Regulating Pachinko Parlors by Local Ordinance in Japan: Clashes Between National and Local Laws

Pachinko, a pinball-like arcade game, is a ubiquitous part of Japan's entertainment landscape and a significant industry. However, its association with gambling and potential social impacts means it is subject to considerable regulation. This regulation occurs at two main levels: national law, primarily the Businesses Affecting Public Morals Regulation Act (風俗営業等の規制及び業務の適正化等に関する法律 – Fūzoku Eigyō Tō no Kisei oyobi Gyōmu no Tekiseika tō ni Kansuru Hōritsu, commonly known as "Fueiho"), and local municipal ordinances (条例 – jōrei). This dual regulatory structure can lead to complex legal challenges, particularly when municipalities enact ordinances that impose stricter or different requirements than those derived from the national framework.

This article explores the legal framework governing pachinko parlor regulation in Japan, focusing on the potential for clashes between Fueiho-based rules and supplementary municipal ordinances, and the legal recourse available to operators facing enforcement actions under such local rules.

The National Regulatory Framework: The "Fueiho"

The Fueiho is the primary national legislation governing businesses that may affect public morals, including pachinko parlors. Key aspects relevant to pachinko include:

1. Business Category: Pachinko parlors are classified as "Category No. 7 businesses" under Article 2, Paragraph 1, Item (vii) of the Fueiho, which covers establishments providing games that may incite a speculative spirit.
2. Permit Requirement: Operating a pachinko parlor requires a permit from the Prefectural Public Safety Commission for each business location (Fueiho Article 3, Paragraph 1).
3. Location Restrictions: A crucial aspect of the permit process involves location. Fueiho Article 4, Paragraph 2, Item (ii) prohibits granting a permit if the establishment is located in an area where its operation should be restricted to preserve a good moral environment, based on standards set by a Cabinet Order and further specified by prefectural ordinances.
   • The Fueiho Enforcement Order (風俗営業等の規制及び業務の適正化等に関する法律施行令 – Fueiho Shikōrei), in Article 6, provides these national standards. It allows prefectural ordinances to designate restricted areas, typically including "residential collective areas" (住居集合地域 – jūkyo shūgō chiiki) and areas around protected facilities like schools and hospitals.
   • Prefectural ordinances then concretize these national standards, for example, by defining "Type 1 Areas" (often corresponding to various residential zones under the City Planning Act) where pachinko operations are generally prohibited.

The Local Overlay: Municipal Ordinances Adding Stricter Rules

Despite the Fueiho framework and its implementation through prefectural ordinances, individual municipalities sometimes enact their own, often stricter, ordinances regulating pachinko parlors. The rationale for such municipal ordinances often stems from a perception that the prefectural rules, based on broader national standards, are insufficient to address specific local conditions or to adequately protect the particular living environment or "good customs" of that municipality. This is especially common in cities that serve as "bed towns" (ベッドタウン – beddo taun), where residential density might be high even in areas not formally zoned as exclusively residential under the City Planning Act.

These municipal ordinances might impose additional requirements, such as:

• Broader restricted zones than those defined by the prefectural (Fueiho-based) ordinance.
• A requirement to obtain the mayor's "consent" (同意 – dōi) or a similar approval before constructing or altering a pachinko parlor, even if the location is permissible under the prefectural ordinance.
• Stricter rules on operating hours, advertising, or facility design.

When National and Local Laws Collide: The Limits of Municipal Ordinance-Making Power

A fundamental principle of Japanese law, enshrined in Article 94 of the Constitution and Article 14, Paragraph 1 of the Local Autonomy Act (地方自治法 – Chihō Jichi Hō), is that local ordinances cannot conflict with national laws. When a municipal ordinance attempts to regulate an activity already addressed by a national law like the Fueiho, the question of conflict arises.

