Burger King Corp. v. Rudzewicz

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Brief Fact Summary.

Burger King, a Florida corporation, sued Rudzewicz, a Michigan resident, for breach of a franchise agreement. The Florida district court upheld jurisdiction over Rudzewicz based on Florida’s “long arm” statute. Judgment was entered for Burger King after a bench trial in the district court. The Court of appeals reversed, rejecting Florida’s assertion of jurisdiction over Rudzewicz.

Synopsis of Rule of Law.

Where a commercial actor has purposefully availed himself of activities aimed at residents of a forum, he must present a compelling case that the existence of other considerations render jurisdiction over him unreasonable.

Points of Law - Legal Principles in this Case for Law Students.

Burger King further explains that this interest is especially acute in cases where the out-of-state actor intends to be profited by its contact with the forum state:Moreover, where individuals purposefully derive benefit from their interstate activities, it may well be unfair to allow them to escape having to account in other States for consequences that arise proximately from such activities; the Due Process Clause may not readily be wielded as a territorial shield to avoid interstate obligations that have been voluntarily assumed.

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Facts.

Burger King, a Florida corporation, sued Rudzewicz, a Michigan resident, for breach of a franchise agreement, asserting that that the Florida court had jurisdiction over Rudzewicz based on Florida’s “long arm” statute. The long arm statute provided for jurisdiction over a nonresident for an alleged breach of contract by the nonresident if the cause of action arose from the alleged contractual breach. The district court found the Florida’ court’s exercise of jurisdiction over Rudzewicz based on the long arm statute did not offend due process, and entered for Burger King after a bench trial in the district court. The court of appeals reversed.

Issue.

Did the Florida court properly exercise jurisdiction over Rudzewicz?

Held.

Yes. The district court’s exercise of jurisdiction pursuant to Florida’s long arm statute did not offend the traditional notions of fair play and justice embodied in the due process clause of the Fourteenth Amendment.

Dissent.

Justice Stevens

The dissent argued that there was significant unfairness in requiring the franchisee in these or similar circumstances to defend a case of this kind in another state’s forum. The dissent quoted some of the reasoning of the court of appeals’ decision — which concluded that Rudzewicz did not have reason to anticipate a suit outside of Michigan — as more persuasive than the majority’s.

Discussion.

For jurisdictional purposes, an individual’s contract with an out of state party alone does not, in and of itself, automatically establish minimum contacts with that party’s home forum; factors including the parties’ prior negotiations, contemplated future consequences, terms of the contract, and the parties’ actual course of dealing must be evaluated to determine whether the defendant purposefully established minimum contacts with the forum.

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