … the mood is that “We the Judges say what the law is.”’ Or we might call it, ‘anti-administrativism’.
An Australian perspective on Loper Bright
As I foreshadowed, the constitutional principles articulated by the Court in Loper Bright in striking down deference are firmly rooted in Australian jurisprudence. While there are only statements made in obiter rejecting Chevron per se, the case law makes clear that making binding determinations about the meaning of a statute is a judicial function, that it must perform independently. The High Court has also stated that Parliament cannot authorise the executive to decide the limits of its own power. We have no precise equivalent to the major questions doctrine, nor any doctrine of the kind that forbids executive actors from taking enforcement measures that limit private rights. But Australian courts do tend to read down statutory conferrals of executive power, in light of a judicially constructed set of norms and principles. And the separation of power principles derived from Chapter III of the Constitution constrain executive power to punish in important ways.
And so it seems, that Loper Bright and its contemporaries have brought American administrative law closer into line with that of Australia. But, there’s a need for nuance.
First, the decision in Loper Bright seems to accept that the legislature could delegate authority to decide questions of statutory meaning to the executive branch. It only made emphatically clear, that courts should not presume that Congress had done so—and so Congress would have to make itself crystal clear. If that is right, then the constitutional position in Australia may remain more rigid than in the US.
On the other hand, it is too blunt to say that the view of the executive never informs the courts’ reading of a statute in Australia. For example, Janina Boughey has shown that deference as respect clearly exists here and in the US—a view that the Chief Justice of the High Court seems to endorse. And SCOTUS made clear, that deference-as-respect survives Loper Bright. And I have shown (again, here and here) that it is too blunt to say that the scope of executive power is always and comprehensively determined by legislation, as interpreted by the courts. One example is Australia’s well-entrenched systems of tax rulings, which allows the Commissioner of Taxation to make binding determinations about how a taxing statute will apply to an individual—a preferable system, no doubt, to forcing people to rely on their best guess about what our labyrinthian tax laws mean, but difficult to square with the orthodox position that executive decision-makers cannot be authorised to decide the scope of their own power.
Some of the commentary on social media following the decision in Loper Bright suggested, with a certain degree of smugness, that the US had finally seen the light—and that deference was always wrong as courts in Australia and elsewhere have always known. Indeed, Justice Gorsuch made these kinds of superficial comparative claims in the lead up to Loper Bright—suggesting that given other countries had ‘declined to adopt’ something like Chevron deference the US Supreme Court should follow suit. The US scholar Oren Tamir was critical of this at the time. Chevron may have been right for the US, even though it is wrong for Australia.
Here, I return to the third and thoroughly pragmatic justification that had been offered for Chevron deference—that the legislature is simply incapable of making and amending large volumes of legislation, that empower the executive to pursue sophisticated policy goals in detailed terms. SCOTUS did not really say anything to counter this in Loper Bright; the clear implication of its judgment, is that these practical concerns cannot trump constitutional principle. That is certainly not an argument that can be dismissed out of hand—but the practical implications are certainly worthy of consideration, too. The US Congress is notoriously dysfunctional: regularly deadlocked, and inert. Often, it is necessary to leave detail out of legislation in order to avoid disagreement and secure its passage. This is why decisions like Loper Bright are perceived by many as a not so covert attack on the administrative state, rather than a genuine attempt to reconcile the administrative state with constitutional principle: the judges know that the legislature is very unlikely to play the role that this new jurisprudence gives it. Justice Kagan made that clear in her dissent—stating that Chevron deference had made possible ‘regulatory efforts of all kinds—to name a few, keeping air and water clean, food and drugs safe, and financial markets honest’ (at 2).
This is not a problem that we face in Australia. We do not have to choose between clean water, safe food and drugs, or financial regulation, and constitutional principles like judicial control of statutory meaning, in the same way that seems necessary in the US. Our legislatures are extraordinarily nimble. They make and amend huge volumes of legislation. And that legislation is often extremely detailed. Perhaps it is in this regard that Australians can feel a little smug—for we seem to have built an activist administrative state upon detailed primary legislation, keeping fundamental norms of parliamentary democracy and deliberation intact.
As my colleague Lynsey Blayden and I argue in a forthcoming paper, Australia might therefore be labelled a ‘parliamentary led administrative state’. This is not to deny the importance of delegated legislation made by the executive branch, or executive discretion. But Australian Parliaments are far more active than their counterparts in other jurisdictions. Executive made law does not dwarf the volume of Parliamentary made law in our legal system. And primary legislation is often very detailed, rather than simply empowering the executive to pursue broadly stated policy goals.
This should be of significant interest to the US in the wake of Loper Bright and its counterparts. If nothing else, it indicates that there is more than one way of constituting an interventionist state. But it is not clear that the Australian model could be easily replicated—particularly not without responsible government. There is also need for sober analysis, of whether Australian Parliaments are leading in substance or form. The volume and complexity of legislation seriously hinders the opportunity for meaningful parliamentary deliberation and scrutiny. The cynic could be forgiven for suspecting that our legislatures sometimes simply rubber stamp legislation that the executive has designed all on its own. And this does not avoid the problem that I introduced at the outset: the fact that legislation is so difficult to navigate and understand. Whether knowingly or not, Australia seems to have implemented the very approach articulated by Edward Rubin back in 1988. That is, we rely heavily on the executive branch, to translate complex statutes for the public and help them to understand how those statutes will shape their lives. This is increasingly done by automated systems, which function like a dialogue, generating individualised information about an individual user’s rights, obligations or entitlements (for an example, see here). This is a tenable solution to a difficult problem, but as I explained above, it is far from perfect. So perhaps, we have some reason to be smug—but also, lots of work to do.
Lisa Burton Crawford is a Professor of Public and Constitutional Law at the University of Sydney Law School.
Suggested citation: Lisa Burton Crawford, ‘Legislation in the contemporary administrative state: an Australian perspective on Loper Bright’ (16 August 2024) <https://www.auspublaw.org/blog/2024/8/legislation-in-the-contemporary-administrative-state-an-australian-perspective-on-loper-bright>