In Burger King Corp. v. Rudzewiez, Burger King brought a diversity action in Florida
district court against Michigan franchisees Brian MacShara and John Rudzewicz (defendants).
In seeking the franchise, the defendants met with Burger King representatives at the company’s
Michigan district office and corresponded with Burger King’s office in Florida, where
the company is incorporated and headquartered.
Following negotiations with the Burger King offices in Michigan and Florida, Rudzewiez
and MacShara entered into a franchise agreement.
Rudzewicz purchased restaurant equipment from the corporate office in Florida, and MacShara
completed a Burger King management-training course there.
The franchise agreement required that MacShara and Rudzewicz make structured payments to
Burger King over the contract’s 20-year term and contained a Florida choice-of-law
provision.
When the defendants failed to make payment, Burger King brought a breach of contract action
in Florida, asserting that the federal court had diversity and trademark jurisdiction.
The defendants disputed Burger King’s claim that the Florida federal court had personal
jurisdiction over them, maintaining that they did not have enough minimum contacts with
Florida to satisfy due process.
The defendants claimed that, because both men were Michigan residents and the events
giving rise to the claim occurred in Michigan, they could not have reasonably foreseen that
they could be sued in Florida.
Thus, allowing Florida to assert personal jurisdiction would offend traditional notions
of fair play and substantial justice.
The trial court found that jurisdiction was proper under Florida’s long-arm statute
and entered judgment against the defendants, but the decision was overturned by the court
of appeals.
Burger King appealed to the Supreme Court.
Writing for the majority, Justice Brennan held that the defendants had sufficient minimum
contacts with Florida such that the exercise of personal jurisdiction was reasonable.
The Court looked to the purposeful actions toward Florida and found “Rudzewicz established
a substantial and continuing relationship with Burger King’s Miami headquarters,”
including: the defendants’ 20-year affiliation with Burger King; the Florida choice-of-law
provision in the franchise agreement; the defendants’ negotiations with Burger King’s
Florida headquarters; Rudzewicz’s purchase of equipment from Burger King’s Florida
office; and, the defendants’ remittance of payments to Burger King’s Florida address.
The Court found that, under the circumstances, the defendants should reasonably have been
on notice that they could be sued in Florida, and that the exercise of jurisdiction would
not offend notions of fair play and substantial justice.
Justice Stevens dissented, arguing that the finding of personal jurisdiction was based
essentially on the choice-of-law provision in the parties’ contract, which was not
enough to satisfy minimum contacts.
He found this to be fundamentally unfair, given the disparity in bargaining power between
two individual franchisees and such a large corporation.
The Burger King case was an expansion of the Court’s minimum contacts test from International
Shoe and a continuation of the Court’s use of the “fair play and substantial justice”
metric to determine whether the exercise of personal jurisdiction is reasonable.
Burger King also laid the groundwork for Asahi Metal, where the “purposeful act” requirement
was a touchstone for evaluating whether the reasonableness standard was satisfied.
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