Judicial review

What Is Judicial Review?

Judicial review is the process by which courts determine whether a law, action, or decision made by a governmental body, such as the legislative or executive branch, violates a country's constitution or other established legal principles. This concept is a fundamental aspect of constitutional law and operates as a crucial check and balance within a system of separation of powers. When a court exercises judicial review, it is assessing the legality and constitutionality of governmental acts, ensuring adherence to the supreme law of the land.

History and Origin

The concept of judicial review, while present in various forms throughout history, was firmly established in the United States by the Supreme Court case of Marbury v. Madison in 1803. This landmark decision, presided over by Chief Justice John Marshall, asserted the Court's authority to declare an act of Congress unconstitutional. William Marbury was appointed as a Justice of the Peace but his commission was not delivered. Marbury petitioned the Supreme Court to compel James Madison, the new Secretary of State, to deliver the documents.²²,²¹ The Court found that Madison's refusal to deliver the commission was illegal.²⁰ However, the Supreme Court determined that the Judiciary Act of 1789, which would have given the Court the power to issue the order Marbury sought, was unconstitutional because it expanded the Court's original jurisdiction beyond what the Constitution permitted.¹⁹,¹⁸ In so doing, Marshall articulated the principle of judicial review, solidifying the judiciary's role as an independent arbiter of constitutionality.¹⁷,¹⁶ This ruling established a critical precedent for the balance of power among the branches of government.¹⁵

Key Takeaways

• Judicial review allows courts to invalidate laws or actions that conflict with constitutional principles.
• The U.S. Supreme Court established the precedent for judicial review in Marbury v. Madison (1803).
• It serves as a vital check and balance, ensuring that legislative and executive branches adhere to the constitution.
• Judicial review can apply to federal and state laws, as well as administrative agency actions.
• This power is a cornerstone of American constitutional law and helps maintain the rule of law.

Interpreting Judicial Review

Interpreting judicial review involves understanding its scope and application within a legal framework. When courts engage in judicial review, they are not merely reviewing policy wisdom but rather the legality and constitutionality of an action. This requires careful consideration of legal texts, precedents, and the intent of lawmakers. The process can involve interpreting specific clauses of a constitution, such as those related to due process or equal protection.

A crucial aspect of interpreting judicial review in administrative law is the level of deference courts give to government agencies. Historically, under the Chevron deference doctrine (established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 1984), courts would defer to an agency's reasonable interpretation of an ambiguous statute it was tasked with administering.¹⁴, However, in June 2024, the Supreme Court overruled Chevron deference in Loper Bright Enterprises v. Raimondo, reasserting that courts must exercise independent judgment in deciding whether an agency has acted within its statutory authority.¹³ This shift impacts how courts interpret agency actions and the power of administrative bodies in areas like regulatory compliance and agency oversight.

Hypothetical Example

Consider a hypothetical scenario where a state legislature passes a new law imposing a significant tax on all investments held in mutual funds, but exempts all other forms of investment, such as stocks and bonds. A group of financial advisors and individual investors believes this law unfairly targets a specific type of investment and violates the state's constitutional clause requiring "uniformity in taxation." They file a lawsuit challenging the law's constitutionality.

During the judicial review process, a state court would examine the new tax law. The court would analyze whether the law's selective application of the tax aligns with the constitutional requirement for "uniformity in taxation." If the court finds that the law creates an arbitrary distinction without a rational basis, it could declare the law unconstitutional. This ruling would invalidate the law, preventing its enforcement and protecting investors from the disproportionate tax burden. This example demonstrates how judicial review acts as a safeguard against legislative overreach and ensures that laws adhere to constitutional principles.

Practical Applications

Judicial review plays a pervasive role in various aspects of the financial and economic landscape by influencing legislation, regulation, and individual rights. For instance, courts routinely review the constitutionality of taxation laws, ensuring they adhere to principles such as due process and equal protection. This oversight helps prevent discriminatory or confiscatory tax policies that could harm investment and economic activity.

