*1 CORP. v. RUDZEWICZ KING BURGER May 20, January 8, Argued 1985 Decided No. 83-2097. *2 Beennan, J., opinion delivered the Court, of the BURGER, in which J., Marshall, Blackmun, C. Rehnquist, O’Connor, JJ., joined. Stevens, J., filed a dissenting opinion, White, J., in which joined, p. Powell, J., post, took part no in the consideration or decision of the case. argued
Joel S. Perwin the cause and filed briefs for appellant. argued
Thomas H. Oehmke the cause and filed a brief for appellee. opinion delivered the of the Court.
Justice Brennan long-arm jurisdic- State Florida’s statute extends “[a]ny person, tion to whether or not a citizen or resident of “[b]reach[es] this state,” who, inter alia, a contract this by failing perform required by state acts the contract to performed long this state,” so the cause as of action § alleged 48.193 breach. Fla. contractual Stat. arises from 1984). (1)(g)(Supp. District The United States Court sitting diversity, this relied on Florida, District of Southern Michigan exercising personal jurisdiction provision in over a agreement allegedly a franchise had breached resident who failing required pay corporation by to make a Florida presented question is this whether ments in Florida. The concep long-arm “traditional offended exercise of justice” play tion[s] embodied and substantial of fair Interna Amendment. Process Clause ofthe Fourteenth Due (1945). Washington, tional U. S. Shoe Co. I
A corporation Burger King Corporation is a Florida whose largest principal are in Miami. It is one of the world’s offices organizations, outlets in the 50 3,000 with over restaurant foreign Rico, of Puerto and 8 States, the Commonwealth Burger King approximately 80% of its conducts nations. operation company through that the business a franchise King System” comprehensive styles “Burger restau- —“a operating system uniform and rant and for the sale of format Burger King products.” App. quality 46.1 licenses its food a to use its trademarks and service marks for franchisees period years standardized restaurant facili- of 20 and leases In addition, term. franchisees ties to them for same variety proprietary concerning acquire of information a specifications, procedures op- for and methods “standards, Agreement sys Burger King’s standard Franchise further defines this system, including recognized operating and a tem as “a restaurant format standards, decor, style building, speci of uniform design, color scheme and operation, uniformity products procedures quality and and of fications inventory management offered, procedures for and con and services and App. trol . . . Id., at 52.
erating Burger Restaurant.” King also They receive market research and advertising assistance; ongoing training restaurant management;2 cost- accounting, control, and inventory-control guidance. By fran- permitting chisees to into tap Burger King’s established national reputa- tion and to benefit from proven procedures dispensing standardized fare, this system enables them to go into the res- taurant business with significantly lowered barriers to entry.3
In exchange for these benefits, franchisees pay Burger an initial King $40,000 franchise fee and commit themselves to payment of monthly royalties, advertising sales promo- tion fees, and rent computed from part monthly sales. gross Franchisees also agree submit to the national organization’s exacting regulation of virtually every conceivable aspect their operations.4 Burger King imposes these standards and undertakes its rigid regulation out of conviction that “[u]ni- formity service, appearance, and quality of is product es- sential to the preservation of the Burger King image benefits accruing therefrom to both Franchisee and Franchi- Id., sor.”
Burger oversees its Kang franchise system through a two- tiered administrative structure. contracts governing 2Mandatory training seminars are conducted at University Whopper College Miami and at Regional Training Centers around the id., country. 6 Record 540-541. *4 3 App. generally Brown, See 43-44. See H. Franchising Realities and (2d 1978). 6-7, Remedies 16-17 ed. 4See, g., App. 24-25, e. (range, “quality, 26 appearance, size, taste, and (“standards processing” items), of menu 31 of cleanliness”), service and (hours (“official operation), mandatory operating restaurant stand ards, specifications procedures”), and (building layout, 48-50 displays, equipment, vending machines, service, operation, uniforms, hours of ad vertising, promotion), (employee training), and (accounting 55-56 and (insurance auditing requirements), requirements). Burger King also imposes extensive governing standards liability, assignments, franchisee id., defaults, and termination. See at 61-74. relationship in provide is established Miami franchise that the payment by governed of all and call for law, Florida forwarding required notices to the of all relevant fees policy headquarters headquarters.5 Miami sets The Miami attempting directly in to with its franchisees and works Day-to-day major problems. nn. 7, 9, resolve monitoring infra. through is conducted franchisees, however, report in which turn of 10 district offices a network headquarters. Miami King’s grows Burger litigation termina- out of
The instant aptly by and is described franchisees, its tion of one of part- proceeding among franchisee commercial as “a divorce appellee Rudzewicz, 4. John a Michi- 5 Record ners.” gan partner in a is the senior Detroit resident, citizen and by accounting approached In he Brian Mac- firm. was acquaintance, suggested of a business who Shara, the son they jointly apply in for a franchise to manager proposed as the to serve Detroit area. MacShara put up if the investment of the restaurant Rudzewicz would evenly profits. capital; exchange, share the the two would Believing that idea offered attractive investment MacShara’s opportunities, agreed the ven- and tax-deferral to id., 460. 438-439, 444, ture. jointly applied a franchise
Rudzewicz MacShara King’s Birmingham, Michigan, Burger district office Burger application Their autumn of 1978. was forwarded headquarters, preliminary King’s which entered into a Miami ensuing February During agreement them 1979. agreed MacShara that Rudzewicz and four months it was Drayton facility operation existing of an would assume prescibed man- Michigan. MacShara attended the Plains, agement supra, during period, 2, n. in Miami this see courses restaurant purchased $165,000 and the worth franchisees King’s division equipment Burger from Davmor Industries id., infra, 10-11, 37, 72-73, 113. See 5 See *5 agreements signed, Miami. Even before the final were how- parties began disagree site-development ever, to over fees, building design, computation monthly rent, and whether the assign franchisees would be able to their liabilities to a cor- poration they During disputes had formed.6 these Rudze- negotiated Birmingham wicz and MacShara both with the dis- headquarters.7 trict office and with the Miami With some misgivings, finally Rudzewicz and MacShara obtained limited headquarters,8 signed concessions from the Miami the final agreements, operations By and commenced in June 1979. signing agreements, obligated the final himself personally payments exceeding 20-year to million over the $1 relationship. franchise 6 The latter major two matters were the disagreement. areas of Not
