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Facts.

Defendant Shute purchased passage for a seven day cruise on the Tropicale, a
ship owned by Plaintiff, through a Washington travel agent. The face of each ticket
contained terms and conditions of passage, which included an agreement that all
matters disputed or litigated subject to the travel agreement, would be before a Florida
court. Defendant boarded the ship in California, which then sailed to Puerto Vallarta,
Mexico before returning to Los Angeles. While the ship was in international waters,
Defendant Eulala Shute was injured from slipping on a deck mat. Defendants filed suit
in Federal District Court in Washington. Defendant filed a motion for summary
judgment, alleging that the clause in the tickets required Defendants to bring their suit in
Florida.

Issue. Whether the court should enforce a forum-selection clause forcing individuals to
submit to jurisdiction in a particular state.

Held. Yes. The Supreme Court of the United States held that the Court of Appeals erred
in refusing to enforce the forum-selection clause.
Forum-selection clauses contained in form passage contracts are subject to judicial
scrutiny for fundamental fairness, but where they are not lacking in fairness, they will be
enforced.

Facts. Rudzewicz and MacShara (Defendants), residents of Michigan, had a contract


with Burger King (Plaintiff) as franchisees for 20 years. The contract said that the
franchise relationship would be established in Miami (where Plaintiff’s principal offices
are) and that the relationship would be governed by Florida law. Defendants fell behind
in monthly payments and Plaintiff brought a diversity action in federal court in Florida.
Defendants argued that the court lacked jurisdiction because Defendants were
residents of Michigan and the claim did not “arise” in Florida. The Court said the claims
did arise under the Florida long-arm statute and found for Plaintiff. The Court of Appeals
reversed on the grounds that exercising jurisdiction would offend the “fundamental
fairness of due process.” P appealed.

Issue. : May a court may exercise personal jurisdiction on a franchisee in an action for
breach of contract when the franchisee voluntarily accepts long-term and exacting
regulation by the franchisor’s headquarters, the franchisee had notice that he may be
subject to suit in the forum state, and the franchisee would not be gravely
disadvantaged by exercising jurisdiction in the forum state?

Held. Yes. Reversed and remanded. The general rule is that Defendant must have
minimum contacts with the forum state so that Defendant’s conduct and connection are
such that Defendant can reasonably foresee being hailed into court there. In addition,
the court must consider whether asserting personal jurisdiction will comport with
“notions of fair play and substantial justice.” If litigation in the forum state would cause a
“severe disadvantage,” then minimum contacts are not enough. The contract term
stating that the franchise relationship would be governed by Florida law constituted
“purposeful availment” of the benefits and protections of Florida law by the defendants.
When a contract calling for a certain forum is not made under duress or
misrepresentation then jurisdiction over the defendants is proper unless the defendants
would be inconvenienced to such an extent that having to litigate in the forum state
would be unconstitutional.