When may a court set aside a punitive administrative disposition for abuse of discretion? Decision 2007Du6946 on 'the bounds of discretion' in a pharmacist's fine

Question

Article 27 of the Administrative Litigation Act provides that even a disposition falling within an administrative agency's discretion may be cancelled by a court where it exceeds the bounds of that discretion or where the discretion is abused. What standard governs that review, and how does a standard for punitive administrative dispositions set out in the form of a ministerial decree bear on the legality of a disposition made under it?

Decision 2007Du6946 raises both questions. The head of a public health centre gave a pharmacist notice of a 15-day business suspension for selling a medicine with its packaging opened, then imposed a fine of KRW 8,550,000 in lieu of that suspension. The court below cancelled the fine as disproportionate; the Supreme Court set that judgment aside.

Material to check

The statutes are Article 1 of the Administrative Litigation Act, stating the Act's purpose of remedying infringement of citizens' rights or interests by unlawful dispositions or other exercise or non-exercise of public power, and Article 27, on cancellation of discretionary dispositions. The decision cites former versions of the Pharmaceutical Affairs Act and its Enforcement Decree and Enforcement Rule: Article 39 of the Pharmaceutical Affairs Act (before its full amendment by Act No. 8365 of 11 April 2007), Articles 69(1)(iii) and 69(3) and Article 71bis3 of the same Act, Article 29 and Attached Table 1-2 of the Enforcement Decree (before its amendment by Presidential Decree No. 20130 of 28 June 2007), and Article 89 and Attached Table 6 of the Enforcement Rule (before its amendment by Ministry of Health and Welfare Decree No. 332 of 7 October 2005); their current texts are not given here.

The decisions are Decision 2007Du6946 and the decisions it cites. Decision 2005Du9910 (28 June 2007) concerns the standard for judging whether a punitive administrative disposition exceeds or abuses discretion, and holds that the fine calculation standard in Attached Table 5 to Article 61 of the former Enforcement Decree of the National Health Insurance Act is not beyond the parent Act's delegation and is not void. Decision 2001Du7138 (5 February 2002) is cited for the same standard. Decision 2006Du19297 (19 July 2007, Grand Bench) found no abuse of discretion in a cancellation of an officer's appointment approval in a private school case. Decision 94Nu14148 (17 October 1995, Grand Bench) and Decision 96Nu5773 (30 May 1997) concern the legal nature and effect of administrative disposition standards set in the form of ministerial decrees or local rules. The citation list also contains Decision 2003Du1684, for which the texts read give the number only.

Possible readings

The decision, citing Decision 2005Du9910 and Decision 2006Du19297, states that whether a punitive administrative disposition exceeds or abuses discretion as a matter of social convention is judged by objectively inquiring into the content of the violation that formed the reason for the disposition, the public interest purpose the disposition seeks to achieve and all the circumstances attending it, and comparing and weighing the degree of infringement of the public interest against the disadvantage the individual suffers from the disposition. Decision 2005Du9910 and Decision 2001Du7138 state the same standard.

The decision, citing Decision 94Nu14148, Decision 96Nu5773 and Decision 2003Du1684, states that a standard for punitive administrative dispositions set in the form of a ministerial decree is no more than an internal rule of administrative practice: it has no effect binding citizens or the courts externally, and the legality of the disposition is judged not by that standard alone but by the content and purpose of the relevant statutes. So conformity with the standard does not at once make the disposition lawful. Conversely, the decision states, so long as there is no reasonable ground for regarding the standard itself as incompatible with the Constitution or an Act, or the disposition made under it as manifestly unfair having regard to the content of the violation and the content and purpose of the relevant statutes, one should not lightly find a departure from or abuse of discretion.

A third reading follows the two limbs of that test in opposite directions. The standard does not decide the case in the agency's favour, because Article 27 of the Administrative Litigation Act leaves the court to review the disposition itself; but equally the standard is not to be set aside on impression alone, because the manifest-unfairness condition requires a reasoned ground. The decision states both limits without fixing where between them any particular case falls.

