The Burger King Case

The Burger King Case leads to a fresh look at the minimum contacts standard. Instead of simply deciding whether minimum contacts are present, the court begins to question whether those contacts are a legitimate basis for jurisdiction. Justice Brennan cites the “notion of fair play and justice” as another facet to personal jurisdiction.

Burger King Corp. v. Rudzewicz (1985)

Facts
Rudzewicz and a business partner opened a Burger King franchise in Michigan. Burger King headquarters were in Florida. The original contract was negotiated with both the Michigan district office and the Florida main office. Rudzewicz never physically entered Florida, but engaged in phone and mail correspondence with the state. After a few months, the franchise started to fail and Rudzewicz began missing payments to Burger King Corp. Burger King insisted the franchise be closed, but Rudzewicz continued to operate. Burger King sued in federal court under Florida jurisdiction, which was allowable under diversity jurisdiction. (We’ll talk diversity jurisdiction later. For now, just pretend Burger King sued in Florida.)

The defense argued that Florida did not have personal jurisdiction. Also, Burger King is a large corporation with offices and legal counsel in Michigan. Rudzewicz is a small business owner in financial trouble. Wouldn’t it be fairer (apparently that’s a real word) to dispute the lawsuit in Michigan?

Questions
1. Were minimum contacts established with Florida?
2. Does Florida’s jurisdiction offend the notion of fair play and justice?

Holding
1. Yes
2. No

Reasoning
1. Rudzewicz purposefully entered into a 20-year, multi-million dollar contract with a Florida-based company.
2. Initially, Rudzewicz mostly dealt with Michigan district office. As business went into the crapper, he began trying to re-negotiate his franchise agreement with FL headquarters. Rudzewicz initiated these negotiations.

And the winner is…
The King

Why would Burger King want to sue in Florida anyway?
It’s how they roll. This case sends a message to other franchises: If you fail to live up to your contract, you’ll have to come fight it out in Florida. We hold a huge financial advantage even before you try to fund an out-of-state lawsuit. Also, we don’t want to give you the benefit of your local jury pool.

summarized from Life of a Law Student