1 Parties Appellant: Yamanashi Prefecture Appellee: Consumer Affairs Agency Japan

2 Date and time: Tuesday, June 9, 2020, 1:30 p.m.

3-Way Oral Argument (Real) Courtroom 808

4. Attendees: Appellees: Attorneys Kazuko Nakano, Toshiyuki Osuga, Hiroki Katsuyama, and Mizuki Yamamoto

Appellants: Attorney Itaru Adachi, Attorney Yo Uryu (participating as a sub-agent from the appeal trial onwards)

Attendees: Nobuhiko Itaya (Consumer Organization Japan), members of the press (NHK, Yamanashi Nichinichi Shimbun, Yamanashi Broadcasting, Television Yamanashi)

Judges: Presiding Judge Satomi Nakamura, Associate Judge Shinta Okada (Right), Associate Judge Hideyuki Seino (Left)

5. Documents to be submitted

(1) Written statement, etc.

Appellant: Appeal document, Statement of grounds for appeal, Petition

Appellee: Appeal statement

(2) Evidence

Appellant: Exhibits B15-21

Appellee: Exhibit A19

6. Progress (Our organization: ●, Yamanashi Prefecture: ○)

(Court) Is it correct to understand that the ordinance will be amended?

That is correct.

(Court) Since it is unclear exactly how the amendments will be made, please submit the details of the amendments.

It is almost certain that the penalty clause will be abolished.

(Court) How long should we wait before supplementing the revised content?

Since the prefectural assembly is in session until the end of July, I think that much leeway is necessary for amending the ordinance.

●While the loan ordinance requires the approval of the assembly, the career development program itself can be changed without the approval of the prefectural assembly. I find it very strange that it was not changed by this deadline. If the penalty clause is to be abolished, then the appeal should be withdrawn. Do you intend to withdraw the appeal?

There is no intention to withdraw the appeal. The penalty clause is integrated with the loan regulations. There is no way they will deceptively amend only the loan regulations while leaving the program provisions intact.

The court is interested in the fact that the penalty clause will be changed.

● How will the agreements that already include penalty clauses be handled? We would like that to be clarified.

There are two documents, a pledge and a contract. If the penalty clause in the contract is abolished, then that should be fine.

●I'm asking what will happen to the pledges I've signed in the past.

The penalty clause written in the pledge will be removed, so if the penalty clause is abolished, it will no longer be effective. The penalty clause in any contract concluded after the pledge will also be removed, so having the pledge will not cause any problems.

●If no problems are occurring, please make that clear.

●Please clarify the contents of the revised ordinance. The career development program and the loan ordinance are unrelated.

It is a misunderstanding to say that the loan regulations and career development programs are unrelated.

● Given that penalties are set after a participant leaves, the career development program can be changed independently of Congress.

(Court) The appellant will be asked to submit a written argument regarding the content of the amendments, including the timing of the amendments, the implementation date, and how past provisions will be handled.

Since the council is scheduled to close at the beginning of July, we would like you to submit your written application during the week beginning July 13th.

● The appellee requests the conclusion of the arguments.

(Court) Continue the arguments.

We will adjust the next deadline and the deadline will be closed.

7. Preparations for the next meeting

1. appellee

Nothing in particular.

We will respond after reviewing the other party's proposed amendments.

(2) Appellant

Arguments and evidence regarding proposed ordinance amendments, etc.

8. Schedule for future events

July 17, 2026 (Friday) Deadline for submission of appellant's documents

Tuesday, July 28, 2026, 10:00 AM - Second Oral Argument (Courtroom 808)

Apparently, an appeal was decided at the Yamanashi Prefectural Assembly. https://news.yahoo.co.jp/articles/fd112424e57dcde2411d7bcf77d5896a3da8aadb

Thank you all for your support.

After the ruling was in our favor, the Governor of Yamanashi Prefecture immediately held a press conference and announced that he would appeal. The case will now move to the Tokyo High Court.

That's the TV report.

↓

https://youtu.be/FuanS7EOCwk?si=g1sAsDSk5URXAKDN

We appreciate your continued support.

The "regional quota system," which requires students to practice medicine in a specific region after graduation, has been widely adopted by medical schools across the country. Many regional quota systems are operated in conjunction with prefectural student loan systems, and students are exempt from the obligation to repay their scholarship if they work in the designated region for a certain period of time after graduation, but otherwise they are required to repay the loan.