withstanding Burger King’s offering franchise advised that minimum rent would be based on a percentage “approximated capitalized site acquisition costs,” id., construction Rudzewicz assumed that would solely costs, function of renovation thereby rent and he under estimated the monthly by minimum $2,000. rent more than The District Court found Rudzewicz’ interpretation “incredible.” 7 Record 649. respect With assignment, Rudzewicz and MacShara had formed RMBK Corp. with assigning the intent of to it all of their interest and liabilities in the franchise. Consistent with documents, the contract how- ever, Burger King insisted personally that the two remain liable for their obligations. franchise App. 62, See Although 109. the franchisees con- tended that given officials had them oral assurances concern- ing assignment, the District pursuant Court found that parol evi- any dence rule such they assurances “even if had been made and were misleading joined were merged” agreement. into the final 7 Record 648. 7Although Rudzewicz and MacShara dealt with Birmingham district regular basis, office on a they directly communicated head with the Miami quarters in forming contracts; moreover, they learned that the district office “very had decisionmaking little” authority accordingly turned directly to headquarters in seeking id., 292. disputes. resolve their generally App. 5-6; 198-199, 167-168, 182-184, 5 Record 174-179, 217-218, 264-265, 292-294; id., 416, 463, 314-316, 363, 373, 8They were $10,439 able to year. secure a for the third reduction rent App. 222-223; 5 Record id., *6 468 busi- enjoyed steady Plains facility apparently
The Drayton after but declined patronage the summer during ness and MacShara later that Rudzewicz began year. a recession to Miami. monthly payments far behind their soon fell and an extended default, period sent notices of Headquarters the franchisees, Birmingham among of negotiations began After several the Miami office, headquarters. and district but engaged officials Miami had prolonged Burger King by with the franchisees negotiations unsuccessful ultimately fran- terminated the mail and by telephone,9 headquarters to vacate the ordered and MacShara chise and and occupy operate refused and continued to Théy premises. restaurant. Burger King as a facility B action in the commenced the instant United King
Burger of Florida in for the Southern District District Court States court’s diversity jurisdiction pursu- that 1981, invoking May 1332(a) its over original jurisdiction § 28 C. ant to U. S. 1338(a).10 §to Burger trademark disputes pursuant federal Rudzewicz and MacShara had breached King alleged this dis- jurisdiction of] franchise “within obligations [the their to make the “at failing required payments trict court” by in Miami, County, Florida,” Dade business plaintiff’s place in- were charged they tortiously ¶ and also App. 9 directly” they began franchisees when policy was to “deal Miami’s difficulties, personnel office and to involve district to encounter financial id., case, example, necessary. In the instant only at when measures, problems, cost-cutting ordered all credit Miami office handled franchisees’debts, refinancing partial of the communicated negotiated for a attempting dispute, resolve and was directly with the franchisees id., 59-69; id., 84-89, See 2 all termination matters. responsible for id., 158, 163; 116-128, 151-152, 395-397, 97-98, 100-103, 94-95, 436-438, 510-511, 524-525. Michigan with summonses were served Rudzewicz and MacShara Rule pursuant to Federal of Civil Procedure 4. copies complaint of the id., at 102-103.
fringing through their its trademarks and service marks operation continued, unauthorized as a restau- ¶¶ Burger damages, App. King sought 130-135. rant, 35-53, injunctive attorney’s relief, and costs and fees. Rudzewicz special appearances argued, inter and MacShara entered they Michigan alia, that because were residents and because Burger King’s not claim did “arise” within the Southern Dis- personal jurisdic- trict of the District Florida, Court lacked tion over them. The District Court denied their motions *7 holding hearing, pursuant long-arm after a that, to Florida’s Burger King subject “a non-resident statute, franchisee is to personal jurisdiction arising the of this Court actions out agreements.” Id., of its franchise at 138. Rudzewicz and seeking then an MacShara damages filed answer and a counterclaim alleged by Burger King Michigan’s for violations of §445.1501 Comp. Franchise Investment Law, Mich. Laws (1979). seq. et 3-day again trial,
After bench the court concluded that “jurisdiction subject parties it had over the matter and the to App. Finding this cause.” that Rudzewicz and Mac- agreements Burger Shara had their breached franchise King infringed Burger King’s and had trademarks and serv- judgment against jointly marks, ice the court them, entered severally, damages. and for $228,875 contract The court immediately also ordered them “to close Res- operation taurant 775 from Number continued or im- to mediately give keys possession the of said restaurant Burger King Corporation,” they to id., at 163, found that prove any required had failed to of the elements of their attorney’s counterclaim, Burger King. awarded costs and fees to appealed Appeals to the Court of the Elev- panel enth Circuit.11 A divided of that Circuit reversed the appeal judgment. did not Burger 11 MacShara his King Corp. (CA11 MacShara, 1984). P. 2d n. In addition, Rudze- compromise into a with Burger King entered wicz right waived his to judgment, concluding prop that the Court could District not erly personal pursuant exercise over Rudzewicz 1984) §48.193(1)(g)(Supp. Fla. because “the circum Stat. Drayton negotiations Plains and the stances of the franchise which led to it left Rudzewicz bereft of reasonable notice and financially unprepared prospect litigation
for the of franchise King Burger Corp. MacShara, in Florida.” 724 F. 2d (1984). Accordingly, panel majority the con “[j that under cluded these circumstances would Jurisdiction fairness is the offend fundamental which touchstone process.” Ibid. due
Burger King appealed
judgment
the Eleventh Circuit’s
pursuant
1254(2),
§
post
Court
to 28
this
U. S. C.
and we
(1984).
probable
poned
jurisdiction.
