District court relies on diversity jurisdiction over a Michigan resident who breached a franchise agreement with a Florida corporation by failing to make payments in Florida. Burger King’s principal offices are in Miami. The contracts provide that the franchise relationship is established in Miami and is therefore under Florida law. All payments are forwarded to Miami offices.
District Court in FL, D’s argue that claim did not arise within the state of FL, and therefore FL courts cannot exercise personal jurisdiction over them. District court holds of Burger King: “a non-resident franchisee is subject to the personal jurisdiction of the court in actions arising out of its franchise agreements.”
R and M file an answer and counterclaims seeking damages for alleged violations by BK of Michigan’s Franchise Investment Law. Court again finds for BK.
R and M appeal. Judgment is reversed on the grounds that “the District Court could not properly exercise person jurisdiction over R because the circumstances of the franchise in Michigan and the negotiations which led to it left R bereft of reasonable notice and financially unprepared for the prospect of franchise litigation in Florida. Majority concludes, jurisdiction under these circumstances would offend the fundamental fairness which is the touchstone of due process.
Does Florida’s exercise of long arm jurisdiction offend “traditional conceptions of fair play and substantial justice?”
“Because it is unclear whether the court of appeals held that the Florida long arm statute itself is unconstitutional when applied to this particular case, jurisdiction by appeal does not exist.” Petition reversed, remanded.
“The establishment of a contract itself cannot suffice as the establishment of minimum contact. The terms of the contract, prior agreement, future consequences, and of the contract itself should be used to evaluate whether or not the defendant purposefully established minimum contacts. R and M entered into a carefully planned contract that intended continuous, wide-reading contact with BK in Florida. The nature of his relationship was in no way fortuitous or random. The contract documents themselves emphasize that Burger King’s operations are conducted and supervised from the Miami headquarters, that all relevant notices and payments must be sent there, and that the agreements were made in and enforced from Miami – R and M knew this very well.”
“The choice of law provision is significant. Although it cannot determine jurisdiction alone, it can reinforce the affiliation with the state of Florida.”
“It is undisputed that appellee maintained no place of business in Florida, that he had no employees in that State, and that he was not licensed to do business there. Appellee did not prepare his French fries, shakes, and hamburgers in Michigan, and then deliver them into the stream of commerce “with the expectation that they [would] be purchased by consumers in” Florida. Ante, at 473. To the contrary, appellee did business only in Michigan, his business, property, and payroll taxes were payable in that State, and he sold all of his products there.”
The state of Florida’s long-arm statute extend jurisdiction to any persons whether or not a citizen or resident of the state who inter alia breaches a contract in the state by failing to perform acts required by the contract to be performed in the state, so long as the cause of action arises from the alleged contractual breach.