Burger King (BK) is headquartered in Miami. Its franchise contracts are governed
ID: 457691 • Letter: B
Question
Burger King (BK) is headquartered in Miami. Its franchise contracts are governed by
Florida law. Rudzewicz had a Michigan franchise that was not doing well. BK cancelled the franchise and told Rudzewicz to vacate the restaurant. Rudzewicz refused and kept running it. BK filed suit in federal court in Florida, claiming that Rudzewicz was in breach of contract. Rudzewicz claimed that the Florida federal court did not have juris- diction, because he was a Michigan resident and the restaurant was in Michigan. The district judge held that under Florida’s long-arm statute, the contract Rudzewicz signed made him subject to litigation in Florida. The court of appeals reversed, ruling that fair- ness did not allow jurisdiction in Florida. What would you think the Supreme Court held?
Explanation / Answer
The Supreme Court held that in this case the franchise agreement with Burger King allowed Rudzewicz to benefit from an association with a Florida corporation for twenty years. The court had find that Rudzewicz had continuing and direct contacts with Burger King. It was evident that Rudzewicz’s contacts were purposefully allowed the state to exercise personal jurisdiction despite that those contacts were minimum. In the contract it was indicated that Florida law would apply. Therefore it should not be a shock for defendant that Burger King will sue Rudzewicz there for a breach of the contract in light of the clear contractual terms of the agreement. Also Rudzewicz had not shown that they would be unfairly prejudiced or harmed by a trial in Florida and the purposeful involvement of Rudzewicz in the contract met the minimum contact requirements.
The Supreme Court concluded that the defendants Rudzewicz purposefully availed themselves of the protections of the forum state Florida and therefore they are subject to jurisdiction there. The Court reasoned that the defendants had a substantial and continuing relationship with Burger King in Florida. Also it was evident that due process was not violated because the defendants Rudzewicz should have reasonably anticipated being summoned into court in Florida for breach of contract as they were not following the term and conditions of the contract.
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