471 certiorari, see 28 a for a writ of statement as petition reverse. the and now §2103, petition S. C. we grant
< s liberty an individual protects The Due Process Clause of a binding judgments interest in not being subject appeal through expedient of litigants if could obtain an threatened might law particular construction of state law where state stipulating to a harmony Jurisdiction under in fact with the Federal Constitution. 1254(2) only appeals a court of properly § is invoked where 28 U. S. C. face or squarely has “held” that a state statute is unconstitutional on its as might grounds. rest on other jurisdiction does not he if the decision applied; (1931) Co., Telephone 6, v. Batesville Public Service Comm’n S. curiam). (per practice “our of strict construction” of Consistent with (1970) (per Ridge Tool 41, 42, n. 1 Fomaris v. §1254(2), 400 U. S. curiam), appeals’ lie a court of appeal that an cannot where we believe Rather, solely stipulated applicability of state law. judgment rests on the independently concluded that the reasonably that the court it must be clear and held the statute itself unconstitu- governs the case challenged statute case, Appeals did neither this con- applied. The Court tional as so “[jjurisdiction under these circumstances would offend cluding simply that process.” touchstone of due which is the the fundamental fairness 2d, F. §48.193(1)(g) governed Florida law that course, if clear under Of it were terms, objec there falling its literal could be no
every transaction within recognized this merely established construction. stipulation to a tion §48.193 not ruled on the Supreme Court has breadth But Florida provision appellate courts have held that (1)(g), and several state g., e. Scordilis See, Process only limits of the Due Clause. extends (Fla. Pipe Drobnicki, Lakewood 1984); App. 412-414 2d v. So. (Fla. dism’d, 1979), Texas, Rubaii, appeal Inc. App. 2d 379 So. Inc., Society, (Fla. 2d University Osborn 1980); So. 2d 1201 383 So. (Fla. 1979). applied §48.193(1)(g) If is construed and App. law, an then as a matter of state process with due limitations accordance *9 to repugnant cannot be “invalid as appeal improper is the statute because 1254(2), § since its States,” 28 U. S. C. the Constitution ... of United of, Due being in Process by, are defined rather than excess boundaries n. Kulko 787-788, g., Jones, supra, e. Calder v. See, v. Clause. (1978). Court, 84, 90, 4 and n. Superior 436 U. S. California 472 he has “contacts,
forum with which established no meaningful International Shoe Co. v. Washington, ties, or relations.” 326 at 319.13 that “fair By requiring U. individuals have activity may subject that a to the warning particular [them] v. Heitner, sovereign,” of a 433 jurisdiction foreign Shaffer (1977) J., 218 186, concurring judgment), S. (Stevens, the Due Process Clause of to “gives degree predictability that allows defendants to structure legal system potential their conduct with some minimum assurance as to primary and will not where conduct wall render them liable to Volkswagen Corp. Woodson, World-Wide 444 suit,” U. S. (1980). 286, 297 to assert specific a forum seeks jurisdiction
Where over an who has not out-of-state defendant consented suit there,14 is if this “fair satisfied the defendant warning” requirement directed” his activities at residents of the has “purposefully Keeton v. Hustler Inc., 465 Magazine, forum, 770, U. S. 774 and the results from (1984), litigation alleged injuries “arise out of or relate to” those activities, Helicopteros Colombia, Nacionales de S.A. Hall, 414 U. S. 13 Although protection operates this power, to restrict state it “must be ultimately a function of the liberty preserved seen as individual by interest rather than as a the Due Process Clause” function “of federalism concerns.” Corp. Compagnie Ireland v. des Bauxites Guinee, Insurance de of (1982). 702-703, n. 10 U. S. that, jurisdiction personal noted because the requirement We have is arrangements” right, “variety legal by a waivable there are a which a litigant give “express implied personal or consent Corp. Compagnie court.” Insurance Ireland v. des Bauxites Guinee, supra, at For example, particularly de in the commercial context, parties frequently stipulate in advance submit their contro particular resolution within a jurisdiction. versies for National Rental, Szukhent, (1964). Ltd. v. such Equipment S. “Where provisions have through “freely negotiated” forum-selection been obtained not agreements Zapata are unjust,” “unreasonable and Bremen v. (1972), U. S. does not offend their enforcement Off-Shore due process.
473
(1984).15
“[t]he
powers
Thus
forum
does not
State
exceed its
personal juris
if
under the Due Process Clause
it asserts
corporation
products
diction over a
that delivers its
into
expectation
they
the stream of commerce
with
will
by
purchased
consumers
the forum State” and those
products subsequently injure forum consumers. World-Wide
Volkswagen Corp.
supra,
v. Woodson,
at 297-298. Simi
larly,
publisher
magazines
a
in a
who distributes
distant
may fairly
State
be held accountable
that forum for dam
ages resulting
allegedly defamatory story.
there from an
Magazine,
supra;
Keeton v. Hustler
Inc.,
see also Calder v.
(1984)(suit
editor).
against
Jones,
U. S. 783
author and
respect
obligations,
And with
to interstate contractual
we
emphasized
parties
beyond
have
who “reach out
one
continuing relationships
obligations
state and create
subject
regulation
another state”
citizens of
are
and sanc
consequences
tions
the other State for the
of their ac
Virginia,
Travelers Health
643,
tivities.