However, the regional quota system operated by Yamanashi Prefecture is characterized by its extremely strict content, even by national standards: if a student is unable to work in a designated area for a designated period of time, 10% interest is added to the total scholarship amount of 9.36 million yen, and an additional high penalty of 8.4242 million yen is imposed.

The Agency filed a lawsuit against Yamanashi Prefecture seeking an injunction to block the breach of contract clause, claiming that the high breach of contract clause unfairly restricts the future choices of young people and violates the Consumer Contract Act.

Then, on January 20, 2026, the Kofu District Court handed down a groundbreaking ruling that fully accepted our organization's claims .

The court ruled that all of the following clauses were invalid under Article 9, Paragraph 1, Item 1 and Article 10 of the Consumer Contract Act, and ordered Yamanashi Prefecture to cease using these clauses.

• Penalty clause in the pledge required to be submitted when taking the regional quota exam
• Penalty clause in the contract required to be concluded after passing the national medical examination and before starting training

From the perspective of protecting the right of self-determination of young people, this is an extremely important decision in which the judiciary has clearly established a check, and we at the organization highly appreciate this .

■ Key issues and judgments outlined in the ruling

① Are contracts with regional physicians considered "consumer contracts"?

The court found that the regional physician was in a position to enter into a contract as a consumer, taking into account the following points:

• Regional physicians are scheduled to enter into employment contracts with medical institutions within the prefecture for the next nine years.
• You are a consumer at the time of receiving the scholarship, and you must enter into a career development program contract in order to receive the grace period or exemption.

② Is the penalty clause "accompanying the termination of a consumer contract"? (Article 9, Paragraph 1, Item 1 of the Consumer Contract Act)

Although the wording appears to be based on objective facts, the court took note of the fact that in reality it is often applied in situations where a doctor in a regional quota system voluntarily gives up on continuing work and wishes to work at another hospital, and determined that it is essentially a penalty clause that assumes contract termination .

3) Does the penalty amount of 8,244,000 yen exceed the "average damages"?

The court ruled that the total penalty amount exceeded average damages and was therefore invalid , taking the following points into consideration:

• The prefecture's claim that the basis for the 7.5 million yen burden is unclear
• There are no similar systems in other local governments
• The damages are considered to be fully compensated by the return of the tuition funds and interest (10%).

④ Applicability of Article 10 of the Consumer Contract Act (violation of the principle of good faith)

Taking the following points into consideration, the court ruled that the clause was invalid as it unilaterally harmed the interests of consumers .

• The imposition of a large penalty fee despite the fact that the prefecture has suffered no substantial damage is unfair and is recognized as imposing a heavier obligation on consumers than would be the case under general legal principles.
• If the penalty is not paid, it will be extremely difficult to change jobs, significantly restricting the freedom to choose one's career.
• The contract is a template unilaterally presented by the prefecture, leaving no room for negotiation.

■ Hopes for the future and my views as a plaintiff

This ruling is extremely significant in that it clearly puts a stop to the excessive burden and unreasonable restrictions that have been imposed on young people by incorporating high penalty fees into the regional quota system. The NGO strongly supports this decision and calls for the following points regarding the future operation of the system.

• First, forcing young people to pledge large penalty fees at the very start of their lives by taking university entrance exams is a serious problem that significantly undermines their right to self-determination. Forcing them to predict their futures more than six years into the future and agree to contracts that include large penalty fees excessively restricts young people's future choices and is completely unacceptable.
• Second, there are various measures to address the policy issue of uneven regional distribution of doctors, such as improving working conditions and reskilling female doctors. Among these, the use of contracts that impose high penalty fees on young people in economically disadvantaged positions is the most inappropriate measure, and the law should not recognize its effectiveness.
• Third, the career development program is essentially a system to support the career development of physicians. Since it is not simply a contract to secure labor, even if a trainee changes his or her career path, this cannot immediately be considered a "damage." If penalty clauses like this one were to spread nationwide, the system would deviate significantly from its original principles.
• Furthermore, we have received reports that residents who have requested to withdraw have been "treated like criminals" and "not been able to receive the specialized training they desired." Personal attacks and obstruction to obtaining specialist qualifications are serious disadvantages beyond financial ones. The fundamental problem lies in the vicious cycle of a shortage of doctors and working doctors, and excessive workloads, and it is unacceptable to force the solution onto individual applicants and residents through contracts.