In the realm of financial regulation, judicial review assesses the legality of rules and actions taken by agencies such as the Securities and Exchange Commission (SEC) or the Consumer Financial Protection Bureau (CFPB). For example, the U.S. Supreme Court recently upheld the funding structure of the CFPB, reversing a lower court's ruling that had found its funding mechanism unconstitutional.¹²,¹¹,¹⁰ This decision, made in May 2024, affirmed the CFPB's operational independence and its ability to continue its consumer protection mission, including oversight of areas like credit cards and student loans.⁹ Such judicial decisions have direct implications for financial markets and the oversight of financial institutions.⁸ Beyond financial matters, judicial review also applies to environmental regulations, labor laws, and civil rights, showcasing its broad impact on societal and economic structures. This continuous judicial scrutiny reinforces the principle of accountability within the government.

Limitations and Criticisms

While judicial review is a cornerstone of modern constitutional systems, it is not without its limitations and criticisms. One common critique centers on the potential for judicial overreach, where unelected judges might substitute their own policy preferences for those of the elected legislative or executive branches. This concern is often framed as a challenge to democratic principles, as it grants significant power to a body not directly accountable to the electorate.

Another criticism relates to the subjective nature of constitutional interpretation. Different judges may interpret the same constitutional provisions in varying ways, leading to inconsistent rulings or perceived politicization of the judiciary. This can create uncertainty in the legal and economic landscape, impacting business planning and market stability. The American Bar Association (ABA) has, at times, voiced concerns about remarks from government officials that question the legitimacy of judicial review or call for the impeachment of judges simply because their decisions are not in line with the administration's stance.⁷,⁶,⁵ Such criticisms underscore the ongoing debate about the proper role and boundaries of judicial review within a system of checks and balances.

Judicial Review vs. Chevron Deference

Judicial review is a broad power of courts to assess the constitutionality or legality of government actions, whether they originate from the legislative, executive, or administrative branches. It is the ultimate authority by which courts ensure that all governmental acts comply with the supreme law of the land, typically a constitution. This power encompasses reviewing everything from federal statutes to state laws and administrative regulations.

Chevron deference, in contrast, was a specific legal doctrine within administrative law that guided how courts approached an administrative agency's interpretation of an ambiguous statute. Under Chevron deference, if a statute administered by an agency was unclear, courts would typically defer to the agency's interpretation as long as it was a "reasonable" construction of the statute.⁴,³ This doctrine essentially limited the scope of judicial review in certain administrative cases, granting agencies a degree of autonomy in interpreting the laws they enforce. However, as noted, the Supreme Court recently overturned Chevron deference, meaning courts will now exercise their independent judgment when reviewing agency interpretations, rather than deferring to the agency simply because a statute is ambiguous.²,¹ This change significantly alters the dynamic of judicial review concerning agency actions.

FAQs

What is the primary purpose of judicial review?

The primary purpose of judicial review is to ensure that all governmental actions, including laws passed by legislatures and decisions made by executive agencies, adhere to the principles and provisions of the Constitution. It acts as a safeguard against abuses of power and protects individual rights.

Who exercises judicial review?

Judicial review is exercised by courts within the judicial branch of government. This includes supreme courts, appellate courts, and sometimes lower courts, depending on the legal system. In the United States, the Supreme Court holds the ultimate authority for judicial review.

Can a law be overturned by judicial review?

Yes, if a court exercising judicial review determines that a law or governmental action violates the constitution, it can declare that law or action unconstitutional. This effectively nullifies the law, preventing its enforcement. This power is a key aspect of constitutional supremacy.

Is judicial review limited to federal laws?

No, judicial review applies to both federal and state laws, as well as the actions of federal and state executive branches and administrative agencies. Courts can review any governmental act to ensure its conformity with the relevant constitution. This includes reviewing state statutes and executive orders.

What happens after a court declares a law unconstitutional through judicial review?

When a court declares a law unconstitutional through judicial review, that law is typically struck down and can no longer be enforced. The decision may also set a legal precedent that guides future judicial interpretations and legislative actions. In some cases, the legislative body may then attempt to pass a revised law that addresses the constitutional concerns raised by the court.