Does the exercise of long-arm jurisdiction by a Florida court over an out-of-state defendant in a breach of contract case violate constitutional due process requirements?

Burger King Corp., a Florida-based company, entered into a franchise agreement with John Rudzewicz, a Michigan resident. Rudzewicz and his partner MacShara applied for the franchise through Burger King's Michigan district office. The application process involved negotiations with both the Michigan office and the Miami headquarters. The resulting 20-year franchise agreement specified that it was governed by Florida law and required payments to be sent to Miami.

Subsequently, Rudzewicz and MacShara fell behind on their franchise payments. Attempts to negotiate a resolution were unsuccessful, leading Burger King to terminate the franchise. In response, Burger King filed a lawsuit against Rudzewicz in federal court in Florida, alleging breach of contract and trademark infringement.

Burger King (plaintiff) filed a lawsuit against Rudzewicz in the United States District Court for the Southern District of Florida. Rudzewicz contested personal jurisdiction, but the District Court ruled it had jurisdiction and, after a bench trial, found in favor of Burger King. Rudzewicz then appealed to the Court of Appeals for the Eleventh Circuit. The Eleventh Circuit reversed the lower court's decision, concluding that exercising jurisdiction over Rudzewicz would violate due process. Subsequently, Burger King appealed this ruling to the Supreme Court.

(Brennan, J.)

No. The exercise of long-arm jurisdiction by a Florida court over an out-of-state defendant in this breach of contract case does not violate constitutional due process requirements. Sufficient minimum contacts with the forum state are established when a defendant deliberately reaches out to conduct business in that state, even without physical presence. The franchise agreement had substantial connections to Florida, including choice of law provisions and ongoing communications with the Florida headquarters. These factors demonstrate purposeful availment of the forum's benefits and protections. Modern commercial realities allow for the establishment of meaningful contacts through electronic communications and contractual relationships, without necessitating physical presence. The foreseeability of potential litigation in the forum state is a key consideration in determining whether jurisdiction is reasonable. When a defendant enters into a long-term contractual relationship governed by the forum state's laws, with ongoing obligations to an in-state corporation, litigation in that forum becomes foreseeable and fair. The minimum contacts analysis balances the defendant's deliberate engagement with the forum against considerations of fairness and substantial justice. In cases involving interstate contractual obligations, courts must consider the defendant's purposeful activities directed at the forum state, the economic realities of the business relationship, and the nature of modern commercial interactions that often transcend physical boundaries. This approach ensures that defendants are not unfairly subjected to jurisdiction in forums where they lack meaningful connections, while also recognizing that businesses can establish significant ties to a state through deliberate, ongoing commercial relationships.

Dissent (Stevens, J.) There is a significant element of unfairness in requiring a franchisee to defend a case in the forum chosen by the franchisor. Rudzewicz conducted business exclusively in Michigan and had no physical presence in Florida. This lack of direct connection to the forum state raises serious questions about the appropriateness of exercising jurisdiction. The majority's decision fails to adequately consider the practical realities and potential burdens placed on small business owners operating under franchise agreements. This ruling may have far-reaching implications for future cases involving franchise relationships and personal jurisdiction, potentially tilting the balance of power further in favor of large corporations at the expense of individual franchisees.

No additional opinions found.