We strongly hope that this ruling will serve as an opportunity to shift to a system that does not unfairly restrict the future of young people, and that an environment will be created in which doctors can choose their careers with peace of mind.

1. Parties Plaintiff: Consumer Affairs Agency of Japan Defendant: Yamanashi Prefecture

2 Date and time: Tuesday, October 7, 2020, 1:10 p.m.

3. Oral Argument (Web Conferencing System)

4. Attendees Plaintiffs: Attorney Kazuko Nakano, Attorney Toshishi Osuga, Attorney Hiroki Kuzuyama, Attorney Mizuki Yamamoto, Mr. Nobuhiko Itaya (Consumer Organization of Japan)

Defendant: Attorney Adachi Itaru and prefectural government officials (designated representatives: Takehana Toshiya, Hayakawa Hidehiko, Ito Tetsuji, Higasaeko, Nakajima Hideya)

Spectators: None

Judges: Judge Kenichiro Masunaga, Judge Jun Baba, and Judge Ji Takahashi

5. Documents to be submitted

(1) Written statement, etc.

Plaintiff: Fifth preliminary document

Defendant: 8th Preparatory Document

(2) Evidence

Plaintiff: Ko 18

Defendant: Otsu 12-14

6. Progress

The trial will conclude after reviewing the documents and evidence submitted by both parties. The court has no particular opinion. See below for the date of the verdict.

7. Preparation for the next session

(1) Plaintiff

Nothing in particular.

Nakano, Osugi, and Yamamoto are scheduled to appear at the Kofu District Court on the day the verdict is announced.

(2) Defendant

Nothing in particular.

8. Subsequent dates

January 20, 2026 (Tuesday) 13:10 ~ Oral Argument (Declaration of Judgment)

1. Parties Plaintiff: Consumer Affairs Agency of Japan Defendant: Yamanashi Prefecture

2 Date and time: Tuesday, August 5, 2020, 11:00 a.m.

3. Oral Argument (Web Conferencing System)

4. Attendees Plaintiffs: Attorney Kazuko Nakano, Attorney Toshishi Osuga, Attorney Hiroki Kuzuyama, Attorney Mizuki Yamamoto, Mr. Nobuhiko Itaya (Consumer Organization of Japan)

Defendant: Attorney Adachi Itaru and prefectural government officials (designated representatives: Takehana Toshiya, Hayakawa Hidehiko, Ito Tetsuji, Higasaeko, Nakajima Hideya)

Spectators: None

Judges: Judge Kenichiro Masunaga, Judge Jun Baba, and Judge Ji Takahashi

5. Documents to be submitted

(1) Written statement, etc.

Plaintiff: Fourth preliminary document

Defendant: 6th Preparatory Document, 7th Preparatory Document

(2) Evidence

Plaintiff: None

Defendant: Otsu 11

6. Progress

(1) When the court asked the defendant’s counsel whether it was necessary to refute the plaintiff’s fourth preparatory brief, the defendant’s counsel responded that they would refute it to the extent that it would not overlap with the plaintiff’s fourth preparatory brief.

(2) The court instructed both parties to proceed with the case so that they would not miss any points in their arguments or evidence, as the trial would be concluded next time.

7. Preparation for the next session

(1) Plaintiff

A. Documents to be submitted

① Preparatory documents (deadline September 26th)

B. Other matters

① None

(2) Defendant

A. Documents to be submitted

① Preparatory documents (deadline September 26th)

B. Other matters

② None

8. Subsequent dates

October 7, 2025 (Tue) 13:10 ~ Oral Argument (Web Conferencing System)

1. Parties Plaintiff: Consumer Affairs Agency of Japan Defendant: Yamanashi Prefecture

2 Date and time: Tuesday, April 15, 2020, 2:00 p.m.

3. Oral Argument (Web Conference System)

4. Attendees Plaintiff: Attorney Kazuko Nakano, Attorney Toshishi Osuga, Attorney Hiroki Katsuyama, Attorney Mizuki Yamamoto, Mr. Nobuhiko Itaya (Consumer Organization Japan)

Defendant: Attorney Adachi Itaru and prefectural government officials (designated representatives)

Spectators: None

Judges: Judge ●, Judge Jun Baba, Judge ●

5. Documents to be submitted

(1) Written statement, etc.

