This column was updated Aug. 23, 2023, to reflect changes with court case Shen v. Simpson.
China! China! China! It’s China this and China that from state and federal lawmakers when it comes to acquiring agricultural farmland and businesses. As in no way, no how.
For any number of illogical reasons, governments of all sizes and stripes think Chinese ownership of U.S. agricultural land and acquisition of/investment in U.S. businesses are an imminent threat to democracy.
Washington Republican Rep. Dan Newhouse’s presser in introducing the Prohibition of Agricultural Land for the People’s Republic of China bill frames the PRC essentially as an evil empire:
- “We cannot allow our adversary to have control over our food supply and supply chain. This is a national security threat that cannot be ignored, and I am grateful for Rep. Newhouse’s leadership on this issue.” (South Dakota Rep. Dusty Johnson)
- “America is the land of the free — not the land owned by China. The Chinese Communist Party’s malign efforts to purchase domestic farmland is a direct threat to the American homeland.” (Pennsylvania Rep. Guy Reschenthaler)
- “China must be banned from buying our farmland because American farmland belongs to American farmers.” (Iowa Rep. Randy Feenstra)
But truth be told all this Congressional running around with one’s hair on fire is more hyperbole than based on reality.
Lawmakers say banning China from buying U.S. farmland is necessary for national security, to protect the U.S. food supply and to make agricultural land available for new farmers. But Newhouse’s bill is a solution searching for a problem that largely doesn’t exist.
The latest data shows foreigners held nearly 37.6 million acres as of Dec. 31, 2021. China owned just under 195,000 acres. By comparison, Canada tops the list at 9.66 million acres. Even if one accepts there is probably an undercount in foreign owned U.S. land recordkeeping, China is not a threat.
Not to be out done, the U.S. Senate late last month also joined in China bashing and for good measure added Russia, North Korea and Iran to a potential banned list, naming the four nations “foreign adversaries” in an amendment to the Fiscal Year 2024 National Defense Authorization Act.
States have also been very active in passing or debating laws that ban China from acquiring U.S. farmland. Twenty-four states currently prohibit or restrict foreign ownership of U.S. agricultural land. New York and New Jersey are considering bills.
But now there’s push-back from Chinese citizens living in Florida that the state’s newly enacted foreign ownership law violates the U.S. Constitution. In Shen v. Simpson plaintiffs claim SB 264 violates their ability to buy land on racial grounds as well as runs afoul of the Due Process Clause, the Supremacy Clause and Fair Housing Act law.
Plaintiffs sought a preliminary injunction to put a hold on the law that went into effect July 1.
In Florida’s Memorandum in Opposition to Plaintiffs’ Motion for Preliminary Injunction, the state claimed plaintiffs lack standing, that SB 264 is not preempted by federal law, does not violate constitutional rights, nor run afoul of FHA discrimination statutes.
On Aug. 17, U.S. district court Judge Allen Winsor tossed out the lawsuit, ruling plaintiffs were unlikely to prevail on the merits of opposing SB 262.
Winsor ruled plaintiffs wrongly argued that the Equal Protection Clause and FHA were based on national origin and race, rather than where an alien is domiciled, and that the 14th amendment to the U.S. Constitution doesn’t prevent states the right to deny foreign land ownership within their borders. Winsor also dismissed plaintiffs due process claims as vague.
An appeal is possible even as the state of Florida is already in the process of implementing SB 262.
Shen v.Simpson isn’t the first lawsuit challenging foreign ownership of U.S. land. Similar efforts occurred in the 1920s and during World War II, especially along the West Coast. A pair of 1948 Supreme Court cases – Takahashi v. Fish and Game Commission and Oyama v. California – ruled laws restricting Asian land ownership might not survive due process and equal protection challenges.
But the 1948 Supreme Court rulings dealt with resident aliens permanently living in the U.S. Shen is dealing with foreign nationals with a temporary right to reside here. A significant difference to be sure.
Still, Shen might be the tip of the iceberg on other potential lawsuits challenging foreign ownership of U.S. land. I doubt Shen will be the final word.
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