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Legal scholars have long emphasized the corrosive impact of conflict on long-term commercial and interpersonal relationships. To minimize the negative consequences of such conflict, members of close-knit groups who anticipate future interactions create ways of resolving their disputes with reference to internal group norms rather than relying on state-mandated legal rules. From farmers in California’s Shasta County to jewelers in midtown Manhattan and neighbors in Sanders County, the literature describes people who create norms of conflict management that are faster and less expensive than relying on formal law, and lessen the harm that conflict causes to their relationships. This article tells a different story. It describes a tightly-organized group of commercial traders—tuna merchants in Tokyo—who are repeat players in a discrete marketplace where there are regular problems with the quality of auctioned goods. Rather than ignoring those problems or quietly resolving them with reference to informal market norms, Tokyo’s tuna merchants make use of a highly specialized court created by the state—the Tuna Court—that follows rules and procedures that are contained in a government ordinance. The supposed disadvantages of legal rules are nowhere apparent. The Tuna Court is fast and inexpensive, and the process of articulating and resolving claims serves to strengthen individual relations and the cohesion of the market community. A comparison of conflict over auctioned tuna in Japan and the US demonstrates that there is more disputing and more legal formality in the Japanese market, and credits a mix of economic and cultural factors for the difference. In short, by presenting an example of a highly specialized court that operates under state auspices, this article argues that formal law can outperform informal norms by satisfying the business needs of close-knit merchants while simultaneously contributing to the shared values that ensure the success of their future transactions.


Law and Norms, Comparative Law, Commercial Law, Japan, Courts

Publication Title

California Law Review

Publication Citation

94 Cal. L. Rev. 313 (2006).