Civil Procedure Case Brief # 6

Title and Citation: Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985)

Identities of Parties: P (FL Burger King Corporation) sued the D (MacShara and
Rudzewicz) for non-payment under franchise agreement.

Procedural History: P brought a diversity suit against D in the Southern District of
Florida (for damages, injunctive relief, costs and lawyer fees). D moved to dismiss
on the grounds that the court did not have personal jurisdiction over them because
they did not have sufficient minimum contacts with the state. The court denied D
motion and ruled that jurisdiction was proper under Floridas long arm statute. The
court entered judgment in favor of P and D appealed. On appeal, the 11
th
circuit
court held that while D had sufficient minimum contacts with the state of Florida
to satisfy the states long arm statute, the exercise of personal jurisdiction was
fundamentally unfair and was a violation of due process. P appealed to U.S Supreme
Court.

Facts: D applied for Burger King Corp. franchise in Detroit, and negotiated the deal
with P in MIs district office and Miami headquarters. The contract said that the
franchise relationship would be established in Miami (where P principal offices are).
The D were granted franchise and purchased $165,000 in restaurant equipment
from P corporate division in Miami. Under the agreement, D had to give franchise
and royalties to P in Miami headquarters. Due to poor profit D were not able to
make their monthly payments to P. P gave D a notice to vacate the premises, since D
did not comply the P sued D for breach of contract and 228, 875 in damages (and
infringement of P trademarks and service marks) in federal district court in FL.

Issue(s): Does the D have minimum contacts within the forum state (FL), where
applying jurisdiction would not violate the notions of fair play and substantial
justice (14
th
amendment Due Process Clause)?

Holding and Rule: Yes, when determining whether a D satisfies the minimum
contacts requirement for personal jurisdiction, the court has to look at whether the
D purposely availed itself within the forum state, (look at purposefully directed
activities of the D toward the forum state). Also look at whether the harm arising or
relating to those activities are the cause of the litigation.

Courts Reasoning: When determining if a defendant satisfies the minimum
contacts requirement for personal jurisdiction, the court must look to the
purposefully directed activities of the defendant toward the forum state and
whether the harm arising out of or relating to those activities are the cause of the
litigation. Once a court has concluded that minimum contacts exist between the
forum state and the defendant, the court must consider whether fair play and
substantial justice would be offended if the defendant must defend himself in the
forum state. Factors that help resolve this question include the defendants burden if
jurisdiction is imposed, the forum states interest in imposing jurisdiction, the
plaintiff's interest in obtaining relief, the interstate judicial system's interest in
obtaining efficient resolution of controversies, and the furtherance of fundamental
substantive social policies. If the defendant purposefully directed his activities
toward the forum state, the defendant must present a compelling case that these
factors indicate jurisdiction would be unreasonable. Although Rudzewicz had no ties
to Florida and did not maintain any Florida offices, he deliberately negotiated with
representatives outside his home state of Michigan and finalized a deal with a
corporation he knew was located in Florida. The course MacShara attended to get a
franchise was held in Florida. Any franchise fees Rudzewicz did pay were sent to
Florida. Rudzewicz reasonably should have known that he was affiliating himself
with an organization based in Florida and he might be hailed to court in that state
for harm arising out of or relating to his conduct. Furthermore, the contract
Rudzewicz signed acknowledged that the Burger King Headquarters in Miami
regulated the franchise. It is not unreasonable to grant Florida personal jurisdiction
over Rudzewicz. It should be noted that the required minimum contacts are not
established by contracts obtained by fraud, undue influence, or unequal bargaining
power. Such contracts may in essence deprive defendants of their day in court. The
contract in this case, however, did not fall into any of these categories.

Judgment and Order: The court of appeals decision is reversed.