Burger King Corporation v. Rudzewicz

PETITIONER: Burger King Corporation
RESPONDENT: Rudzewicz
LOCATION: United States Courthouse

DOCKET NO.: 83-2097
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Eleventh Circuit

CITATION: 471 US 462 (1985)
ARGUED: Jan 08, 1985
DECIDED: May 20, 1985

ADVOCATES:
Joel S. Perwin - on behalf of the appellant
Thomas H. Oehmke - on behalf of the appellee

Facts of the case

Question

Media for Burger King Corporation v. Rudzewicz

Audio Transcription for Oral Argument - January 08, 1985 in Burger King Corporation v. Rudzewicz

Warren E. Burger:

We will hear arguments next in Burger King against Rudzewicz.

Mr. Perwin, I think you may proceed whenever you are ready.

Joel S. Perwin:

Thank you.

Mr. Chief Justice, and may it please the Court, the first question is whether this Court's jurisdiction is conferred by direct appeal under Subsection 1254.2.

We submit that the Circuit Court declared unconstitutional as applied a provision of Florida's long arm statute which confers jurisdiction over one who breaches a contract in Florida by failing to perform acts required by the contract to be performed in Florida, in this case, by failing to make payments under a franchise lease and purchase and sales agreement connected with a Burger King franchise in a suburb of Detroit, Michigan.

Under Subsection 1254.2, the answer to that question depends upon the Circuit Court's chosen resolution of the issue.

In this case, as the Circuit Court's opinion states, both parties agree that by its plain language the jurisdictional statute in question plainly reached the conduct at issue.

Rather than revisiting that assumption, the Circuit Court proceeded to consider the constitutional question, and concluded that the District Court's exercise of jurisdiction was inconsistent with minimal constitutional requirements.

We suggest that on that basis, given that resolution, the prerequisites for the acceptance of a direct appeal under Subsection 1254.2 were satisfied.

As this Court said in its 1984 Franchise Tax Board decision, a necessary predicate to the Court of Appeals' holding is that enforcement of the state statute would be inconsistent with federal law, hence invalid under the Constitution.

Accordingly, we have jurisdiction under Section 1254.2.

We also argued that the parties' stipulation in the District Court was an appropriate one in light of the plain language of this statute and its interpretation by a clear majority of Florida appellate courts.

And finally, we argued that independent of the question of direct appeal, the case is one of far-ranging and far-reaching importance.

It implicates a way of doing business which is increasingly pervasive in our society, and therefore renders appropriate the acceptance of jurisdiction by this Court.

My intention would be to rest with that, to submit the position of our brief on that issue, and in the absence of any inquiries, to proceed to the merits.

The question on the merits is whether the Circuit Court erred in holding that Florida's exercise of jurisdiction was inconsistent with the minimal requirements of due process, and that requires, of course, that we aggregate the contacts between these franchisees in Detroit and Burger King's headquarters in Miami and determine whether or not there were sufficient affiliating circumstances to put the franchisees on notice that they might be called to answer in a Florida court for any breach of contract or trademark infringement.

The contacts in this case can be abrogated under two general categories.

The first might be applicable to a case in which all we had was an arm's length contract for the purchase and sale of goods, independent of the intimacy of the franchise relationship which we have in this case.

In other words, even in the abstract there are a category of signals in the course of this relationship and in the contracts that were created between the parties, which we submit were independently sufficient to put the franchisees on notice of the possibility of a defense.

For example, three separate contracts, the lease agreement, the franchise agreement, and the purchase and sale agreement for equipment all called for the application of Florida law, creating an unmistakable signal of Florida's interest in the case, and under this Court's pronouncement in the International Shoe case, suggesting that the franchisees avail themselves of the protection and benefits of the forum.

Second, the lease agreement called for arbitration to be held in Florida if necessary, which this Court has at least acknowledged might represent a forum of implicit consent to jurisdiction of the Florida courts.

Third, the contracts are replete with references to Miami as Burger King's headquarters and as the locus of decisionmaking in this case.

They identify Burger King as a Florida corporation.

The initial franchise offering circular informed the franchisees that Burger King conducts its business in Miami, that that is the locus of decisionmaking.

All notices were required to be sent by the franchisees to Miami.

All payments were required to be sent by the franchisees to Miami.

Payments for rent, for royalties, advertising, real estate taxes, and that, incidentally or parenthetically, should have made very clear to the franchisees that a default in their payments would necessarily cause economic injury in Miami.

Indeed, in its recent decision in the Calder case, this Court in a footnote adopted the "effects" test which had been utilized by the Circuit Court for the proposition that the defendant should have realized that the effects of his conduct would be felt most deeply in the forum.

Byron R. White:

That would be true of just a sale of a particular piece of equipment that is payable in Florida.

So you don't argue that this last item you mentioned would be enough in itself.