What the decisions held

Decision 2007Du6946 (20 September 2007) set aside the Seoul High Court's judgment of 15 February 2007 (2006Nu10186) and remanded the case to that court. The court below had found that the 15-day suspension underlying the fine breached the principle of proportionation and amounted to an unlawful departure from and abuse of discretion, and that the same defect attached to the fine itself, and on that basis cancelled the fine.

As the decision records the facts, the plaintiff, who operated a pharmacy, sold 'Magmil', a magnesium hydroxide preparation used for gastritis and constipation, with its packaging opened, contrary to Article 39 of the former Pharmaceutical Affairs Act. The defendant detected this on 5 August 2005 and on the 16th of the same month gave notice of an intended 15-day business suspension under the former Act and Attached Table 6 to its Enforcement Rule; on 30 September of the same year, after hearing the plaintiff, the defendant imposed a fine of KRW 8,550,000 (15 days x KRW 570,000) in lieu of that suspension under the former Act and Attached Table 1-2 to its Enforcement Decree.

Applying the standard, the decision held that the fine could not readily be found unlawful. It reasoned that the prohibition on selling opened medicines is closely tied to the purpose of the Pharmaceutical Affairs Act and to the principle of separation of prescribing and dispensing, and aims at preventing misuse of medicines and promoting public health; that although Magmil is a general medicine with relatively few side effects, it carries precautions and possible effects, including hypermagnesaemia and milk-alkali syndrome, that require full explanation to the buyer; that the plaintiff's pharmacy was a large one with turnover exceeding KRW 285,000,000 in the previous year, for which the calculation standard sets the daily fine at the maximum KRW 570,000, so that the small economic benefit of the offence did not make it slight and a large pharmacy ought to observe the law more strictly; that the defendant first notified the 15-day suspension prescribed for a single violation, then, after hearing the plaintiff, took the content and degree of the violation into account and imposed the fine in lieu; and that none of the mitigation grounds listed in the Enforcement Rule, such as public health or supply needs, a prosecutor's decision to defer indictment or a court's judgment deferring sentence, or acceptance of opinions submitted at the hearing or prior notice, was present. On that basis the decision held there was no departure from or abuse of the defendant's discretion, so that the court below had misunderstood the law.

Points left open

The decision states the test in general terms and applies it to a single fine. It does not fix how the comparison between the public interest and the individual's disadvantage is to be made in other sanctioning fields, nor at what point a departure from a ministerial standard becomes a factor of weight in that comparison; the decision treats conformity with the standard as not by itself sufficient to make the disposition lawful, and leaves the balance to the individual case.

The decision also leaves undecided what would count as a reasonable ground for regarding a disposition standard as incompatible with the Constitution or an Act, or a disposition made under it as manifestly unfair. Decision 2005Du9910 is recorded as holding only that the fine calculation standard in Attached Table 5 to Article 61 of the former Enforcement Decree of the National Health Insurance Act is not beyond the parent Act's delegation and is not void; how far that reasoning extends to other standards is not answered here.

When to reconsider

We revisit this brief if a later Supreme Court decision refines the comparison between public interest and individual disadvantage, or if the Administrative Litigation Act, the Pharmaceutical Affairs Act or the provisions the decision cites as former versions are amended in a way that changes the standard or the sanctioning framework.

Statutes referred to

• 행정소송법 제1조, 제27조
• 구 약사법 제39조, 제69조, 제71조의3
• 구 약사법 시행령 제29조
• 구 약사법 시행규칙 제89조

Decisions referred to

• 대법원 2007. 9. 20. 선고 2007두6946 판결 · Decision ledger
• 대법원 2002. 2. 5. 선고 2001두7138 판결
• 대법원 2007. 6. 28. 선고 2005두9910 판결
• 대법원 2007. 7. 19. 선고 2006두19297 전원합의체 판결
• 대법원 1995. 10. 17. 선고 94누14148 전원합의체 판결
• 대법원 1997. 5. 30. 선고 96누5773 판결

Verification status

The texts read for this brief were read at the National Law Information Center on 24 October 2026. The decision was read in its published holdings, summary and reasons, Articles 1 and 27 of the Administrative Litigation Act in their current text, and the cited decisions in their published holdings and summaries, except Decision 2003Du1684, for which the texts read give the citation only.