Burger King v. Rudzewicz (1985)

a.       Facts- P is Burger King and D is a franchisee thereof. P is headquartered in FL, while D is headquartered in MI. When D’s business was doing badly, D was unable to continue payments to P. P then filed suit, in FL, against D for various claims. D objected to the idea of FL Cts having Jx over him, because D’s business was in MI, and the Burger King office he dealt with was also in MI.

b.      Procedural History- Trial Ct found for P, Ct of appeals found for P, U.S. Sup Ct reversed and remanded

c.       Issue- Whether a Ct can exercise personal Jx over a non-resident D over a claim arising from a contract that was between a company’s headquarters, assuming D has the means to answer in the foreign Ct AND was given notice that he may have to answer in the foreign Ct, if a suit arises

d.      Holding- Yes, the FL Ct had proper Jx over D’s

                                                              i.      Dissent-

1.      Ds did NO business in FL, nor did they reasonably expect their products to go to FL

2.      Ds primarily dealt with the MI office

3.      The term in the contract was “boilerplate” language and should not be the control in this issue

4.       

e.       Rule- When a business relationship is established by agreement and the executed contract expressly states the forum of choice, the forum State may exercise Jx over the D, unless by doing so would result in grave hardship…thus violating the Due Process Clause

f.       Rationale- The executed contract included a clause that expressly stated the forum of choice (FL) and the body of law to be adhered to.

g.      Notes:

                                                              i.      The term in the contract constituted “purposeful availment” of the benefits and protection of FL law

                                                            ii.      The Ds “reached out” beyond MI for “the manifold benefits that would derive from the affiliation with a nationwide organization”.

                                                          iii.      The “choice of law” provision in the contract was relevant

                                                          iv.      Rudzewicz and McShara were NOT in a legal relationship…only an informal relationship, McShara considered employee

                                                            v.      One purpose of personal Jx is to increase predictability

1.      Companies can predict where they might be subject to Jx

2.      Companies can know where they need to hire attorneys/buy insurance

                                                          vi.      Why would FL have an interest in having Jx over D?

1.      There can be sufficient contacts in more than one State…and a suit can be brought in any one of those States

2.      Because D has purposefully availed itself of the FL laws

                                                        vii.      You have to “reach out” to establish a minimum contacts

                                                      viii.      Minimum also protects from weak and random suits

                                                          ix.      Balancing Test:

1.      Purpose is to determine reasonableness

2.      Considerations for test-

a.       Burden on D

b.      Forum State’s interest

c.       P’s interest in convenient forum

d.      Interest of interstate system in efficiency (the Cts on a whole want to spend the least amount of money)

e.       Shared interest of fundamental social policy

3.      “Adhesion” contract- take it or leave it contract…the terms cannot be changed