Assn. v.
U. S.
(1950).
also
v. International
Insurance
See McGee
Life
(1957).
Co.,
355 U. S.
222-223
why
legitimately
We have noted several reasons
a forum
may
personal jurisdiction
exercise
over a nonresident who
“purposefully
his activities
forum residents.
directs”
toward
generally
providing
A
has a “manifest interest”
State
redressing injur-
its residents with a convenient forum for
by out-of-state actors.
see
Id.,
223;
ies inflicted
also
Magazine,
supra,
Inc.,
Moreover,
Keeton v. Hustler
“purposefully derive benefit” from
where individuals
their
Superior
interstate
Kulko v.
activities,
Court,
California
“general” jurisdiction, pursuant
15 “Specific”jurisdiction contrasts with
personal jurisdiction over a defendant
in a suit
to which “a State exercises
arising out of or related to the defendant’s contacts with the forum.”
not
Colombia,
Hall,
Helicopteros Nacionales de
S.A. Benguet
Mining
see also Perkins Consolidated
Notwithstanding these the constitutional considerations, purposefully es- touchstone remains whether the defendant forum Interna- “minimum contacts” State. tablished Washington, supra, Although at 316. tional Shoe Co. v. argued foreseeability causing injury in it has been of to establish such con- another State should be sufficient policy require,16the tacts there when considerations so Court foreseeability consistently of is not a has held that this kind exercising personal jurisdiction. “sufficient benchmark” Volkswagen Corp. 444 Woodson, S., World-Wide v. U. foreseeability proc- Instead, “the that is critical to due analysis ... is that the defendant’s conduct and connec- ess reasonably the forum State are such that he should tion with anticipate being In haled into court there.” de- Id., potential fining it is that a defendant should “reason- when litigation, frequently ably anticipate” out-of-state the Court reasoning Denckla, from the of Hanson v. 357 has drawn (1958): 253 U. S. activity
“The unilateral of those who claim some rela- satisfy tionship defendant cannot with a nonresident appli- requirement contact with the forum State. The of Volkswagen Corp. Woodson, g., e. World-Wide See, v. U. S. Heitner, (1980) J., (Brennan, dissenting); v. 433 U. S. Shaffer (1977) (Brennan, J., concurring part dissenting part). cation that rule vary will with the and nature quality of the but defendant’s it is activity, essential each case be some there act which the by defendant purpose- itself of fully avails privilege activities conducting within forum thus State, the benefits invoking of its protections laws.”
This availment” “purposeful requirement ensures that a defendant not be will haled into a jurisdiction as a solely “random,” result of “fortuitous,” or “attenuated” contacts, Keeton v. Hustler Magazine, Inc., World- Wide Volkswagen Woodson, Corp. supra, 299, or of the “unilateral activity another or a third party person,” Colombia, Nacionales de Helicopteros Hall, S.A. supra, at 417.17 Jurisdiction is however, where the con proper, him tacts result proximately from actions by the defendant *12 a that create “substantial connection” the forum with self McGee International State. v. Co., Insurance supra, Life Kulko v. at Court, 223; see also Superior supra, California at n. Thus 94, 7.18 where the has “deliberately” defendant
17Applying
principle,
this
the
has held
Clause
Court
that the Due Process
personal
forbids the
jurisdiction
exercise
over
automobile
an out-of-state
only
distributor whose
tie to the
decision
forum resulted from a customer’s
to drive there,
Volkswagen
Woodson, supra; over
Corp.
World-Wide
v.
a
only
divorced
child-support payments
sued for
affiliation
husband
whose
there,
with the
by
spouse’s
forum
created
was
his former
to settle
decision
Court,
Kulko v.
Superior
(1978); and over
436 U.
a
S. 84
California
only
trustee whose
connection
the forum
settlor’s
with
resulted from
decision to
power
Denckla,
exercise her
v.
appointment there,
Hanson
(1958).
instances,
Jurisdiction these circumstances not merely physically defendant did not enter the because the Although presence frequently forum territorial will State. potential defendant’s affiliation with a enhance a State foreseeability of suit it is an there, reinforce the reasonable inescapable fact of commercial life that a modern substantial solely by amount of business is transacted mail and wire obviating thus lines, communications across state the need physical presence a State which business is within long are conducted. So “purposefully as a commercial actor’s efforts State, directed” toward residents of another consistently rejected the we have notion that an absence physical personal jurisdiction contacts can defeat there. Magazine, supra, Inc., 774-775; Keeton v. Hustler see Jones, S., 788-790; also Calder U. McGee 222-223. International Insurance Life Hoopeston Canning Cullen, Cf. Co. v. 318 U. S. (1943). purposefully
Once it has been decided that defendant *13 these State, established minimum contacts within the forum may light in of to deter- contacts be considered other factors personal jurisdiction would mine whether the assertion of comport play justice.” Interna- and with “fair substantial Washington, tional v. 326 at Thus S., Shoe Co. U. Volkswagen Woodson, Corp. Wide 299. This v. at distinction category that, acts, of respect derives from the belief to this “isolated” id., foreseeability litigation in the of the forum is reasonable sub- stantially diminished. in
