Burger King brought suit against John Rudzewicz, a franchisee of the brand, under federal diversity jurisdiction for breach of contract. The suit was brought in a federal court in Florida, where Burger King’s corporate headquarters rested, but Rudzewicz and the franchise location were in Michigan. Rudzewicz challenged jurisdiction, and the district court applied Florida’s long-arm statute to permit. Rudzewicz appealed to the Federal Court of Appeals, which reversed on the fairness doctrine. Appealed to SCOTUS.
Questions of law
What is the appropriate doctrine for determining jurisdiction and the validity of long-arm statutes concerning the fulfillment of contractual obligations within a state? Does “fair warning” apply?
The court stated that the Due Process Clause could not be “wielded as a territorial shield” to “avoid interstate obligations that have been voluntarily assumed.” It stated that the minimum contacts and purposeful availment of a non-consenting party must be the result of action by that party.
Purposeful establishment of minimum contacts was described as a first step, after which the “fair play and substantial justice” test would be applied. It found broadly that holding Rudzewicz accountable in Florida did not offend the sense of fair play and substantial justice, as Rudzewicz had purposefully entered into a long-term contractual relationship with the Florida Burger King corporate office.
SCOTUS reversed the appellate decision but stated it shared the appellate court’s concern about talismanic jurisdictional formulas.