MIAMI BUSINESS LITIGATION: CHOICE OF LAW PROVISIONS DO NOT AUTOMATICALLY CONFER PERSONAL JURISDICTION

Florida businesses often include “choice of law” provisions in their contracts to identify the substantive state law that will govern disputes that may later arise under the contract. These provisions provide the contracting parties with a greater degree of certainty as to how certain claims ultimately resolve in the future. Choice of law provisions are particularly important for businesses to consider when drafting commercial and consumer contracts with parties from different states. However, under Florida law, a choice of law provision does not automatically confer personal jurisdiction over an out-of-state litigant to be sued in the same state as the chosen law. Peter Mavrick is a Miami business litigation attorney, and represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment law, and other legal disputes in federal and state courts and in arbitration.

Florida courts will generally enforce a choice-of-law provision in a contract unless the law of the chosen forum contravenes strong public policy. Punzi v. Shaker Adver. Agency, Inc., 601 So. 2d 599 (Fla. 2d DCA 1992). This rule “is premised on the presumption that choice-of-law provisions are valid unless the party seeking to avoid enforcement of them sufficiently carries the burden of showing that the foreign law contravenes strong public policy of the forum jurisdiction.” Walls v. Quick & Reilly, Inc., 824 So. 2d 1016 (Fla. 5th DCA 2002). “Where a contract is clear and unambiguous, it must be enforced pursuant to its plain language.” Hahamovitch v. Hahamovitch, 174 So. 3d 983 (Fla. 2015). Florida courts will therefore enforce unambiguous choice-of-law provisions unless a specific public policy sufficiently outweighs the general public policy protecting freedom of contract. Mazzoni Farms, Inc. v. E.I. DuPont De Nemours & Co., 761 So. 2d 306 (Fla. 2000). Moreover, choice-of-law provisions in commercial contracts are also expressly authorized by Section 671.105(1), Florida Statutes., which provides: “[W]hen a transaction bears a reasonable relation to this state and also to another state or nation, the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties.”

Choice of law provisions reflect “[a]n agreement between parties to be bound by the substantive laws of another jurisdiction.” Se. Floating Docks, Inc. v. Auto-Owners Ins. Co., 82 So. 3d 73 (Fla. 2012). “It is well established that when the parties to a contract have indicated their intention as to the law which is to govern, it will be governed by such law in accordance with the intent of the parties.” Dep’t of Motor Vehicles ex rel. Fifth Ave. Motors, Ltd. v. Mercedes-Benz of N. Am., Inc., 408 So. 2d 627 (Fla. 2d DCA 1981). Choice of law clauses consistently provide that the agreement be governed, construed, interpreted, or enforced by or in accordance with the laws of the State of Florida or another state of the parties’ choosing. Banco Indus. de Venezuela C.A., Miami Agency v. de Saad, 68 So. 3d 895 (Fla. 2011).

A party’s consent to the substantive laws of a given state does not, on its own, subject the contracting parties to the given state’s jurisdiction. In this sense, a party may contractually agree to resolve its disputes under Florida law, but that does not mean the parties agree to resolve their disputes in Florida. Even if the contract is governed by Florida law, Florida courts still must independently establish personal jurisdiction over the contracting parties. A “choice of laws provision, without more, is insufficient to establish long-arm jurisdiction over a nonresident defendant.” deMco Techs., Inc. v. C.S. Eng’rd Castings, Inc., 769 So. 2d 1128 (Fla. 3d DCA 2000). Indeed, “a choice-of-law clause is insufficient by itself to confer personal jurisdiction.” Burke Products, Inc. v. Access Elecs., LLC, 311 So. 3d 145 (Fla. 2d DCA 2020).

In the recent case Tribeca Asset Mgmt., Inc. v. Ancla International, S.A., the Supreme Court of Florida found that Florida courts did not have personal jurisdiction over a contracting party because the choice of law provision only referred to the laws of Florida rather than Florida as a venue. SC21-24, 2022 WL 869780 (Fla. Mar. 24, 2022). The corporate defendant also lacked sufficient contacts with Florida. Tribeca therefore held that the trial court did not have personal jurisdiction over the corporate defendant because the choice of law addressed only the governing area of law but, critically, the corporation did not otherwise have sufficient minimum contacts with Florida.

Peter Mavrick is a Miami business litigation lawyer, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.