One of the struggles in teaching U.S. and international law to South Korean lawyers and law students is imparting a thorough understanding of the power of prior court decisions in the common law. South Korean lawyers and law students are steeped in a civil law tradition imported from Japan that finds its roots in 19th century German and French law; both of which have as their foundation the law of ancient Rome.

In this civil law system legislative enactments reign supreme and courts are generally prohibited from applying equity-based concepts that could introduce uncertainty into the law. Further the decisions of ordinary courts have no particular force beyond the parties to the controversy. In ancient Rome even the judges were mere lay persons chosen on an ad hoc basis by the litigants for that particular case and their appointment ended when the case ended.

While the term of modern-day South Korean judges is considerably longer than those of ancient Rome the same fundamental principles apply to their decisions. Thus South Korean judges methodically follow the law as set forth in legislation enacted by the National Assembly and use deductive reasoning to apply this law to each specific controversy.

These courts are generally not empowered to consider equitable concepts and they do not engage in analogous or inductive reasoning based on prior judicial decisions. Most important, they do not expect their decisions to be cited as authoritative statements of law by other courts or to be relied on by individuals or entities not involved in the litigation.

Thus when the Seoul city government argues that an administrative court decision invalidating a government regulation does not apply to a non-litigant such as Costco it is merely following that ancient civil law tradition. For the law students, lawyers, judges and even average citizens of South Korea the action of the government is self-evident. However it has become obvious that the Seoul government officials, as well as many South Korean commentators, are struggling to understand why Costco has been violating the regulation for the last few weeks without any discernable remorse or shame.

The answer to this quandary is the common law legal system of the United States to which the managers and directors of Costco are accustomed. In the common law system, court-made law is as extensive in scope as legislative enactments and often legislative enactments merely reflect the rules of law developed in prior court decisions. These courts have the power to consider concepts of equity and often use these concepts to modify or expand on what might otherwise be harsh legislative rules. Common law courts have the power to strike down legislation as unconstitutional and to reject regulations as invalid.

Most significantly, when a court strikes down legislation or declares a regulation invalid that decision applies equally to all similarly situated individuals whether or not they were litigants in the original court action. Thus for the managers and directors of Costco, coming as they do from the common law jurisdiction of the United States, the idea that a government regulation deemed invalid by a court would still be applied to similarly situated non-litigants is illogical and highly offensive to their concept of equal treatment under the law.

Thus Costco has engaged in what it views as legally justified action in disregarding a regulation already deemed invalid by a competent court. Meanwhile the Seoul city government has similarly engaged in what it views as a legally justified action in attempting to enforce the regulation.

However this clash of legal cultures has resulted in missteps on both sides. On one hand as Costco has disregarded what it perceives as an invalid law South Koreans have become incensed at the perceived willful violation of their law by an outsider. This is especially dangerous in the current chaebol-bashing atmosphere of economic democratization. Costco could easily become the focus of this popular feeling against the chaebol if it is perceived to be taking advantage of its size to the detriment of small retailers.

On the other hand when the Seoul city government found the remedies set forth in the regulation to be insufficient to deter Costco’s actions, its response of sending in inspectors as a retaliatory action only fed the narrative of South Korea as anti-foreigner. At a time when South Korea is trying to polish its international image, the last thing it needs is another situation like the Lone Star case where the foreign consensus again develops that the country is unfriendly to foreign business and investment.

Remarkably, all of this could have easily been avoided with a greater understanding of the legal culture behind the actions on each side. However until the two sides make the effort to reach that greater understanding this controversy will continue to be a rich source of material for those of us teaching comparative law in the South Korean law schools.

By Daniel Fiedler

Daniel Fiedler is a professor of law at Wonkwang University. He also holds an honorary position as the lawyer representative for international marriages in Namwon, North Jeolla Province. ― Ed.