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Burger King v. Rudzewicz Case Brief

Summary of Burger King v. Rudzewicz
471 U.S 462  [1985]

Relevant Facts: Ant is a Florida corp whose principal offices are in Miami. It conducts most of its business through a franchise operation, under which franchisees are licensed to use Ant’s trademarks and service marks in leased standardized restaurant facilities for a period of 20 years. The governing contracts provide that the franchise relationship is established in Miami and governed by Florida law, and call for payment of all required monthly fees and forwarding of all relevant notices to the Miami headquarters. The Miami headquarters sets policy and works directly with the franchisees in attempting to resolve major problems. Day-to-day monitoring of franchisees, however, is conducted through district offices that in turn report to the Miami headquarters. Appellee is a Michigan resident who, along with another Michigan resident, entered into a 20-year franchise contract with appellant to operate a restaurant in Michigan. Subsequently, when the restaurant’s patronage declined, the franchisees fell behind in their monthly payments. After extended negotiations among the franchisees, the Michigan district office, and the Miami headquarters proved unsuccessful in solving the problem, headquarters terminated the franchise and ordered the franchisees to vacate the premises. They refused and continued to operate the restaurant

Legal Issue(s): Whether the Federal Ct in Florida has personal jurisdiction over Rudzewicz without offending Due Process?

Court’s Holding: Yes

Procedure: Fed. D. Ct (rejected 12(b));  trial award for Burger K.  Ct of App reversed; S. Ct. Reversed.

Law or Rule(s): Prior negotiations and contemplated future consequences, along with the terms of the K and the parties’ actual course of dealing that determine whether the Df purposefully established minimum contacts within the forum state.

Court Rationale: There are no physical ties to Florida attributed to Rudy  Rudy did not maintain offices in Florida. Rudy has not even visited there.  Rudy deliberately “reached out beyond” Michigan and negotiated w/ a Fl corporation for the purchase of a franchise.  This franchise dispute grew directly out of “a contact which had a substantial connection w/ that State.” Rudy knew that he was affiliating himself with an enterprise in FL.  He voluntarily accepted the regulation of his business from Burger King’s Miami Hqs.  The parties’ repeated course of dealing confirmed that decision making authority vested in Miami.  The franchise agreement Rudy executed expressly provided that the laws of Fl would govern franchise disputes.

Plaintiff’s Argument: [respondent Rudy] Res did not maintain a place of business, have any employees, or license his business in FL.  Res products were not delivered into the stream of commerce expecting residents of FL to purchase them.  Res only did business in MI

Defendant’s Argument: Res entered a valid agreement to subject all franchise disputes in accordance with Fl laws.  Res paid Miami the franchise fees of significant amounts.  Res purposely availed himself of the privileges and benefits of the laws of Fl.



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