Burger King v. Rudzewicz
Supreme Court of the United States, 1985
Author: Joe

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

Issue:  Does the Florida ct. have jurisdiction over the ? (defendant)?

Rules:  In order for a court to impose jurisdiction over a ? it must be shown that the ? has to (1) established a substantial and continuous relationship with Bk’s Miami headquarters, (2) received fair notice from the contract documents and the course of the dealing that he might be subject to suit in Florida, (3) demonstrate how jurisdiction in that forum state would otherwise be fundamentally unfair.

1. It must be foreseeable that the ?’s conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there.  A ? cannot be haled into a forum state court if the connections are strictly random or unilateral, but instead the ? must have deliberately engaged in significant, continual activities and these activities must have manifestly availed himself of the privileges of conducting business there, and because of his activities is shielded by the benefits and protections of the laws of the forum state.
2. Jurisdiction may not be grounded on a contract whose terms have been obtained through fraud, undue influence, or overweening bargaining power.
3. Jurisdiction rules may not be employed in such a way as to make litigation so gravely difficult and inconvenient that a party unfairly is at a sever disadvantage in comparison to his opponent.

Analysis:

1. The ? argues that no ties can be made between he and the ? accept for his brief training in Miami.  However, the court finds that the ? reached out beyond Michigan and negotiated with a Florida co. for the purpose of a long-term franchise and the various benefits that would derive from affiliation with a nation-wide organization.  The fact that the district office was in Michigan is of no use to the ? because it was made known to the ? that all communications, problems, and payments were to be made to the Miami office.  The Michigan office was just an intermediate link to the main headquarters in Miami.  Because of this voluntary acceptance of a long-term contract with the Florida corporation, it cannot be said that the contact was merely random. Also, after the ? defaulted on the payments the ?, he kept the trademark and confidential business information after his termination which cased foreseeable injuries to the co. in Florida.  It is at least presumptively reasonable that ? be called to account in the forum state for such injuries.  Through his deliberate affiliation with the ?, it is reasonable foreseeable that the ? would be subject to litigation in Florida.

2. The court points to the specific contract clause stating that all legal issues will be decided in the Florida courts using Florida law.  The ? tried to argue that the contract was a boilerplate declaration in a lengthy printed contact, but the court found the ? to be an experienced, sophisticated business man and at no time was he under duress or disadvantage imposed by BK.
3. the ? tried to argue that it would be inconvenient to the ? to call witnesses from Michigan to help their case, but the court held this to be without evidence.

Conclusion: Judgment reversed. It is not unconstitutional for the Florida court to impose jurisdiction over the ?.