courts “appropriate evaluate “the burden may case[s]” on the defendant,” “the forum State’s interest in adjudicating the “the dispute,” plaintiff’s interest convenient obtaining relief,” effective “the interstate judicial system’s interest the most efficient obtaining resolution of controversies,” and the of “shared interest the several States furthering ” Volks World-Wide fundamental substantive social policies. wagen Corp. v. Woodson, S., at 292. These consid erations sometimes serve to the establish reasonableness of jurisdiction upon a lesser of minimum contacts showing than g., e. Keeton v. Hustler would otherwise be See, required. Magazine, supra, supra, Inc., at 780; Calder v. Jones, supra, 788-789; McGee v. International Insurance Co., Life at 223-224. On the other hand, where a who defendant pur has posefully directed his activities forum residents seeks jurisdiction, to defeat he must present a compelling case of presence some other considerations would render jurisdiction unreasonable. Most such considerations may be accommodated usually means of through short finding jurisdiction unconstitutional. For example, potential clash of the forum’s law with the “fundamental substan tive policies” social of another State may accommodated of the through application forum’s choice-of-law rules.19 Sim ilarly, a defendant claiming substantial inconvenience may seek a of change Nevertheless, venue.20 minimum require ments inherent in the of “fair concept and substan- play Hague, See Allstate Insurance Co. (1981) 449 U. S. 307-313 J.). (Second) (opinion generally See Restatement of Conflict BRENNAN, (1971). 6,§§ Laws 1404(a) (“For g., e. See, § parties U. S. C. the convenience of witnesses, justice, in the may any interest of a district court transfer civil any might action to other brought”). district or division where it have been provision This expanded embodies in an version common-law doctrine conveniens, non appropriate under which a court circum forum stances decline to exercise its “easy, of the interest expeditious inexpensive” resolution controversy of a in another forum. Gilbert, Corp. Oil (1947). 330 U. S. 508-509 Gulf *14 jurisdiction may justice” the reasonableness defeat tial engaged purposefully in forum ac- has if the defendant even supra, Corp. Volkswagen Woodson, v. tivities. World-Wide (Second) of Laws of Conflict Restatement see also (1971). jurisdictional previously §§ noted, have As we 36-37 litigation way employed to make in such a as not be rules unfairly party is gravely and inconvenient” difficult “so opponent. disadvantage” comparison to his at a “severe (1972) Zapata 181, 407 U. S. Co., v. The Bremen Off-Shore (re provisions); International v. McGee forum-selection Life supra, at 223-224. Co., Insurance
B (1) principles Applying we believe hand, to the case these supporting District record evidence is substantial there personal the assertion of conclusion that Court’s alleged of his fran- for the breach Rudzewicz Florida over process. agreement outset, At the did not offend due chise respecting among courts lower a continued division we note a “con- a contract can constitute extent and to what whether analysis.21 question process purposes If the of due tact” for party an out-of-state contract with an individual’s is whether automatically minimum con- establish sufficient can alone party’s the answer forum, home we believe in the other tacts rejected long ago clearly The Court that it cannot. is jurisdiction might personal “mechanical” turn on notion that Washington, supra, tests, International Shoe Co. place “conceptualistic of contract- . . . theories of or on Canning Hoopeston ing performance,” Cullen, Co. v. or of Bridge Construc g., Lakeside & Steel Co. Mountain State e. See, (1980) dissenting (White, J., from denial tion 907, 909-910 445 U. S. certiorari) Single cases); Brewer, Contract (collecting Jurisdiction (1983); Note, 7-11, Long-Arm Cases, 6 U. Ark. Little Rock L. J. Contact?, Litigation: is a Contract a Commercial When Jurisdiction (1981). L. Rev. 384-388 B. U. *15 emphasized 318U. at 316. S., Instead, we have the need for “highly approach recognizes a realistic” that a “contract” “ordinarily step serving prior up is but an intermediate to tie negotiations consequences business with future which them- object selves are the real of the business transaction.” Id., prior negotiations at 316-317. It is these and con- factors— templated consequences, along future with the terms of the parties’ dealing contract the and actual course of must —that determining purpose- be in evaluated whether the defendant fully established minimum contacts within the forum. physical
In this no ties case, to Florida can be attributed training to Rudzewicz other than MacShara’s brief in course Miami.22 Rudzewicz did not maintain officesin and, Florida appears for all that from the has never record, even visited dispute grew directly there. Yet this franchise out of “a contract which had substantial connection with that State.” v. McGee International Insurance S.,U. at Life added). (emphasis Eschewing option operating the independent enterprise, deliberately an local beyond” “reach[ed] Michigan negotiated out and with a Flor- corporation purchase long-term ida for the of a franchise and presence 22 TheEleventh Circuit held that MacShara’s in Florida was question irrelevant to the of Rudzewicz’ minimum contacts with that forum, reasoning that “Rudzewicz and partner MacShara never formed a ship” “signed agreements in capacities.” their individual 724 F. 2d, jointly corporation n. 14. The two did form a through which they seeking franchise, were 6, supra. to conduct the however. n. They required were to decide which one them would travel to Florida to satisfy training requirements they business, so that could commence participated and Rudzewicz in go the decision that MacShara would there. previously We have noted that when commercial activities are “carried on party behalf of” an out-of-state those activities sometimes be as cribed party, Washington, to the International Shoe Co. v. 326 U. S. (1945), “primary participant]” enterprise at least where he is a in the and has purposefully directing activities, Jones, acted those Calder S., 790. Because MacShara’s matriculation at University pivotal is not case, disposition to the of this we need not resolve permissible bounds of such attribution. derive from affiliation with benefits that would the manifold organization. Assn. v. Travelers Health Vir- a nationwide Upon approval, ginia, he entered into S., U. relationship carefully 20-year that envisioned structured a continuing King wide-reaching Burger contacts with voluntary acceptance light of the In of Rudzewicz’ Florida. exacting regulation long-term Bur- of his business from headquarters, “quality ger King’s and nature” of Miami company relationship Florida can no sense his Hanson “fortuitous,” or “attenuated.” “random,” viewed as Magazine, Hustler Keeton v. Denckla, *16 Volkswagen Corp. v. Inc., S., 465 U. World-Wide to make the at 299. Rudzewicz’refusal Woodson, contractually required payments in Miami, and his continued Burger King’s in- trademarks and confidential business use injuries termination, after his caused foreseeable formation corporation was, For reasons