FORMS AND AVAILABILITY OF LITIGATION

1. Forms of Litigation under the Act

A. An overview

The Administrative Litigation Act provides for four forms of administrative litigation:

• appeal action: an appeal against an administrative agency’s disposition or inaction.

• party action: a suit, the defendant of which is a party to legal relation that is created by agency action or other public law relations.

• public action: a suit instituted by a person without his or her own legal interest to seek the correction of illegal acts by the state or a public entity in the public interest.

• agency action: a suit to resolve a competence dispute between public agencies.

(1) Appeal action The appeal litigation is the core form of judicial review over �administrative dispositions.’ There are three types of appeal actions depending on the remedies sought:

• an action to set aside or alter an administrative disposition (rescissory action);

• an action to declare the nullity or inexistence of an administrative dispo­sition (nullity-confirming action);

• an action to declare the illegality of an administrative inaction (inac­tion’s illegality-confirming action).

To bring an appeal action, the disputed administrative act should fall under the �administrative disposition’ pursuant to section 2(1)1 of the Act. This section of the statute defines the administrative disposition as �the exercise of, or the refusal to exercise public power by an administrative agency to execute law on a specific case.’ Decisions by administrative agencies to impose income tax on a person, to permit the construction of a building, to license the provision of telecommunication services, or to revoke a driver’s license for drunk driving all constitute �administrative dispositions.’ But administrative rulemaking and factual actions without direct legal effect, including cleaning up the street or just entering to investigate the workplace, are not administrative dispositions.

The essential element of �administrative disposition’ is the legal effect to bring changes to the legal status, i.e. legal right or obligation, of a person. Actions for rescission or declaration of nullity of an administrative disposition seek to eliminate or confirm the inexistence of the legal effect. The ultimate purpose of the two forms of action is the same: to set the person free from the legal effect of the illegal administrative act. But there are important differ­ences between the two. First, one has to bring a rescissory action within a limited period - 90 days after notice of the disposition or 180 days after the disposition - while there is no time limitation for an action for declaration of nullity. Secondly, to obtain a rescissory judgment, one has to assure the judge only that the administrative disposition is illegal, while to get the declaratory judgment of nullity one has to persuade the judge that the illegality is �serious and clear.’ In sum, when an administrative disposition has �serious and clear’ illegality, it can be annulled at any time. But when the illegality is not so seri­ous or clear, the illegal administrative disposition will become conclusively valid unless the claimant brings successful rescissory suit within the specified statutory time limit. (However, the agency itself can invalidate the disposition even after the time limit.)

Such a distinction between rescissiory action and nullity-confirming action is based on the theoretic dogma that when an administrative disposition is �seriously and clearly’ unlawful, anybody can deny the validity of it without special procedure, because such a disposition is supposed to be null from the outset. But practically, it is very difficult for anyone to distinguish serious and clear wrong from simple wrong. The ultimate judgment rests with the judge presiding over the appeal action.

(2) Party action The party action is employed to solve disputes in public law relations. The question for the judge is �what is the final legal status of the parties?’, not �whether the administrative power is executed in a manner consistent with legal standards?’ The legal relations are of a public law nature when they are created by administrative disposition, administrative contracts, eminent domain, or breach of public duty by a public officer. While an appeal action is a peculiar form of action for judicial review, a party litigation is more similar to general civil action.

Because the merit of party actions depends upon the legal rights or obliga­tions of the parties, the defendant of a party action has to be the state or a local government that has legal personality, not an administrative agency. Courts can potentially award various final remedies: declaratory judgment of legal right or status, money damages, just compensation, or possibly even mandatory orders to the state. The illegality of administrative acts is reviewed as a collateral issue to decide the legal status of parties. The court presiding over a party action cannot rescind a disposition unless the illegality involved is serious and clear.

