## Facts

- Joni Miller allegedly suffered personal injuries after biting into a “heart-shaped sapphire stone” in a Big Mac purchased at a McDonald’s-branded restaurant in Tigard, Oregon.
- The restaurant was owned and operated by 3K Restaurants (3K), a franchisee operating under a license agreement with McDonald’s Corporation.
- The license agreement required 3K to operate the restaurant in accordance with the “McDonald’s System,” including standardized marks, designs, food specifications, and operational methods.
- McDonald’s manuals and standards governed food formulas and specifications, inventory and operation controls, bookkeeping procedures, and other management and personnel policies.
- 3K agreed to use McDonald’s formulas, methods, and policies (including later modifications) and to use only McDonald’s provided or preapproved advertising and promotional materials.
- The agreement required 3K to follow McDonald’s prescribed standards, including serving only designated products and following McDonald’s specifications for equipment and layout, as well as implementing later reasonable changes required by McDonald’s.
- To customers, the restaurant appeared to be a typical McDonald’s: McDonald’s signage and design, McDonald’s uniforms, and standard menu items.
- Apart from a small sign identifying 3K as owner, the restaurant gave no clear indication that it was not owned by McDonald’s; Miller testified she chose it because it looked like a McDonald’s and she expected the same food and service as other McDonald’s locations.

## Issues

1. Whether evidence of McDonald’s retained right to control restaurant operations created a triable issue that 3K acted as McDonald’s actual agent for food preparation and handling, supporting vicarious liability.
2. Whether McDonald’s branding and presentation could support apparent agency by representing the franchise as McDonald’s own and whether Miller justifiably relied on that representation.

## Decision

- The Oregon Court of Appeals reversed the summary judgment entered for McDonald’s and remanded.
- The court held the record permitted a reasonable jury to find actual agency because McDonald’s retained a right to control the methods and details of day-to-day operations tied to the alleged negligence, including food preparation and handling.
- The court held the record also permitted a reasonable jury to find apparent agency because McDonald’s presentation of uniform branding could be found to represent the restaurant as McDonald’s, and Miller offered evidence of reliance on that representation.
- The agreement’s “independent contractor” language was relevant but not dispositive; the relationship turned on the right of control and the evidence could support agency despite the label.

## Legal Principles

- In determining actual agency for vicarious liability, the key inquiry is the alleged principal’s right to control the manner and means of the work related to the alleged negligent conduct, not the contract’s “independent contractor” label.
- A franchisor’s detailed operational standards and retained power to require compliance and changes may support a finding of a right to control sufficient to submit actual agency to a jury.
- Apparent agency requires (1) a representation by the alleged principal that another acts as its agent and (2) justifiable reliance by the third party resulting in harm; standardized branding and consumer-facing uniformity may supply the representation element.
- Summary judgment is improper where the evidence, viewed favorably to the nonmoving party, would allow an objectively reasonable juror to find for that party on agency-based vicarious liability.

## Conclusion

The appellate court held that evidence of McDonald’s operational control provisions and uniform consumer-facing presentation created triable issues on both actual and apparent agency, requiring reversal of summary judgment and remand for further proceedings.


Miller v. McDonald’s Corp., 150 Or. App. 274, 945 P.2d 1107 (1997)