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 defendant’s 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 Plaintiff’s 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 defendant’s purposeful actions in determining minimum contacts?

Held.

Yes. A court must look at a defendant’s 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.

Discussion.

1. Defendants have sufficient minimum contacts with Florida that make personal jurisdiction appropriate.
2. Allowing personal jurisdiction would not offend the notions of fair play and substantial justice.
3. Plaintiffs completed sufficient purposeful actions toward Florida; including their negotiations with Burger King’s Florida headquarters, their acceptance of the contract with the Florida choice of law provisions, their long standing affiliation with Burger King, the purchasing of equipment from the Florida office, and the making of payment to Burger King’s Florida address. These actions make personal jurisdiction proper.
4. Plaintiffs were effectively on notice that they could be sued in Florida, and the actions above make personal jurisdiction proper.