Many commentators have attended to the potential utility of the party action as a comprehensive and flexible procedure for judicial protection of citizens’ rights. However, until now, it has been used only in limited types of cases, for example, contractual disputes between local government and its public employees. One reason for this is the preemptive role of the appeal action. Another important reason is that courts have been using civil proce­dures instead of the party action in state liability cases, unjust enrichment actions against the state (where a person may have overpaid tax), and actions concerning governmental procurement contracts.

(3) Public action The �public action’ is a type of public interest lawsuit. It can be used by citizens of Korea or residents of local government to seek the correction of illegal acts of the state or organs of public entities. The citizen or resident need not have her own legal interest at stake to have standing to sue. But one can file a public action only when a statute other than the Act provides for a specific type of public action. At present, examples of such suits include a suit for nullifying the national referendum under the National Referendum Act, a suit for nullifying an election or a candidate elected under the Public Official Election Act, and a newly introduced �Local Residents Suit’ against the head of local government under the Local Autonomy Act.

(4) Agency action The �agency action’ is employed to solve competence disputes between organs of the state, local governments, or other public legal entities. It deals with disputes over the existence or non-existence of adminis­trative authority or power. Like a public action, the agency action can be insti­tuted only when a statute other than the Act specifically authorizes a competence lawsuit.

There is also a competence dispute procedure at the Constitutional Court. According to section 2 of the Constitutional Court Act, the Constitutional Court has exclusive jurisdiction over competence controversies between organs of the state, between an organ of the state and local governments, and between local governments.

B. Permissibility of unspecified forms of action

Is it possible to bring suit against an administrative agency or the state for judi­cial review other than under the above listed forms of action, on the constitu­tional grounds of administrative litigation or judicial power?^[431] For example, can one bring suit to seek a court order to execute or not execute a specific disposition (similar to mandamus or prohibitory injunction) directed at an administrative agency even though such a suit is not specifically authorized in the Act? Various viewpoints exist on the interpretation of the related provi­sions of the Constitution and the Act. The underlying question is who decides the purview of judicial review, the Congress or the courts?

Some administrative law scholars argue that such a lawsuit is permissible. The practical justification for this argument is that if an unspecified appeal suit were available, citizens could get more effective and efficient remedies such as mandamus or prohibitory injunction without amending the Act. Logically they interpret that Article 27(1) of the Constitution^[432] requires the protection of individuals’ rights without exception and that the forms of action listed in the Act are just exemplary, not exhaustive; further finding no problems regarding separation of powers to grant courts the power to mandate administrative action or inaction. They call such a lawsuit a �no-named appeal suit.’ Opposing this argument, others have stated that a suit for mandamus or prohibitory injunction is not permissible without amending the Act.

Courts have denied the possibility of litigation for mandamus or prohibitory injunction.^[433] The reason for this is not entirely obvious from the text of related judgments, whether they interpret the Constitution as empow­ering them only to conduct judicial review to the extent that the legislature has clearly defined (court’s deference to legislative intention) or whether just the specific forms of remedy sought (mandamus, injunction) are not permitted by the Constitution under separation of powers considerations. Considering that suits for mandatory orders and prohibitory orders are included in both the 2004 Supreme Court proposal and the 2006 Department of Justice bill for amendment of the Act, it would not be wise to interpret the Constitution as disallowing those remedies. But at present it is evident that a complainant cannot get such remedies unless the Act is amended to establish new forms of action.

2. The Availability of Administrative Litigation

To decide the availability of administrative litigation is to define the scope of protection of individuals’ legal interests as well as the scope of judicial inter­vention into administrative activities. To find the proper balance, various values and principles should be considered, including the nature of judicial power, proper distribution of powers among the legislative, judicial, and administrative branches under separation of powers, and the cost-benefit effi­ciency of controlling administrative power through litigation. These consider­ations are embodied in �conditions of litigation’, that is, the prerequisites for a court to decide upon the merits of the case. In the Act, the special conditions reflecting the nature of appeal litigation are prescribed. Most of the provisions relate to rescissory litigation. Issues remain, however, concerning how to interpret the provisions of the Act. For appeal litigation, the interest of a lawsuit is scrutinized as the three conditions of litigation: reviewability of administrative activities, standing of a complainant, and overall interest of the lawsuit. But these three conditions are substantially intertwined with each other so that strict distinctions are not so easy to make.