The "Tokushima City Public Safety Ordinance Case" Framework

The leading Supreme Court case on this issue is the Tokushima City Public Safety Ordinance Case (Grand Bench, Judgment of September 10, 1975, Keishū Vol. 29, No. 8, p. 489). This judgment established a framework for determining when a local ordinance can validly regulate a matter already covered by national legislation. Generally, a municipal ordinance may add to or supplement national law if:

1. No Intent of National Preemption: The national law does not demonstrate an intent to comprehensively regulate the field to the exclusion of any local supplementation (i.e., it does not aim for absolute national uniformity).
2. Distinct Local Purpose: The local ordinance serves a distinct purpose and addresses local needs or circumstances not fully covered or adequately dealt with by the national law.
3. No Contradiction: The specific provisions of the local ordinance do not directly contradict the provisions or the overall scheme and objectives of the national law.

Applying Tokushima to Municipal Pachinko Ordinances: Points of Contention

When applying this framework to municipal pachinko ordinances that are stricter than Fueiho-based prefectural rules, several arguments emerge:

• Arguments for Conflict (and thus invalidity of the municipal ordinance):
  • Comprehensive National Scheme: It can be argued that the Fueiho, by delegating the specification of restricted areas to prefectural ordinances based on national (Cabinet Order) standards, intends to create a comprehensive and reasonably uniform system of location control implemented at the prefectural level. Stricter municipal overrides might disrupt this intended balance.
  • "Minimum Necessary" Principle: The Fueiho Enforcement Order (Article 6, Item (iii)) stipulates that restricted area designations by prefectures should be the "minimum necessary" to preserve a good moral environment. This could imply that more stringent municipal rules are inherently excessive and contrary to this principle.
  • Legislative Intent for Maximum Standards: Some court reasoning, notably in the lower court judgments of the Takarazuka Pachinko Parlor Case (e.g., Kobe District Court, Judgment of April 28, 1997, Hanrei Jihō No. 1613, p. 36; Osaka High Court, Judgment of June 2, 1998, Hanrei Jihō No. 1668, p. 37), suggested that the 1984 revision of the Fueiho was intended to establish nationally uniform maximum standards of regulation, leaving little room for municipalities to impose stricter ones. (While the Supreme Court in the Takarazuka case (Third Petty Bench, Judgment of July 9, 2002, Minshu Vol. 56, No. 6, p. 1134) ultimately quashed the High Court decision on grounds related to the ripeness of challenging a mayoral "disagreement" rather than directly ruling on the ordinance's substantive conflict, the lower courts' reasoning on conflict remains influential in these discussions).
• Arguments Against Conflict (supporting the municipal ordinance):
  • Local Specificity: Municipalities might argue that general prefectural rules cannot adequately address unique local conditions, such as unusually high residential density in areas technically zoned for commercial or industrial use, or specific concerns about youth welfare in a "bed town."
  • Distinct Purpose: A municipal ordinance might claim a more focused local purpose, such as preserving a specific neighborhood character or addressing localized traffic and noise issues related to pachinko parlors in a way not detailed by broader prefectural rules. The reasonableness and narrow tailoring of such municipal restrictions would be key (e.g., an ordinance in Itami City with more specific, geographically limited restrictions around educational facilities was upheld by the Kobe District Court in a judgment on January 25, 1993).

Challenging Enforcement Actions Under a Municipal Pachinko Ordinance

Disputes often crystallize when a municipality takes enforcement action against a pachinko operator based on its local ordinance. Consider a scenario: Operator X is denied the mayor's "consent" required under a municipal ordinance for a new pachinko parlor in an area otherwise permissible under the prefectural (Fueiho-based) ordinance. X proceeds with construction anyway. The mayor issues a stop-work order, and after completion, issues a demolition order (原状回復命令 – genjō kaifuku meirei – order for restoration to original state) for the building under the municipal ordinance. As a prelude to demolishing the building by vicarious execution, the mayor then issues a formal warning (kaikoku – 戒告) under Article 3, Paragraph 1 of the Administrative Enforcement by Vicarious Execution Act (AEVEA) (行政代執行法 – Gyōsei Daishikkō Hō).