it Florida. these very presumptively reasonable for Rudzewicz to be least, the injuries. there for such called to account light Appeals concluded, however, that The Court of emanating Burger King’s supervision from district office the reasonably Birmingham, that “the believed purposes Michigan for all intents and the embodi- officewas Burger King” and that he therefore had no ment of “reason to King Michigan.” anticipate Burger suit outside of 724 F. post, at 488-489 dissent- 2d, J., See also (Stevens, ing). reasoning This overlooks substantial record evidence indicating certainly most that he was that Rudzewicz knew affiliating enterprise primarily based in Flor- himself with an emphasize that Bur- ida. contract documents themselves King’s operations supervised ger the are conducted and from payments headquarters, Miami that all relevant notices and agreements made must be and that the were there, sent supra. Moreover, n. the and enforced from Miami. See parties’ dealing repeatedly actual confirmed that course of headquar- decisionmaking authority in Miami was vested largely ters and that the district office served as an inter headquarters mediate link between and the franchisees. problems building design, site-development When arose over computation, payments, and the fees, rent defaulted Rudze Michigan pow learned that wicz and MacShara officewas disputes only erless to resolve their and could channel their Throughout disputes, communications to Miami. these headquarters Michigan Miami and the franchisees carried on by by a continuous course of direct communications mail and telephone, headquarters it and was the Miami that made the key negotiating litigation decisions out of which the instant supra. nn. 7, 9, arose. See Appeals gave we believe the Court of
Moreover, insuffi- weight provisions in cient the various franchise documents providing disputes governed by that all would be Florida law. example, agreement, The franchise stated: Agreement “This shall become valid when executed and by accepted Miami, BKC at it shall be deemed Florida; made and entered into in the State of Florida and shall governed and construed under and accordance with the laws of the State of Florida. The choice of law des- ignation require concerning does not that all suits this *17 Agreement App. be filed Florida.” 72. supra. Appeals n. The
See also Court of reasoned that provisions question choice-of-law are of irrelevant to the jurisdiction, relying personal on Hanson v. Denckla for proposition gravity pur- that “the center of for choice-of-law necessarily poses sovereign prerogative not does confer the jurisdiction.” citing to assert 724 F. at n. 2d, 1511-1512, import reasoning misperceives 254. S., at This 357 U. proposition. quoted of the in Hanson sub- Court emphasized analysis— sequent has cases that choice-of-law simply on all and not transaction, which focuses elements of a from on the defendant’s conduct—is distinct minimum- jurisdictional analysis contacts focuses at the thresh- —which solely purposeful old on the defendant’s connection Nothing suggests cases, in our a however, forum.23 ignored considering provision choice-of-law should be “purposefully whether a defendant has invoked the benefits protections jurisdictional purposes. of a laws” for State’s Although standing provision alone would such be insuffi- jurisdiction, that, cient to confer we believe when combined 20-year interdependent relationship es- with the Rudzewicz Burger King’s headquarters, Miami it rein- tablished with forced his affiliation with the forum deliberate State and foreseeability possible litigation there. reasonable As Judge argued “pur- in his dissent below, Johnson posefully protections availed himself of the benefits and by entering expressly provid- Florida’s into contracts laws” ing govern disputes. that those laws would franchise F. at 1513.24 2d,
(2) pointed Nor has Rudzewicz to other factors that can be persuasively outweigh the said considerations discussed unconstitutionality above and to establish the of Florida’s jurisdiction. assertion of cannot We conclude that Florida “legitimate holding [Rudzewicz] had no interest answer- Denckla, Hanson v. S., at 253-254. See also Keeton v. Hustler 357 U. Inc., Magazine, Superior Court, Kulko S., 778; U. California Heitner, S., Shaffer 24 addition, agreement’s In the franchise disclaimer that the “choice of require designation concerning Agreement law does not that all suits this Florida,” App. (emphasis added), reasonably filed in be should have suggested by negative implication such suits could to Rudzewicz that filed there. provided binding The lease also arbitration in Miami of certain con- id., disputes, validity
demnation
and Rudzewicz conceded the
provision
argument,
Arg.
Although
this
at oral
Tr. of Oral
it does not
govern
dispute,
provision
appar-
the instant
this
also should have made it
they
dealing directly
ent to the
franchisees
were
with the Miami head-
*18
district office was not “for all intents
quarters
Birmingham
and that
purposes
Burger King.”
2d,
embodiment
724 F.
able on a claim related to” the contacts
in
he had established
Magazine,
that State. Keeton v.
Inc.,
Hustler
S.,U.
at
776; see also McGeev. International
Insurance Co., 355
Life
(noting
frequently
U. S., at 223
that State
will have a “mani-
providing
fest interest in
effective means of redress for its
residents”).25
although
argued
Moreover,
has
Rudzewicz
at
length
Michigan’s
some
Franchise Investment Law,
§445.1501
Comp.
seq. (1979), governs many
Mich.
Laws
et
aspects
relationship,
of this franchise
he has not demon-
Michigan’sacknowledged
might possibly
strated how
interest
jurisdiction
Finally,
render
in Florida unconstitutional.26
Appeals’
litigation
the Court of
assertion that the Florida
“severely impaired
ability
[Rudzewicz’]
Michigan
call
n witnesseswho
might
be
essential
his
defense
counter-
wholly
support
claim,”
2d,
1512-1513,
724 F.
is
without
And
record.27
even to the extent
is
that it
inconvenient
25Complaining
King
you
that “when Burger
plaintiff,
is the
won’t ‘have it
your way’
it
Miami,”
because
sues all
Appellee 19,
franchisees
Brief
Rudzewicz contends that
interest in providing
Florida’s
a convenient forum
negligible given
is
the company’s
ability
litigation
any
size
to conduct
country.
where in the
disagree.
compelling considerations,
We
Absent
cf.
