Monthly Archives: March 2009

Don’t Bellieve the Story About Use of Eminent Domain in the U.S. by the Chinese

          An item has been spreading on the Internet to the effect that in order to induce the Chinese to keep on buying U.S. Treasury paper, they were granted the right to exercise the power of eminent domain in the United States as a form of security. It’s not true.

         This unfounded rumor may have been inspired by recent news stories reporting that wealthy Chinese are touring the United States with an eye on buying desirable foreclosed-on properties. But that has nothing to do with the power of eminent domain or any supposed U.S. government delegation of it to China.

         We have enough real problems with the state of the economy in general and the real estate market in particular, without making up silly stories.

Say “Sayonara” to Your House. Please. Pretty Please.

        Today’s New York Times (Martin Fackler, Grass-Roots Uprising Against River Dam Challenges Tokyo, N.Y. Times, Mar. 3, 2009, at p. A5) reports how local popular protests got the Japanese government to back down and suspend the acquisition of land and the construction of a dam on the Kawabi River near Hitoyoshi in southern Japan. The locals thought they did not need water for irrigation, fishermen were concerned with the dam’s impact on fish, and the environmentalists worried about losing the view of river gorges. Eventually, about half of Hitoyoshi’s residents signed a petition opposing te project. We note in passing that the Times article says nothing about any discussion of the hydroelectric power potential of the proposed dam. In an energy-poor country like Japan that omission is interesting to say the least. 

        This news item brings to mind the cultural difference between us and Japan when it comes to the use of eminent domain which is rarely employed over there. But what about those “holdouts” that are trotted out here in justification of profligate use of eminent domain? Don’t they have them in Japan? They sure do. The Japanese are so attached to the land that taking it away from them by force on a large scale is a prescription for social unrest.

          About a half-century ago, the Japanese government condemned farmland for the Narita airport outside of Tokyo, and until this day the descendants of the local farmers who were displaced from their land riot from time to time in protest. If you have been to Narita you may have noticed a heavy presence of the Japanese National Police – a paramilitary force heavily armed with automatic weapons and armored personnel carriers. So those folks take these matters seriously.

         So how do they do it in Japan? How do they acquire land for public projects without using eminent domain? Mostly by persuasion and negotiation. The Japanese are less individualistic than we and are more community-minded, so that helps in persuading them to go along with government demands for accommodation of community needs. Also, under Japanese law, people whose land is taken for public projects are fully compensated. There are no tax consequences. Nor is there any of that damnum absque injuria moral crap, nor “explaining” how compensation is awarded for the land, not to its owner, or lamenting that if the owners are indemnified for all their economic losses the world will surely end no later than next Tuesday, etc., etc.

         We happen to own one of the few copies of a book entitled PROCESS OF LAND ACQUISITION AND COMPENSATION, Published by the Hanshin Expressway Compensation Center, and translated into English by Professor Tsuyohi Kotaka of Meijo University. The book is written Japanese style in the form of cartoons – like a comic book. We learn from it that when a Japanese public project is about to impact a community, those folks don’t just send those “sell-or-else” offers to land owners whose land is targeted for acquisition. Instead, acquisition teams, each consisting of two right-of-way agents (one senior and one novice) move into the targeted community, get to know the head of the local council, as well as the people in the path of the project. Then, by a process of patient persuasion the latter’s consent to a sale of their property is secured. The compensation is based on fair market value and the owner may move his building(s) but need not do so if doing so is very expensive. It also covers business losses. 

        All that sounds like a happy ending and perhaps it is in most cases. That book certainly sounds that way. But what about an occasional real holdout? I put that question to a Japanese functionary of their Justice Department. He smiled, and said. “Sometimes, it takes a very long time,” which did not answer my question, but did provide an insight into how they feel about involuntary displacement of people from their land. Perhaps the real message lay in another unanswered question that was put to me by a member of a Japanese delegation visiting the United States to study our eminent domain law and practice. We were having lunch when he asked: “Back home, when a property owner is really stubborn and won’t sell, we sometimes use the services of the Yakuza. Do you do it here too?” I demurred, but the man had an unwitting point – here the Yakuza is the government.

Follow up. Readers interested in the law of eminent domain in Asia may find it useful to consult TAKING LAND: COMPULSORY PURCHASE AND REGULATION IN ASIAN-PACIFIC COUNTRIES (Tsuyoshi Kotaka and David L. Callies, eds., Univ. of Hawaii Press, 2002). Japan is covered by Prof. Kotaka in Chapter 4, Japan’s Land Use Law, pp. 144-168. It is interesting to note (id. at p. 7) that “Japan is . . . one of the few countries to use the idea of ‘land readjustment,’ whereby  the state returns to the landowner a stake in the ‘combined project’ for which the landowner’s land was compulsorily taken.” Which is what Justice Kennedy suggested during oral arguments in the Kelo case.