## Facts

- Washington enacted an “alien land law” barring aliens who had not in good faith declared intent to become U.S. citizens from owning or leasing certain land interests, including for agricultural purposes, with forfeiture and criminal penalties for violations.
- The Terraces, U.S. citizens and Washington residents, owned farmland in King County used for agriculture and sought to lease it for five years to Nakatsuka, a Japanese subject ineligible for U.S. citizenship under then-existing federal naturalization law.
- The Washington Attorney General threatened to enforce the statute if the lease were executed, including forfeiture proceedings and criminal prosecutions.
- The Terraces and Nakatsuka alleged they could not risk violating the statute to create a test case because the penalties were severe and enforcement was imminent.
- They argued the statute violated due process and equal protection, conflicted with the 1911 U.S.–Japan Treaty of Commerce and Navigation, and conflicted with the Washington Constitution.

## Issues

1. Whether federal equity jurisdiction permitted an injunction against threatened enforcement of a state statute imposing severe criminal and forfeiture penalties before any prosecution or forfeiture action began.
2. Whether barring aliens ineligible for citizenship (or those lacking a good-faith declaration of intent to naturalize) from leasing agricultural land violates the Due Process or Equal Protection Clauses, including as applied to citizen landowners seeking to lease to such aliens.
3. Whether the 1911 U.S.–Japan treaty granted Japanese nationals a right to lease or hold interests in agricultural land, preempting the state restriction.
4. Whether the statute conflicted with the Washington Constitution’s limitations on alien land ownership.

## Decision

- The Court held the suit fell within federal equity jurisdiction because the threatened enforcement and severe penalties effectively prevented a practical legal test through violation.
- The Court upheld the statute against Fourteenth Amendment challenges, concluding the restriction on leasing or holding agricultural land by aliens ineligible for citizenship was a permissible classification and did not violate due process or equal protection, including as applied to citizen lessors.
- The Court found no conflict with the 1911 U.S.–Japan treaty because the treaty’s property protections concerned residential and commercial leasing and trade-related activities, not agricultural land interests.
- The Court accepted the Washington Supreme Court’s interpretation that the statute did not conflict with the relevant provision of the Washington Constitution.
- The Court affirmed dismissal of the complaint on the merits.

## Legal Principles

- Federal courts may grant equitable relief against threatened enforcement of a statute when enforcement is imminent and the statute’s penalties and forfeiture consequences are so severe that parties cannot reasonably risk violating it to obtain judicial review.
- A state may restrict ownership or leasing of agricultural land by aliens ineligible for U.S. citizenship without violating the Due Process or Equal Protection Clauses, and such restrictions may also be applied to citizen landowners who seek to transfer covered land interests to such aliens.
- Treaty provisions granting rights to lease land for residential and commercial purposes and to conduct trade do not necessarily extend to agricultural land; treaty text is construed according to its specific subject matter and terms.
- Federal courts defer to a state’s highest court on the meaning of the state constitution when assessing an asserted conflict between state law and state constitutional provisions.

## Conclusion

The Supreme Court sustained Washington’s restriction on leasing agricultural land to aliens ineligible for citizenship, held that equitable relief was available to challenge the threatened enforcement, and concluded the statute neither violated the Fourteenth Amendment nor conflicted with the U.S.–Japan treaty or the Washington Constitution as authoritatively construed.


Terrace v. Thompson, 263 U.S. 197 (1923)