Plaintiff: Plaintiff 3rd preliminary document

Defendant: None

(2) Evidence

Plaintiff: None

Defendant: None

6. Progress

(1) The plaintiff's third preparatory brief was presented, and the defendant was to prepare a rebuttal to the allegations made in the brief and a response to the requests for clarification by the next hearing.

(2) The court asked the defendant to clarify the specific date when the career development program contract will be created (according to the court, this was for the purpose of ensuring accuracy), and the defendant stated that he would respond by the end of April.

(3) The court asked the defendant whether, assuming that the written pledge made at the time of application to medical school is legally binding, the contract based on the written pledge constitutes a consumer contract, i.e., whether it is correct to interpret that applicants are consumers. The defendant stated that it will clarify its view by the next hearing.

(4) The court asked the plaintiff what it thought about the validity of the pledge given at the time of applying to medical school in cases where a licensed physician is considered a business operator at the time the career development program contract is created, and decided that the plaintiff should present its case by the next hearing.

7. Preparation for the next session

(1) Plaintiff

A. Documents to be submitted

① Preparatory documents (Deadline May 30th)

B. Other matters

① None

(2) Defendant

A. Documents to be submitted

① Preparatory documents (Deadline May 30th)

B. Other matters

② Answer the question regarding the timing of creating the career development program contract

8. Next and future dates

August 5, 2025 (Tuesday) 11:00am Oral Argument (Web Conferencing System)

1. Parties Plaintiff: Consumer Affairs Agency of Japan Defendant: Yamanashi Prefecture

2 Date and time: Tuesday, February 4, 2020, 11:00 a.m.

3. Method: Online oral argument (held at Hikari General Law Office)

4. Attendees Plaintiff: Attorney Kazuko Nakano, Attorney Shunji Osuga, Attorney Hiroki Katsuyama, Attorney Mizuki Yamamoto, Mr. Nobuhiko Itaya (Consumer Organization Japan)

Defendant: Attorney Adachi Itaru and three prefectural government officials (designated representatives)

Judges: Judge Kazunori Nitta, Judge Jun Baba, and Judge Takuya Okabe

5. Documents to be submitted

(1) Written statement, etc.

Defendant: Defendant No. 5 Preparatory Document

(2) Evidence

Defendant: Otsu 8-10

6. Progress

The court confirmed the following:

Court) In response to the plaintiff's request for clarification, Exhibit 10 (written pledge for scholarship application) was submitted, but I would like to confirm whether this was in response to the plaintiff's request for clarification.

Attorney Katsuyama) The defendant's written submission was close to the trial date, so the review has not been completed.

Court) Please prepare the defendant's response to the plaintiff's request for clarification and the defense to the defendant's fifth preparatory brief by the next hearing.

Attorney Nakano: The defendant has previously stated in court that by the end of this fiscal year (March 31, 2025), they will consider deleting the clause in the career development program contract that states that "marriage, nursing care, child-rearing, etc. will not be considered as unavoidable reasons for approving the program extension." What is the status of this deletion?

Attorney Adachi) Under consideration

7. Preparation for the next session

(1) Plaintiff

A. Documents to be submitted

① Rebuttal to Defendant No. 5's Preparatory Brief (Deadline: April 8th)

B. Other matters

② None

(2) Defendant

A. Documents to be submitted

① None

B. Other matters

③ None

8. Next and future dates

・Tuesday, February 18, 2025, 14:00 Lawyers' meeting for the next hearing (WEB)

Monday, March 24, 2025, 1:30 p.m. Lawyers' meeting for the next hearing (WEB)

・Oral argument on Tuesday, April 15, 2020, 2:00 p.m.

(The plaintiffs' attorneys are scheduled to appear online at the Hikari Sogo Law Office.)

1. Parties Plaintiff: Consumer Affairs Agency of Japan Defendant: Yamanashi Prefecture

2 Date and time: Tuesday, November 19, 2020, 11:00

3. Oral Argument Date (Courtroom No. 211)

4. Attendees Plaintiff: Attorney Kazuko Nakano, Attorney Shunji Osuga, Attorney Hiroki Katsuyama, Attorney Mizuki Yamamoto, Mr. Nobuhiko Itaya (Consumer Organization Japan)

Defendant: Attorney Itaru Adachi and four prefectural government employees (designated representatives)

Spectators: Unidentified

Judges: Judge Kazunori Nitta, Judge Jun Baba, and Judge Takuya Okabe

5. Documents to be submitted

(1) Written statement, etc.