A. Administrative acts subject to appeal action

The courts have interpreted �administrative disposition’ narrowly. According to section 2(1)1 of the Act, �disposition’ refers to �the exercise of or the refusal to exercise public power by an administrative agency as function of law execution in relation to specific facts, other similar administrative actions.’ The Supreme Court has interpreted this provision as �an administrative agency’s act of a public law nature which is directly related to the concrete legal right or duty of a citizen in a way to give a legal right or impose a legal duty to a citizen in a specific situation based on the statutes or otherwise to give direct legal effect.’^[434] There are differences between the Act’s definition and the Supreme Court’s interpretation. For an agency’s activity to be a �dispo­sition’, the Supreme Court requires it to be �directly related to the concrete legal right or duty of a citizen in a way to give a legal right or impose a legal duty to a citizen’, but this is not required by the text of the Act. To understand the Supreme Court’s interpretation and the standards it sets forth, one needs to read it in conjunction with the administrative law theories concerning the nature of the �appeal action’ and its place in the typology of administrative activities.

Administrative activities are classified into four basic categories: adminis­trative rulemaking, administrative act, administrative contract, and acts only with factual effect (factual act). There are some special legal rules and reme­dial procedures for each category.^[435] The appeal suit is supposed to be specially designed for application to �administrative acts.’ In administrative law theory, the concept of �administrative act’ is defined as �an authoritative public law act which has direct legal effect on a person by applying legal rules to specific facts.’^[436] An administrative legal decision that applies to a specific person in a specific case is an �administrative act.’^[437] The administrative act has special legal effect which is not endowed with administrative rulemaking or �activi­ties with only factual effect.’

According to the administrative law theory, when an administrative act is illegal, unless the illegality is serious and clear, the act is treated as legally effective until a court revokes it through rescissory litigation within the spec­ified time period.^[438] �Being treated as legally effective’ means that the admin­istrative agency can enforce the administrative decision using its powers of self-enforcement without court judgment.^[439] Thus, one can say that an illegal �administrative act’ has tentative validity until it is set aside by a court with proper jurisdiction.^[440] And if one fails to bring a rescissory suit within the statu­torily allotted time period, the illegal act remains perpetually valid.^[441] This final validity is called the �Effect of [.indisputability.’ The nature of revocation litigation is derived from these propositions.

Revocation litigation is regarded as the only judicial means of removing the tentative validity of an administrative act so as to make it retrospectively null. So thejudgment of rescission is deemed to have �formative effect’ which removes the tentative validity of the relevant administrative act. The problem is that defining the nature of the revocation litigation as such has resulted in the narrowing of the sphere of administrative actions subject to appeal action. The proposition that �the nature of revocationjudgment is to remove the special legal effect of an activity’ gives rise to another proposition that �an activity without individualized legal effect cannot be an object of revocation litigation.’ As a result, the other types of administrative activities, such as administrative rulemaking and acts only with factual effect, are excluded from the scope of activities reviewable through revocation litigation.

In sum, for an administrative decision or act to be a �disposition’ subject to appeal litigation, the following standards have to be met. First, pursuant to the text of the Act, it has to be an act of an administrative agency; involve �exer­cising public power’ (i.e. non-authoritative actions); involve the execution of a function of law; and be an application of law to specific facts. Additionally, courts require that there be a �direct legal effect on one’s legal right or duty.’ This last element contributes to a narrow range of administrative acts being subject to judicial review.^[442]

