Burger King Corp. v. Rudzewicz

Brief Fact Summary.

Two men jointly buy a Burger King franchise and fail to make payments. Burger King sues the men in Florida and Defendants object to personal jurisdiction.

Synopsis of Rule of Law.

A court must look at a defendants actions directed toward the forum state in determining minimum contacts.

Facts.

Defendants jointly buy a Burger King franchise in Detroit Michigan. Defendants negotiated the deal with Plaintiffs Michigan office and Miami headquarters and were eventually awarded the franchise. Defendant MacShara attended management training in Florida, Defendant Rudzewicz purchased equipment for the restaurant from the Burger King office in Florida, and the Defendants were to send franchise and royalty payments to Burger King in Florida. The choice-of-law clause in the franchise agreement also stated that Florida law governed. Defendants fall behind on payments and Plaintiff Burger King sues.

Issue.

To establish personal jurisdiction must the court look to a defendants purposeful actions in determining minimum contacts?

Held.

Yes. A court must look at a defendants actions directed toward the forum state in determining minimum contacts. Judgement of the Court of Appeals is reversed and the case is remanded for further proceedings consistent with the opinion.

Dissent.

Justice Justice Stevens with Justice White dissenting Personal jurisdiction rests primarily on the choice-of-law clause which is not enough to establish minimum contacts. It is fundamentally unfair to allow the choice-of-law clause to have that much power because there is significant bargaining disparity between the franchise and the franchisee.