Pizza Hut v. Pandya, No. 22-40555 (5th Cir. 2023)
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Defendant was one of Pizza Hut L.L.C.’s largest franchisees in Pennsylvania, operating 43 restaurants there (plus one in Connecticut). Ultimately, though, Defendant failed to fulfill his contractual obligations, so Pizza Hut terminated the parties’ various franchise agreements. Hoping to keep the restaurants open, Pizza Hut entered into two post-termination agreements with Defendant for him to continue operating the restaurants while the parties tried to find a buyer. The first agreement was unsuccessful. The second ended in this litigation. After several rounds of pleading, Defendant demanded a jury trial. Pizza Hut moved to strike the request under the second post-termination agreement’s bilateral jury waiver. The district court enforced the waiver, and the case continued to a bench trial in which Pizza Hut prevailed. The only issue on appeal is whether the district court erred in striking Defendant’s jury demand.
The Fifth Circuit affirmed. The Seventh Amendment right to a jury trial is unassailable but not unwaivable. Courts have long honored parties’ agreements to waive the jury right if the waiver is knowing and voluntary. The court explained that it follows its sister circuits in holding that general allegations of fraud do not render contractual jury waivers unknowing and involuntary unless those claims are directed at the waiver provision specifically. Because Defendant failed to show that the jury waiver was unknowing and involuntary.
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