When applying the above standards, a procurement contract with govern­mental entities and administrative guidance is not reviewable because it is a non-authoritative or non-enforceable action. The choosing of a contractor to fulfill a government procurement contract cannot be reviewed by appeal litiga­tion but can only be reviewed by civil litigation.^[443] The Supreme Court denied judicial review of the Minister of Construction’s refusal to give its required agreement to a change of land use planning suggested by the local government, which is the ultimate authority for land use planning, even though the local government denied the change to the applicant on the ground of the Minister’s refusal.^[444] Similarly, it also denied judicial review of changes to a sewer system rehabilitation program, which included a decision to locate a new sewage treat­ment plant in a specific area,^[445] and an administrative rulemaking by the Minister of Health and Welfare concerning the regulation of a signboard at a doctor’s office.^[446] The common basis of these judgments was that the disputed acts did not have direct legal effects on the individuals in question.

A new point of view that has emerged recently regarding the nature of revocation litigation deserves mentioning. It argues that illegal administrative acts are always void from the time of issuance and that, thus, the nature of revocation litigation is to find the illegality and declare the act void. Therefore, rescissory action is not a �formative one,’ but a �declaratory one.’ The tentative validity of an �administrative act’ is not substantively legal in effect but rather a legal fiction as a reflection of the statutory time-limits of administrative litigation. In other words, it is merely a factual presumption that an administrative activity is legal and valid, simply put in place for the stability and efficiency of public administration. And the nature of �revoca­tion judgment’ is to affirm the nullity of the action rebutting the presump­tion.^[447] This kind of approach enables almost all potentially illegal activities which fit under the definition of �disposition’ of the Act to be litigable by revocation litigation.^[448]

General courts have jurisdiction over the legality and constitutionality of administrative rule-making when it is collateral to merit-related issues in a trial under Article 107(2) of the Constitution. It is not clear whether this means that this is the exclusive means of judicial intervention with administrative rule-making or whether this is merely a restriction on general courts’ jurisdic­tion over administrative rulemaking. Pursuant to this latter view, the Constitutional Court’s review of administrative rule-making when its consti­tutionality is not merely a collateral issue but the substantive issue of the case will be justified as Article 107(2) does not apply. Indeed, the Constitutional Court has ruled consistently with this interpretation. The Supreme Court, however, has a different view. It sees Article 107(2) as providing the only means of judicial review of rule-making so that the Supreme Court is the only judicial body which has such jurisdiction. Even from this viewpoint, when a rule directly affects the legal right or duty of a private citizen, it is subject to the revocation litigation as a disposition.

B. Standing to sue

There is a meaningful theoretical categorization of administrative litigation depending on the purpose of the lawsuit: subjective lawsuit and objective lawsuit. The main purpose of a subjective lawsuit is to protect individuals’ rights or interests and provide remedies for the aggrieved person. On the other hand, the purpose of an objective lawsuit is to secure the legality of adminis­trative power and to promote the public interest.^[449] Among the four forms of actions in the Act, appeal litigation and party litigation are subjective lawsuits and public litigation and agency litigation are objective lawsuits.

Practically speaking, every form of administrative litigation contributes to subjective and objective goals at the same time. When a person appeals an administrative order for his self-interest, it provides an opportunity not only to review the questioned activities but also to prevent similar illegal activities from occurring in the future, thereby improving the general quality of admin­istrative activities. In a suit to invalidate an election for the public interest, a candidate who lost in the illegal process might seek to realize his self-interest in the election. So these two functions are actually two sides of the same coin. The distinction between objective lawsuits and subjective lawsuits might simply be a matter of emphasizing one of them over the other. Then what is the ultimate purpose of having such a distinction at all?