Legal Strategies to Prevent Vicarious Execution (Demolition)

To prevent the demolition, Operator X has several administrative litigation options:

1. Challenging the Demolition Order:
   • Action: File a revocation suit (取消訴訟 – torikeshi soshō) against the mayor's demolition order, and concurrently apply for a stay of execution (執行停止 – shikkō teishi). Specifically, this would be a "suspension of the continuation of procedure" (手続の続行の停止 – tetsuzuki no zokkō no teishi) to halt further steps toward vicarious execution like the issuance of the kaikoku or the actual demolition.
   • Grounds for Illegality:
     • Invalidity of the Municipal Ordinance: The primary argument would be that the municipal ordinance itself is illegal and void because it conflicts with the Fueiho framework, applying the Tokushima City criteria. If the ordinance is void, any order based on it is also void.
     • Order Exceeds Ordinance Authority or is Disproportionate: Even if the ordinance is generally valid, the demolition order might be an abuse of discretion or ultra vires. For instance, if the ordinance provision for "restoration to original state" is interpreted as applying only to incomplete construction, a demolition order for an already completed building might be illegal. Furthermore, demolition is a drastic measure; if the ordinance's aims (e.g., preventing operation in a certain area) could be achieved by less severe means (like an order prohibiting business operation), a demolition order might violate the principle of proportionality.
2. Challenging the Warning (Kaikoku) under the AEVEA:
   • Action: File a revocation suit against the mayor's kaikoku, again coupled with an application for a stay of execution. The kaikoku itself is recognized by courts as an administrative disposition subject to challenge (e.g., Osaka High Court, Decision of October 5, 1965, Hanrei Jihō No. 428, p. 53).
   • Grounds for Illegality:
     • Illegality of the Underlying Demolition Order: A kaikoku is predicated on a valid, unfulfilled legal obligation imposed by a prior disposition (the demolition order). If the demolition order is illegal or void (e.g., because the underlying municipal ordinance is void), then the kaikoku based on it is also illegal. The illegality of the duty-imposing act can generally be argued in a suit against the kaikoku.
     • Non-fulfillment of AEVEA Requirements: Argue that the stringent requirements for vicarious execution under Article 2 of the AEVEA are not met. For instance, is the non-performance of the demolition "markedly contrary to the public interest" (その不履行を放置することが著しく公益に反すると認められるとき)? Or are there alternative means to achieve compliance?
     • (Note: An argument that vicarious execution cannot be based on a municipal ordinance not directly delegated by a national law is generally not accepted. The prevailing view is that municipal ordinances, enacted under the general legislative power of the Local Autonomy Act, can serve as a valid basis for applying the AEVEA.)
3. Prohibitory Injunctions (Less Favored for This Scenario):
   While theoretically possible to seek a prohibitory injunction (差止訴訟 – sashitome soshō) against the subsequent notice of vicarious execution or the execution itself, revocation suits against the earlier dispositions (demolition order or kaikoku) combined with stays of execution are generally considered more appropriate and have less stringent requirements (e.g., the "grave harm" and supplementarity conditions for prohibitory injunctions are high hurdles).

The Role of "Legislator's Intent" and Reasonableness

In assessing conflicts between national and local laws, courts often delve into the legislative history and intent behind the national law (here, the Fueiho) to discern whether it aimed for absolute national uniformity or permitted some degree of supplementary local regulation. The reasonableness and specificity of the municipal ordinance's restrictions also play a crucial role. An overly broad municipal prohibition covering areas where the Fueiho framework would permit operation might be viewed less favorably than narrowly tailored restrictions designed to protect specific, clearly identified local sensitive facilities or areas, especially if these are not adequately covered by the broader prefectural rules.

Conclusion

The regulation of pachinko parlors in Japan serves as a clear example of the potential for tension between national regulatory schemes and the exercise of local municipal autonomy. Businesses operating in this sector must be acutely aware of both layers of regulation. Challenges to stricter municipal ordinances frequently involve complex legal arguments concerning the limits of local legislative power, the interpretation of the national Fueiho framework, and the application of principles laid down in cases like the Tokushima City Public Safety Ordinance Case. Successfully navigating these disputes requires a careful assessment of the specific ordinance, the factual context, and the available administrative and judicial remedies to protect business interests while acknowledging legitimate local concerns.