Plaintiff: Plaintiff second preliminary document

Defendant: Defendant No. 4 Preparatory Document

(2) Evidence

Plaintiff: Ko 16-17

Defendant: Otsu 6-7

6. Progress

(1) The court confirmed the following:

① Does the "expression of intention" in the second line of the last paragraph on page 4 of Plaintiff's second preparatory brief refer to the Pledge or the Agreement?

→ Plaintiff's attorneys are both.

② In the last paragraph of page 3 of the Defendant's Fourth Preparatory Brief, it is stated that the Plaintiff does not allege that the Pledge in question violates Article 10 of the Consumer Contract Law, but this does not appear to be the case when looking at the complaint. The Plaintiff is alleging that the Pledge in question violates Article 10 of the Consumer Contract Law, and the Defendant should make his allegations on this premise.

→ Defendant's attorney: Understood.

③ I would like to confirm the progress regarding the additional lawsuit.

→ Plaintiff's attorney We had planned to file the lawsuit today, but the defendant responded that they would revise the documents around the end of the fiscal year, so we will refrain from filing the lawsuit at this time.

④ Respond to the request for clarification on page 8 of Plaintiff's second preparatory brief.

→ Defendant's attorney: Understood.

(2) The court requested the defendant to respond to the plaintiff's second preparatory brief and to respond to the litigation direction at today's hearing by the next hearing.

7. Preparation for the next session

(1) Plaintiff

A. Documents to be submitted

① None

B. Other matters

① None

(2) Defendant

A. Documents to be submitted

① Responses to written rebuttals and requests for clarification (Deadline December 23rd)

B. Other matters

② None

8. Next and future dates

・Oral argument on Thursday, February 4, 2020, 11:00 a.m.

(The plaintiffs' attorneys are scheduled to appear online at the Hikari Law Office.)

1. Parties Plaintiff: Consumer Affairs Agency of Japan Defendant: Yamanashi Prefecture

2 Date and time: Monday, September 9, 2020, 2:00 p.m.

3. Method Preparation Date (WEB)

4. Attendees Plaintiff: Attorney Kazuko Nakano, Attorney Toshishi Osuga, Attorney Hiroki Katsuyama, Attorney Mizuki Yamamoto, Mr. Nobuhiko Itaya (Consumer Organization Japan)

Defendant: Attorney Itaru Adachi and four prefectural government employees (designated representatives)

Spectators: None

Judges: Judge Kazunori Nitta and Judge Takuya Okabe

5. Documents to be submitted

(1) Written statement, etc.

Plaintiff: None

Defendant: Defendant No. 3 Preparatory Document

(2) Evidence

Plaintiff: None

Defendant: None

6. Progress

(1) Defendant's third preparatory brief has been presented, and Plaintiff is to prepare a rebuttal to the allegations made in the brief by the next hearing.

(2) The court pointed out to the defendant that it did not appear that the defendant had refuted the claim that the provisions of the pledge constituted Article 10 of the Consumer Contract Act. The court then decided that the defendant should consider supplementing its argument.

(3) Plaintiff asked the Defendant again whether it would delete the clause in the career development program contract stating that "marriage, elderly care, child-rearing, etc. will not be considered as unavoidable reasons for granting an extension to the program," for which the Defendant sought clarification. However, the Defendant merely repeated its previous response that it was currently considering the matter.

(4) Because the case is attracting public attention, the plaintiff requested that the proceedings be held as an oral argument hearing, and the court accepted this request, and the next hearing was designated as an oral argument hearing. (The plaintiff's counsel is scheduled to appear at the Kofu District Court at the next hearing, but since the enforcement of the revised Civil Procedure Act has made it possible to use online conference systems for oral argument hearings, it is possible that the counsel will appear via an online conference system in the future.)

7. Preparation for the next session

(1) Plaintiff

A. Documents to be submitted

① Preparatory documents (Deadline October 31st)

B. Other matters

① None

(2) Defendant

A. Documents to be submitted

① None

B. Other matters

② None

8. Next and future dates

・Oral argument on Tuesday, November 19, 2020, 11:00 a.m.

(Kofu District Court, Courtroom 211. Plaintiffs' attorneys are scheduled to appear.)