Defining the major goal of administrative litigation can influence the nature and the span of administrative litigation. It can help influence the remit of judi­cial intervention in the execution of administrative power, or in other words, the relationship between the administrative power and the judicial power under separation of powers principles. If the role of appeal litigation is to protect an individual’s legal rights, the intervention of judicial bodies through appeal litigation could be banned when the rights are aggrieved by new types of administrative acts (like �administrative guidance’) or when interests aggrieved are not recognized as rights in spite of the fact that the substantial impact on people is becoming significant. Recently, arguments that emphasize the objective function of appeal litigation have been gaining in prominence and proponents.^[450]

Revocation litigation may be instituted by a person having �statutory inter­ests’ to seek the revocation of a disposition, etc. There are various viewpoints concerning the interpretation of �statutory interests.’ Some argue that �statu­tory interest’ is nothing more than the �right in a strict sense’, but others argue that it constitutes �interest deserving of protection by litigation’ or just �the legality of administration’ itself. As seen above, one who sees the revocation suit as subjective litigation tends to interpret it as having the same meaning as the �legal right’ while one who sees it as an objective suit tends to interpret the �statutory interest’ as �interest deserving of protection’, �just interest’, or nearer to �the judicial control of administration.’ The courts have been expand­ing standing gradually and consistently through interpretation. At present, when an interest at stake is protected by statute, which is the legal ground of the disposition or the related statutes, the standing is recognized.

C. Interests of suit: residual concept

�No interest, no lawsuit’ is a general principle that applies to all judicial actions. The �interest’ in this phrase refers to the public value deserving of the allocation of judicial resources as well as the interest of plaintiffs redressible by lawsuit. There may be various situations where judicial resources need not be expended even though other requirements (i.e. reviewability of administra­tive act and standing) are met. The Act specifically speaks to the situation when the disposition is no more effective due to the lapse of time, the enforce­ment of disposition, or other causes. Though there is no legal effect left to be removed, if the affected person has �statutory interests’ he or she can institute a rescissory suit. For example, an administrative order to suspend a license for a month does not have any more effect when the one month has passed. In such a case, the claimant ordinarily does not have any interest for rescissory action. However, when the record that he got the suspension order in the past can be a legal ground for cumulative punishment for the possible future viola­tion, the claimant has �statutory interests’ to seek rescission of the disposition.^[451]

D. Venue

Since 1998, the Administrative Court has had exclusive jurisdiction for first instance trial of appeal litigation unless there is a different provision. A party can appeal to the High Court and subsequently to the Supreme Court. Though the Act anticipated that every appellate jurisdiction would have an administra­tive court, at present there is only one administrative court jurisdiction, the Seoul Administrative Court. In the rest of the jurisdictions, general district courts have jurisdiction over appeal litigations. There are statutory exceptions, however. For example, for an appeal against antitrust decisions made by the Fair Trade Commission, a general competition regulator has to be brought directly to the High Court.

E. Defendants

According to section 13 of the Act, one can bring appeal litigation against an administrative agency that has made the disputed disposition. This is one of the peculiarities of an appeal litigation that is meant to facilitate efficiency and convenience for the parties. As for party litigation, the party has to be a legal entity that has the legal capability for right-and-duty bearing.

F. Time-limit to bring a suit

As already seen above, there is a time-limit to bring a rescissory action. According to section 20, a rescissory litigation shall be instituted within 90 days from the date a disposition is known by the plaintiff. It is a legally deter­mined period that cannot be extended by the court. But if a plaintiff fails to observe the time-limit due to no fault of his own, he is allowed to initiate the suit within two weeks after the condition is removed. At the same time, a revo­cation litigation is subject to another time-limit - one year from the date a disposition takes effect unless there is legitimate justification for bypassing it. These are functionally similar to statutes of limitations but different in that it is the court’s obligation to investigate whether to observe it even when the defendant does not raise such arguments. When the court finds that the plain­tiff passed the time-limit the court is required to dismiss the litigation.

As seen above, there is no time-limit for the litigation for affirmation of nullity. The same time-limit is applied to the litigation for affirmation of ille­gality of an omission according to section 38(2). But it is not clear how to calculate the time period in the case of administrative inaction.

G. Exhaustion of administrative remedies

Administrative appeal is a quasi-judicial administrative remedy procedure that is prescribed in the Constitution. Since 1994, this has been an optional proce­dure rather than a compulsory prerequisite. But there are exceptions where individual statutes provide otherwise.

IV.