S.,
223,
McGee v. International
Insurance
a
U.
defend
Life
purposefully
ant who has
derived commercial benefit from his affiliations in
may
jurisdiction
a
simply
forum
not defeat
adversary’s
there
because of his
greater net wealth.
26Rudzewicz has failed to
how
show
the District Court’s exercise of
jurisdiction
might
in this case
have
at all
Michigan’s
been
inconsistent with
contrary,
fully
interests. To the
the court found that
had
complied
Michigan law,
nothing
App.
Michigan’s
and there
is
suggesting
Michigan
franchise Act
attempt
would
to assert exclusive
jurisdiction
disputes affecting
any
to resolve franchise
its residents.
In
event,
analysis presupposes
minimum-contacts
or
that two more States
dispute,
process
in the
be interested
outcome of
and the
of resolv
ing potentially conflicting
policies,”
“fundamental substantive social
World
Woodson,
Volkswagen Cory.
Wide
usually
can
through
through
rules
outright
accommodated
choice-of-law
rather than
preclusion
supra.
See n.
one forum.
only arguable
trial
instance of
inconvenience occurred when
difficulty
authenticating
corporate records;
some
had
*19
party
has minimum contacts with a forum to liti-
for a
who
gate
frequently can
ac-
there, such considerations most
be
through
change
supra.
n. 20,
of venue. See
commodated
suggested
Although
that inconvenience
the Court has
point become so substantial as to achieve consti-
at some
magnitude,
v. International
Insurance
tutional
McGee
Life
supra,
this is not such a case.
Co.,
Appeals
concluded, however,
Court of
also
that
dealings
disparity
parties’
involved “a characteristic
bargaining power”
surprise,”
and “elements of
and that Rud-
potential
litigation in
zewicz “lacked fair notice” of the
provisions suggesting
Florida because the contractual
contrary
merely “boilerplate
lengthy
declarations in a
were
printed
F.
2d,
1511-1512,
contract.” 724
and n. 10. See
post,
dissenting).
also
489-490 (Stevens,
J.,
presented many
arguments
Court,
of these
to the District
contending
Burger King
guilty misrepresenta-
that
was
gave
tion, fraud,
duress;
that it
insufficient notice in its
dealings with
and that the contract was one
him;
of adhesion.
3-day
See Record 687-691. After a
bench
trial,
misrep-
Burger King
District Court found that
had made no
resentations, that
are
Rudzewicz and MacShara “were and
experienced
sophisticated
“at
that
businessmen,” and
they “ac[t]
no time” did
disad-
under economic duress or
imposed by”
vantage
Burger King. App.
also
157-158. See
52(a)
7 Record 648-649. Federal Rule of Civil Procedure
“[findings
requires aside
of fact
set
shall not be
clearly
nor the
erroneous,”
unless
and neither Rudzewicz
pointed
Appeals has
would
Court of
record evidence
support
Dis-
and firm
a “definite
conviction” that
findings
trict
v. United
Court’s
are mistaken. United States
(1948).
Gypsum
See also
States
S.
requi-
court offered him
secure
necessary
as much time as would
office,
Burger King
Birmingham
site authentication from the
district
ultimately stipulated
delay the trial.
authenticity
to their
rather than
574-575, 578-579, 582,
Record
598-599.
(1985).
City,
Anderson v. Bessemer
Ill Notwithstanding Ap- these considerations, the Court of peals apparently necessary reject believed that it was jurisdiction prophylactic reasoning this case as a measure, that an judgment affirmance of the District Court’s would jurisdiction result in the exercise of over “out-of-state con- payments sumers to personal pur- collect due on modest chases” and against judgments would “sow the seeds of default owing
franchisees smaller debts.” 724 F. 2d, Appeals’ 1511. We share the Court of broader concerns reject any jurisdictional therefore talismanic “the formulas; suggest We do not jurisdictional mean to that the always outcome will be the same franchise eases. Some may primarily franchises intra be state character or involve different decisionmaking structures, such that a franchisee reasonably should not anticipate litigation. out-of-state Moreover, argued commentators have relationships may that franchise practices sometimes involve unfair opera business inception their (2d Brown, tion. H. Franchising Realities 4-5 and Remedies ed. 1978). reasons, For reject these we Burger King’s suggestion gen for “a rule, eral or presumption, at least a participation in an interstate fran relationship” represents chise consent of the franchisor’s principal place of Appellant business. Brief for 46. [always] weighed” be in determin facts of each case must ing personal jurisdiction comport “fair whether would justice.” play Superior Kulko v. and substantial California “quality S., at 92.29 The and nature” of an Court, U. “random,” interstate transaction sometimes be so “for fairly that it tuitous,” or “attenuated”30 cannot be said that potential reasonably anticipate being defendant “should jurisdiction. haled into court” another World-WideVolks wagen Corp. Woodson, S., 18, see also n. emphasized jurisdiction may supra. We also have not grounded be on contract whose terms have been obtained through overweening bargaining “fraud, influence, undue or power” application litigation and whose would render “so gravely party] [a difficult and inconvenient that will for practical purposes deprived day all of his in court.” Zapata The Bremen v. Off-Shore (1972); Shevin, Cf. Fuentes v. 407 U. S. 94-96 National Equipment Rental, Ltd. v. Szukhent, U. S.
