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 to resolve their disputes using internal group norms rather than state-enforced legal rules. From farmers in California's Shasta County to jewelers in midtown Manhattan, the literature describes people who create informal norms of conflict management that are faster and less expensive than formal law and that 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 formal 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 between Japan and the United States demonstrates that there is more disputing and more legal formality in the Japanese tuna market, and this Article credits a mix of economic and cultural factors for the difference. In short, by presenting a detailed case study of a highly specialized court that operates under government auspices, this Article argues that formal state law can outperform informal group norms by satisfying the business needs of close-knit merchants while simultaneously contributing to the shared values that underlie the success of their future transactions.
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