You are the City Manager for the City of Bliss, in the State of Arizona. The City has contracted with an Arizona company, Removal Masters, Inc. (RMI), for weekly garbage removal. RMI is a franchised operation, under a franchise agreement with the franchisor located in Texas.
The Texas franchisor wants to file a lawsuit in Texas against RMI for breach of contract. RMI claims that the Texas court has no personal jurisdiction over it. The outcome of this case may affect the cost of City garbage services.
Using the IRAC method of analysis described above in “How to Solve Business Case Problems,” explain why either the Texas state or Texas federal court (or, perhaps, neither) would have jurisdiction of this lawsuit?
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