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09 June 2009
The Supreme Court recently rendered a series of judgments relaxing the requirements for filing an administrative suit and appearing to require lower courts to exercise greater scrutiny of measures taken by administrative agencies. This update looks at the basic framework for administrative litigation in Japan and discusses recent cases in this area.
Under Japanese law, litigation proceedings against administrative bodies (ie, central and local government and other public organizations) are handled in the regular courts. Some remedies (eg, claims for government compensation and contractual liability) are provided through normal civil proceedings against administrative bodies, to which the general rules under the Code of Civil Procedure (Law 109/1996) apply. However, certain types of remedy (eg, revocation of actions taken by administrative agencies) are provided only through special types of litigation to which the rules set forth in the Administrative Case Litigation Law (139/1962) apply.
Of the four types of administrative case litigation set out in the Administrative Case Litigation Law, the most frequently used is the protest suit - in 2007 this constituted 82.5% of all administrative litigations filed. In particular, the revocation suit, a type of protest suit, constituted 69.7% of all administrative litigations filed in 2007.
In a revocation suit the plaintiff is required to meet certain procedural requirements before it can receive a judgment on the merits of the case. If the plaintiff fails to meet such requirements, the court will dismiss the case. The Administrative Case Litigation Law sets out the following major procedural requirements:
Traditionally, these procedural requirements have been strictly interpreted, which limited the qualifications for revocation suits.
Even if a plaintiff satisfied the procedural requirements, it was difficult for it to win the case, particularly where administrative agencies enjoyed broad discretion to take administrative measures that they considered to be appropriate. Where administrative agencies have this discretion, such measures will be revoked only when the administrative agency abused its discretion or deviated from the limits of the discretion (Article 30 of the Administrative Case Litigation Law). Moreover, in general, the burden to prove such abuse or deviation falls on the plaintiff.
Under such circumstances, traditionally it has been difficult to litigate against administrative measures.
However, the Supreme Court has recently rendered a series of judgments which eased procedural requirements and appeared to require the lower courts to exercise greater scrutiny of the measures taken by administrative agencies. The following cases are some examples of these judgments.
Rulings on administrative disposition
In Takano v Governor of Toyama(1) the plaintiff applied to the governor of Toyama for permission to establish a hospital. In response to the application, the governor recommended that the plaintiff should not establish the hospital. The plaintiff refused to follow the governor's recommendation. The governor gave permission, but also indicated that the plaintiff's hospital would not be designated as a medical insurance institution. The plaintiff litigated to revoke the recommendation.
Under the Medical Service Law (205/1948), governors are obliged to permit the establishment of hospitals provided that applicants satisfy the legal requirements. However, governors can make recommendations as to the establishment of hospitals, including a recommendation not to establish a hospital. Although these recommendations do not have binding effect on recipients, in practice it is highly unlikely that a hospital established against such recommendation will be designated as a medical insurance institution. Under the Japanese universal health insurance system, operating a hospital without it being designated as a medical insurance institution is considered to be extremely difficult. The Toyama District Court and the Nagoya High Court, Kanazawa Branch dismissed the case, ruling that the governor's recommendation would not necessarily lead to denial of an application for designation as a medical insurance institution, and therefore the recommendation was not an administrative disposition.
However, the Supreme Court reversed the original decision and ruled that the governor's recommendation qualified as an administrative disposition.
In Nakamura v Hamamatsu City(2) Hamamatsu City made a project planning decision regarding the Kamijima Station Vicinities Land Readjustment Project and publicly announced the plans on which it had decided. Owners of land in the areas of the project litigated to revoke the city's decision.
Under the Land Readjustment Law (119/1954), construction in areas where a land readjustment project operates is restricted when project planning is decided and publicly announced. When the land readjustment project is carried forward, administrative agencies will order mandatory land substitution in areas where the project operates.
At the time the precedent was Sakamoto v Governor of Tokyo,(3) which held that such a decision did not qualify as an administrative disposition. The Tokyo High Court followed this precedent and dismissed the case. However, the Supreme Court overruled the established precedent and held that the project planning decision qualified as an administrative disposition.
Ruling regarding standing to sue
In Izuka v Director of Kanto Regional Development Bureau(4) the construction minister gave approval to a city planning project to elevate the Odakyu railway line in designated areas. People living nearby litigated to revoke the minister's approval. The plaintiffs insisted that elevating the railway would cause severe damage to people living nearby, and thus the approval was unlawful.
At the time the precedent was Suzuki v Minister of Construction,(5) which limited standing to persons or legal entities which held rights in relation to the real estate in the areas of the project. The Tokyo High Court referred to the precedent and denied standing to plaintiffs without such rights.
However, the Supreme Court overruled the precedent and held that persons living nearby who would directly suffer significant damage to their health and living environment as a result of the project had standing to sue. This ruling suggests that a person may have standing even if they do not have property rights in the area.
Ruling regarding administrative discretion
In Toyokuni v Director of Kanto Regional Development Bureau(6) the construction minister issued a city planning decision regarding Meguro Park in Tokyo. The decision included the plaintiffs' private land in the park in order to link the park entrance with a public road. The Tokyo Metropolitan Government successfully applied to the minister for approval of a city planning project to develop areas that included the plaintiffs' land. The owners of the private land filed a revocation suit stating that the minister decided to use private land despite the existence of utilizable public land, and accordingly the decision was unlawful.
The Tokyo High Court rejected the plaintiffs' claim, holding that:
"such perspective that private land can only be used when the purpose of administration could not be achieved by using public land is not absolute in city planning."
However, the Supreme Court reversed the original decision and remanded the case to the Tokyo High Court. The Supreme Court held that:
"the fact that public land is utilizable as a substitute for private land is one of the factors to be considered to determine reasonability of decision... the original decision does not find enough concrete facts to decide on the reasonability of the decision made by the minister of construction."
City planning is generally considered to be an area where administrative agencies enjoy broad discretion. However, the Supreme Court ordered the Tokyo High Court to balance the factors for and against the reasonability of the city planning decision. In its ruling, the Supreme Court showed that it was willing to review the reasonableness of measures taken by administrative agencies even in areas where administrative agencies usually have broad discretion.
In these recent judgments the Supreme Court has demonstrated its intentions to strengthen the judicial remedies provided by administrative litigation. Instigating administrative litigation against administrative bodies has not traditionally been considered a reasonable choice for businesses. However, depending on future trends, administrative litigation may become a feasible option for businesses to contest unreasonable administrative actions. Therefore, forthcoming administrative litigation cases will be worth watching closely.
For further information on this topic please contact Takefumi Sato or Toshishige Fujiwara at Anderson Mori & Tomotsune by telephone (+81 3 6888 1000) or by fax (+81 3 6888 3089 ) or by email (firstname.lastname@example.org or email@example.com).
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