## Facts

- Elizabeth F. Shuder and her husband were Pennsylvania residents who visited a McDonald’s restaurant in Virginia.
- Mrs. Shuder fell in the restaurant’s parking lot and suffered injuries.
- After returning home, Mrs. Shuder received medical treatment in Pennsylvania.
- Mrs. Shuder first sued the local franchisee, McDonald’s Virginia, in federal district court in Virginia, alleging negligent maintenance of the parking lot.
- The Virginia court applied Virginia negligence law (including contributory negligence principles), and a jury returned a verdict for Mrs. Shuder; that judgment was affirmed on appeal.
- The Shuders later sued McDonald’s Corporation (the national franchisor) in federal district court in Pennsylvania.
- In the Pennsylvania case, Mrs. Shuder and her husband (who asserted a loss-of-consortium claim) alleged the parking lot was unsafe because of its design and construction, not merely day-to-day maintenance.
- The Pennsylvania court applied Pennsylvania negligence law, and the jury found Mrs. Shuder 26% negligent and returned a verdict for the Shuders (with damages reduced for comparative fault).
- The district court denied McDonald’s Corporation’s motion for judgment notwithstanding the verdict, and McDonald’s appealed.

## Issues

1. Whether the prior Virginia federal-court judgment against the franchisee barred the later Pennsylvania action against McDonald’s Corporation under claim preclusion or issue preclusion.
2. Whether McDonald’s Corporation was in privity with the Virginia franchisee so that it could invoke preclusion based on the Virginia litigation.
3. Whether the Pennsylvania court properly applied Pennsylvania negligence and comparative-fault law, rather than Virginia’s contributory-negligence rule, to the Shuders’ claims.
4. Whether the evidence and trial rulings were sufficient to sustain the jury’s liability findings and the denial of judgment notwithstanding the verdict.

## Decision

- The Third Circuit affirmed the judgment for the Shuders.
- The court held that the Virginia judgment against the franchisee did not preclude the Pennsylvania action against McDonald’s Corporation because McDonald’s was not a party to the Virginia case and the relationship between franchisor and franchisee did not, by itself, establish privity for preclusion purposes.
- The court upheld the application of Pennsylvania negligence law, including comparative fault, resulting in a verdict reduced by Mrs. Shuder’s 26% share of negligence.
- The court concluded that the record permitted a reasonable jury to find liability on the Shuders’ design-and-construction theory and that the district court did not err in denying McDonald’s post-trial motion.

## Legal Principles

- Claim preclusion and issue preclusion generally require the same party (or a party in legally recognized privity) and do not automatically extend from a franchisee to a franchisor merely because of the franchise relationship.
- When successive suits target different defendants for different alleged wrongdoing (e.g., maintenance by a franchisee versus design/construction responsibility by a franchisor), a prior judgment against one defendant does not necessarily bar litigation against the other.
- In a diversity case, the forum applies its own choice-of-law rules to decide which state’s tort law governs; where the forum’s rules point to its comparative negligence regime, the plaintiff’s negligence reduces damages rather than operating as an absolute bar.
- A judgment notwithstanding the verdict is improper where, viewing the evidence in the light most favorable to the verdict winner, a reasonable jury could find negligence and causation on the theory presented at trial.

## Conclusion

In *Shuder v. McDonald’s Corporation*, the Third Circuit affirmed a Pennsylvania jury verdict for a couple injured in a Virginia McDonald’s parking lot, holding that a prior Virginia verdict against the local franchisee for negligent maintenance did not bar a later Pennsylvania action against the national franchisor based on alleged design and construction defects, and sustaining the application of Pennsylvania comparative negligence and the denial of McDonald’s post-trial motion.


Shuder v. McDonald's Corporation, 859 F.2d 266 (1988)