From GE Commercial Finance Bus. Prop. Corp. v. Heard, 2009 U.S. Dist. LEXIS 41882 (M.D. Ga. May 18, 2009):

Under Georgia law, a pre-litigation contractual jury trial waiver is unenforceable. Bank S., N.A. v. Howard, 264 Ga. 339, 340, 444 S.E.2d 799, 800 (1994) (holding that "pre-litigation contractual waivers of jury trial are not provided for by [the Georgia] Constitution or Code and are not to be enforced in cases tried under the laws of Georgia"). Therefore, the contractual jury trial waivers in the Georgia contracts are void and unenforceable under Georgia law, and Defendants undeniably would have been entitled to a jury trial had these claims been brought in the state courts of Georgia. Moreover, under general Erie principles, this federal court is bound by Georgia law and likewise finds the contractual jury trial waivers void and unenforceable.

Plaintiffs, relying upon broad language in factually distinguishable precedent, argue that contractual jury trial waivers are always enforceable in federal court as long as they meet a "general federal law standard" of having been entered into knowingly and voluntarily. Plaintiffs are correct that federal courts often parrot the broad language of the Supreme Court that "the right to a jury trial in the federal courts is to be determined as a matter of federal law in diversity as well as other actions." Simler v. Conner, 372 U.S. 221, 222, 83 S. Ct. 609, 9 L. Ed. 2d 691 (1963) (per curiam); see also Merrill Lynch & Co. v. Allegheny Energy, Inc., 500 F.3d 171, 188 (2d Cir. 2007) ("When asserted in federal court, the right to a jury trial is governed by federal law."); Med. Air Tech. Corp. v. Marwan Inv., Inc., 303 F.3d 11, 18 (1st Cir. 2002) ("In a diversity jurisdiction suit, the enforcement of a jury waiver is a question of federal, not state, law."). It is also true that "[t]he question of a waiver of a federally guaranteed constitutional right is, of course, a federal question controlled by federal law." Brookhart v. Janis, 384 U.S. 1, 4, 86 S. Ct. 1245, 16 L. Ed. 2d 314 (1966); see also Tracinda Corp. v. DaimlerChrysler AG, 502 F.3d 212, 222 (3d Cir. 2007) ("The question of a waiver of a constitutional right, including the Seventh Amendment right to a jury trial, is a federal question controlled by federal law. Federal courts apply federal law in determining whether a contractual jury trial waiver is enforceable." (internal citations omitted)). Based on these cases, Plaintiffs argue that Georgia law invalidating such contractual jury trial waivers must yield to the "general federal law" on this subject, which Plaintiffs argue mandates the enforcement of contractual jury trial waivers that are entered into knowingly and voluntarily.

The Court finds that Plaintiff's analysis stretches the foregoing precedents beyond the bounds of Erie. A careful analysis of the applicable precedent reveals an important distinction that Plaintiffs (and quite frankly some courts) ignore. Because the vast majority of states permit pre-litigation contractual jury trial waivers, the application of state law in the cases relied upon by Plaintiffs would likely have had the effect of restricting one's federal constitutional right to a jury trial. Therefore, those courts correctly held that in determining whether a state could restrict one's right to a jury trial, the state law at a minimum had to protect one's federal right to a jury trial under the U.S. Constitution. Thus, any contractual waiver of a jury trial under state law must assure that the waiver complies with the federal constitutional standard of being knowing and voluntary. This does not mean, however, that the "general federal law" (whatever that may be) mandates that all contractual waivers entered into knowingly and voluntarily shall always be enforced in actions filed in federal court. To accept this proposition, one would have to find in the U.S. Constitution a federally protected interest in the enforcement of a party's contractual forfeiture of the right to a jury trial. While there is certainly an important federal interest in protecting the right to a jury trial, this Court cannot find anywhere a federal interest in protecting the right from a jury trial.

[Footnote 4] The Court makes two final observations. First, it does not find the traditional substantive versus procedural Erie analysis helpful here. As recognized by the Court of Appeals, that analysis has yielded less than clear guideposts. See Esfeld v. Costa Crociere, S.P.A., 289 F.3d 1300, 1305 (11th Cir. 2002) (noting that "the distinction between substance and procedure can be far from self-evident"). Nevertheless, even using this traditional terminology, it appears clear that the validity of a contractual provision that has the effect of restricting one's right to a jury trial unless state law that invalidates such a provision is applied involves substantive rather than procedural law. Second, the Court notes that at least one other circuit apparently shares this Court's Erie concerns regarding the tendency to ignore state law whenever the right to a jury trial is even mentioned. See IFC Credit Corp. v. United Bus. & Indus. Fed. Credit Union, 512 F.3d 989, 991-92 (7th Cir. 2008) (holding that state law governs the validity of a contractual agreement to a bench trial).