In Act III, Scene 1, both Mercutio and Tybalt are killed in a street fight. Mercutio is stabbed by Tybalt while Romeo is attempting to break up the fight. Once Mercutio dies, Tybalt, who had run away, inexplicably returns to the scene where he is promptly challenged and killed by the grieving Romeo. When the Prince arrives, he listens to Benvolio, who had been a witness to the violence, give an account of the fight....
In Act III, Scene 1, both Mercutio and Tybalt are killed in a street fight. Mercutio is stabbed by Tybalt while Romeo is attempting to break up the fight. Once Mercutio dies, Tybalt, who had run away, inexplicably returns to the scene where he is promptly challenged and killed by the grieving Romeo. When the Prince arrives, he listens to Benvolio, who had been a witness to the violence, give an account of the fight. Benvolio explains truthfully, although Lady Capulet says he is lying. Her version, however, is actually full of lies, claiming that the Montagues had ganged up on Tybalt. She demands the death penalty for Romeo. The Prince listens and his judgement is that Romeo should be banished from Verona. This verdict is unacceptable to Lady Capulet because earlier in the play the Prince had decreed that the penalty for fighting in the streets would be death, with no exceptions.
The Prince's decision is fair for three reasons. First, Tybalt instigated the fight by challenging Romeo and then insulting him by calling him a "villain." Second, even though Mercutio's death was somewhat of an accident, Tybalt was responsible and should have received the Prince's penalty of death. Third, because Tybalt returned to the scene, it is fair to believe that Romeo was simply defending himself against a man who had earlier threatened him.
One might also argue that the Prince's decision was unfair. One argument (Lady Capulet's) might claim that Romeo should suffer the death penalty because that was the law and Romeo should have understood that fighting in the street would bring the harshest judgement. Another argument that Romeo should face the death penalty is that Romeo was actually at fault for Mercutio's death as well as Tybalt's. Romeo should have initially fought his own battle and not allowed his friend to take his place. Romeo even admits this just before Tybalt returns:
This gentleman, the Prince’s near ally,
My very friend, hath got this mortal hurt
In my behalf. My reputation stained
With Tybalt’s slander—Tybalt, that an hour
Hath been my cousin! O sweet Juliet,
Thy beauty hath made me effeminate
And in my temper softened valor’s steel.
Another way to look at the decision would be to argue that even banishment was totally unfair to Romeo. After all, he did all he could to attempt to stop the fighting between Tybalt and Mercutio. He backed down to Tybalt and even told Tybalt that he loved him. When Mercutio was stabbed, Romeo was only trying to break things up. Tybalt was at fault for virtually everything that happened, and Romeo was only reacting to the shock of seeing his best friend dead.