The Midrash (90:5) writes that Yehudah argued to Yosef that the Torah says, "V'im ain lo v'nimkar b'gneivaso," only if someone has no money to pay his debts is he sold into slavery. Since Binyamin can pay, he should be freed.
Yosef was posing as the viceroy of Egypt; the issue at at hand was what Binyamin's penalty should be under Egyptian law. Why did Yehudah think it would make any difference to Yosef/ the viceroy what the din Torah in this case should be?
Chazal tell us that Hashem looked into the Torah and created the world -- everything in creation functions according to Torah. I saw in the sefer Bein HaMishpisayim that this idea was so ingrained in the consciousness of the Shevatim that they could not imagine that Binyamin would receive a punishment that was at odds with what the Torah dictated. Yehudah's was not making a legal argument to Yosef, but was simply stating a metziyus -- no other punishment is conceivable.