(1964) (Black, dissenting) (jurisdictional J., rules not employed against “crippl[e] be small consumers so as to their defense”). flexibility as the Due Just Process Clause allows ensuring effectively “judg in that commercial actors are not proof” consequences obligations they ment for the volun tarily in States, assume other McGee v. International Life prevent Insurance 355 S., so too does it rules unfairly judgments that would enable them to obtain default against unwitting Rumely, customers. Cf. United States v. (1953)(courts U. S. must not be “‘blind’” to what “ ”). ‘[a]llothers can see and understand’ course, approach does, preclude jurisdictional This clear-cut rules. any play inquiry justice” necessarily But into “fair and requires substantial “in determinations which few answers will written ‘in be black and white. greys among The are dominant and even them the shades are innumera Superior Court, ble.’” Kulko v. S., 436 U. at 92. California Denckla, Magazine, Hanson Keeton v. Hustler S., 253; 357 U. Inc., Volkswagen Woodson, Corp. World-Wide S.,U. dangers these above, however,
For the reasons set forth present in case. Because are not the instant relationship continuing established a substantial Burger King’s headquarters, fair notice from received Miami dealing that he and the course of the contract documents subject might to demon Florida, and has failed be to suit fun in that forum would otherwise be strate how damentally ex that the District Court’s unfair, we conclude §48.193(1)(g) jurisdiction pursuant to Fla. Stat. ercise of 1984) process. judgment (Supp. did not offend due Appeals accordingly and the case reversed, is the Court of proceedings with this for further consistent is remanded opinion.
It is so ordered. part in the consideration or took no Powell Justice case. decision of this joins, Justice White Stevens, with whom
Justice dissenting. my opinion significant a element of unfairness
In there is requiring of this kind franchisee to defend a case undisputed appel- by It is the franchisor. forum chosen place that he had no Florida, of business lee maintained no employees to do that he was not licensed State, in that prepare Appellee French fries, did not his there. business Michigan, hamburgers deliver them and then shakes, expectation they commerce “with the into the stream of by purchased [would] Ante, at in” Florida. consumers only contrary, appellee in Michi- did business *22 473. To payroll payable property, gan, and taxes were business, his products there. he sold all of his State, principal relationship, appellee’s Throughout the business Michigan appellant office. Not- its with were with contacts withstanding ante, Court seems its disclaimer, rely nothing ultimately than on more standard boiler- plate language ante, documents, contained various “ appellee ‘purposefully to establish that availed himself of the protections of Ante, benefits and Florida’s laws.’” analysis superficial potential Such creates a for unfairness not only negotiations between franchisors and their franchi- significantly, disputes but, sees more in the resolution of the inevitably relationships. arise from time to time such Judge opinion Appeals Vance’s for the Court of for the adequately explains why Eleventh Circuit I would affirm the judgment particularly following I of that court. find the persuasive today: more than what this Court has written
“Nothing negotiations gave in the course of anticipate Burger King reason suit outside of Michi- gan. only face-to-face or even oral contact Rudze- Burger King throughout pro- wicz had with months of negotiations representatives tracted was with of the Michigan Burger King Michigan office. had the office appraise ap- interview Rudzewicz and MacShara, their plication, price discuss terms, recommend the site which finally agreed the defendants to, and attend the final closing ceremony. There is no evidence that Rudzewicz negotiated anyone ever in Miami or even sent mail during negotiations. there He maintained no staff in the state Florida, and as far as the record reveals, he has never even visited the state. contemplated startup
“The contracts of a local Michigan profits solely restaurant whose would derive Drayton from food sales made to customers Plains. intangible The sale, which involved the use of an trade- Michigan occupancy mark in facility of a required performance there, no in the state of Michigan Florida. Under contract, the local dis- responsible providing trict officewas all of the serv- including advertising manage- ices due Rudzewicz, Supervision, ment consultation. moreover, emanated from that office alone. Michigan To Rudzewicz, the purposes all office was for intents and the embodiment *23 Burger King. of He had reason to believe that his King began working Burger and ended with relationship anonymous Michigan, not at the distant and Florida headquarters. . . . con-
“Given that the office Rudzewicz’ home state negotiations wholly supervised ducted all of the contract, we believe that he had reason to assume supervisory the state of the office would be the same in which would file suit. Rudzewicz state corporate headquar- fair notice that the distant lacked dealings him ters from which insulated itself direct with him in the would later seek to assert over . . . courts of its own home state. possibility
“Just as Rudzewicz lacked notice of the financially unprepared in Florida, suit he was to meet relationship particular its added costs. The franchise surprise. fraught potential for financial with is gives device of the franchise local retailers the access recognition to national trademark which enables them compete better-financed, more efficient chain however, national does affiliation, stores. This not alter typical store is a concern the fact that the franchise local serving neighborhood community. a or Neither best geographical a local business nor the revenues of prepares average range its market franchise litigation. distant the cost of . . . owner for particular bargaining power distribution of in the “The relationship impairs further franchisee’s franchise preparedness. In contract, a ‘the financial franchise normally occupies [the] role’. . . . franchisor dominant disparity bargaining “We discern a characteristic power this There is no indication the facts of case. any negotiate reduced that Rudzewicz had latitude to a exchange risk of rent fee in for the added or franchise signed contract suit in standard form Florida. He appeared non-negotiable whose and which terms were *24 respects vary in some from the more favorable agreed terms into earlier discussions. In the final fact, required monthly computed contract a minimum rent on negotia- base far excess of that discussed in oral price only tions. resisted concessions, doing sue severely Rudzewicz far from In home. so, it impaired ability Michigan might his to call witnesses who be essential to his defense and counterclaim.
“In
Dray-
sum, we hold that the circumstances of the
negotiations
ton Plains franchise and the
which led to it
left
financially
Rudzewicz bereft of reasonable notice and
unprepared
prospect
litigation
for the
of franchise
Florida.
Jurisdiction under these circumstances would
offend the fundamental fairness which is the touchstone
process.”
(1984)(foot-
of due