November 10, 2013

Burger King v. Rudzewicz - 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) - Supreme Court of the United States

FACTS: MacShara and Rudzeweicz entered into a franchise agreement to run a Burger King in MI.  The Burger King headquarters is located in Miami, FL.  Rudzewicz and MacShara fell behind in their payments to Miami.  The company ordered them to close the franchise and vacate the premises but they refused.

HISTORY:


1) Burger King filed suit in US district Court for the southern District of FL.

2) MacShara and Rudzewicz entered special appearance claiming the court backed personl jurisdiction.

3) 3 day bench trial found again that they had jurisdiction and that they would award $228,875 in damages and close the Burger King.

4) Rudzeweicz appealed to the Circuit Court of Appeals for the 11th Circuit which reversed the judgement saying the District Court didn't have jurisdiction.

ISSUE: Does the exercise of the long-arm jurisdiction offend  "traditional conception of fair play and substantial justice" embodied in the Due Process Clause of the 14th Amendment?

HOLDING: No

RATIONALE:


1) Ruzdzeweicz entered into a carefully structured contract w/ burger King in which the business was governed from FL.

2) A 20-year relationship stipulated in the deal reinforced what is considered a deliberate affiliation with the forum state (FL).

3) Rudzweicz was not at a disadvantage at the bargaining table.

4) Nothing points to this being fundamentally unfair.

DISSENT:
Respondent maintained no place of business in FL, did not prepare any of the food there, and did not expect the food to be purchased by FL consumers.  There is also a fundamental relationship between the franchiser and the franchisee which must be taken into consideration.  The dissent feels the majority relied on a superficial analysis of the business relationship between the two parties b/c the principal office the defendant was to deal with was the MI office.