Burger King Corp. v.

Rudzewicz Brief Fact Summary P, a Florida corporation, and D, Michigan residents, had a franchise agreement specifying that D may be subject to suit in Florida. P sued D in Florida federal court based on diversity of citizenship for nonpayment under the franchise agreement. D moved to dismiss on the grounds that Florida did not have personal jurisdiction over D. Rule of Law When the D has a business relationship and agreement with a corporation located in the forum state and there is a forum-selection clause in the agreement, the forum state may exercise personal jurisdiction if the long-arm statute permits. If exercising jurisdiction would cause a grave hardship to the D, then exercising jurisdiction would violate due process. Facts Rudzewicz and MacShara (D), residents of Michigan, had a contract with Burger King (P) as franchisees for 20 years. The contract said that the franchise relationship would be established in Miami (where Ps principal offices are) and that the relationship would be governed by Florida law. Ds fell behind in monthly payments and P brought a diversity action in federal court in Florida. Ds argued that the court lacked jurisdiction because Ds were residents of Michigan and the claim did not "arise" in Florida. PH The Court said the claims did arise under the Florida long-arm statute and found for Plaintiff. The Court of Appeals reversed on the grounds that exercising jurisdiction would offend the "fundamental fairness of due process." P appealed. Issue May a court may exercise personal jurisdiction on a franchisee in an action for breach of contract when the franchisee voluntarily accepts long-term and exacting regulation by the franchisor's headquarters, the franchisee had notice that he may be subject to suit in the forum state, and the franchisee would not be gravely disadvantaged by exercising jurisdiction in the forum state? Held Yes. Reversed and remanded. o The general rule is that D must have minimum contacts with the forum state so that Ds conduct and connection are such that D can reasonably foresee being hailed into court there. o In addition, the court must consider whether asserting personal jurisdiction will comport with "notions of fair play and substantial justice."

If litigation in the forum state would cause a "severe disadvantage," minimum contacts are not enough. o The contract term stating that the franchise relationship would be governed by Florida law constituted "purposeful availment" of the benefits and protections of Florida law by the D. When a contract calling for a certain forum is not made under duress or misrepresentation then jurisdiction over the Ds is proper unless the Ds would be inconvenienced to such an extent that having to litigate in the forum state would be unconstitutional. Dissent. Ds did not expect their products to go to Florida. All of their property, business, and payroll taxes were payable in Michigan. In addition, the contract language was non-negotiable boilerplate language and thus should not control the decision. Ds typically dealt with P through its office in Michigan, not Florida. Discussion This majority's opinion suggests that forum selection clauses will be honored unless the D would suffer grave hardship as a result.