Opinion ID: 799452
Heading Depth: 3
Heading Rank: 1

Heading: Judicial Estoppel as Applied to Starke, Payne, and Timmons

Text: The district court also granted summary judgment on the individual claims of Starke, Payne, and Timmons, and also on the EEOC's claims on their behalf. CRST Van Expedited, Inc., 614 F.Supp.2d at 973-77. Specifically, the district court concluded that, because each of the three women failed to disclose her involvement in the instant lawsuit as a potential source of income on her bankruptcy petition, she is judicially estopped from seeking relief. Id. Likewise, the district court also applied judicial estoppel to the EEOC, precluding the EEOC from seeking redress in its own § 706 suit for harassment that Starke, Payne, or Timmons allegedly suffered. Id. at 973. In October 2005, Starke and her husband filed, in the federal bankruptcy court for the Northern District of Texas, a voluntary petition as joint debtors praying for protection under Chapter 7 of the Bankruptcy Code. They did not include a claim for sexual harassment among their contingent assets in their petition, nor did they amend their petition at anytime between December 2005, when Intervener Starke initially filed her administrative charge of discrimination with the EEOC, or March 2006, when the bankruptcy court fully discharged their debts. In December 2008, three months after intervening in the instant lawsuit and over one year after the EEOC filed it, Starke moved to reopen her and her husband's joint bankruptcy to add the claim as a potential asset. Similarly, in October 2005, Payne filed, in federal bankruptcy court for the Southern District of Ohio, a voluntary petition under the name of Christina Sprinkle for protection under Chapter 13 of the Bankruptcy Code. Payne omitted from her list of assets any potential claim against CRST for sexual harassment. After the EEOC filed the instant lawsuit in September 2007, Payne did not amend her petition's asset schedules to include the claim. On May 24, 2010, Payne received a full discharge. In March 2008, Timmons and her husband filed, in federal bankruptcy court for the Western District of Missouri, a voluntary petition as joint debtors seeking protection under Chapter 7 of the Bankruptcy Code. Timmons did not disclose any potential cause of action against CRST and, in June 2008, she and her husband received a full discharge. We review for abuse of discretion a district court's invocation of judicial estoppel. Triple H Debris Removal, Inc. v. Companion Prop. & Cas. Ins. Co., 647 F.3d 780, 785 (8th Cir.2011) (citing Capella Univ., Inc. v. Exec. Risk Specialty Ins. Co., 617 F.3d 1040, 1051 (8th Cir.2010)). We apply this deferential standard of review based on our acknowledgment that the district court is best equipped to decide judicial estoppel's applicability because determining whether a litigant is playing fast and loose with the courts has a subjective element and its resolution draws upon the trier's intimate knowledge of the case at bar and his or her first-hand observations of the lawyers and their litigation strategies. Stallings v. Hussmann Corp., 447 F.3d 1041, 1046 (8th Cir. 2006) (quotation, alteration, and citation omitted). We will uphold the district court's decision to apply judicial estoppel unless it plainly appears that the court committed a clear error of judgment in the conclusion it reached upon a weighing of the proper factors. Id. at 1046-47 (quotations and citation omitted). As an initial matter, we need not address Starke's contention that the district court abused its discretion in judicially estopping her from prosecuting her intervener claims against CRST. Starke alleges in her brief that the district court failed to consider certain mitigating factors counseling against judicial estoppel's application. Specifically, Starke maintains that she inadvertently failed to include her intervener claim in her bankruptcy petition. She claims that the language barrier created by her German birth and consequent lack of fluency in English limited her ability to assist her bankruptcy counsel. Starke also notes that, as soon as [she] learned that her claim against CRST should have been disclosed, [she] took immediate steps to have the bankruptcy reopened and her filings amended to contain the claim against CRST. However, Starke's counsel conceded at oral argument that Starke lacked standing to assert her Title VII claim. [14] In light of this concession, we need not address Starke's appeal of the district court's decision to judicially estop Starke from pursuing her intervener claims against CRST, and we instead consider only whether the district court abused its discretion in judicially estopping Payne and Timmons. As the Supreme Court has explained, the doctrine of judicial estoppel `generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase.' New Hampshire v. Maine, 532 U.S. 742, 749, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001) (quoting Pegram v. Herdrich, 530 U.S. 211, 227 n. 8, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000)). By logical extension, [j]udicial estoppel [also] prevents a person who states facts under oath during the course of a trial from denying those facts in a second suit, even though the parties in the second suit may not be the same as those in the first. Stallings, 447 F.3d at 1047 (quotations and citation omitted). This doctrine protects the integrity of the judicial process. Id. (quotations and citation omitted). Although [t]he circumstances under which judicial estoppel may appropriately be invoked are probably not reducible to any general formulation of principle, id. (citing New Hampshire, 532 U.S. at 750, 121 S.Ct. 1808), the Supreme Court, in New Hampshire v. Maine , articulated a non-exhaustive list of [t]hree factors. . . [to] aid a court in determining whether to apply the doctrine, id. (citing New Hampshire, 532 U.S. at 751, 121 S.Ct. 1808). First, a party's later position must be clearly inconsistent with its earlier position. Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled. Absent success in a prior proceeding, a party's later inconsistent position introduces no risk of inconsistent court determinations, and thus poses little threat to judicial integrity. A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped. Id. (quoting New Hampshire, 532 U.S. at 750-51, 121 S.Ct. 1808). Taking each factor in turn, we conclude that the district court did not abuse its discretion by judicially estopping Payne and Timmons from pursuing their respective claims insofar as they may seek to subsequently intervene in the EEOC's action or otherwise seek relief individually. Notably, with respect to the first factor concerning a clear inconsistency between former and subsequent positions, we have observed that, [i]n the bankruptcy context, a party may be judicially estopped from asserting a cause of action not raised in a reorganization plan or otherwise mentioned in the debtor's schedules or disclosure statements. Id. Estoppel may apply because a debtor's failure to list a claim in the mandatory bankruptcy filings is tantamount to a representation that no such claim existed. Id. (quotations and citation omitted). As recounted above, none of the women disclosed their involvement or potential involvement in this action. The second New Hampshire factor requires that the bankruptcy court have adopted the debtor's position. Id. at 1048. This factor might be satisfied where the bankruptcy court issues a `no asset' discharge, thereby evidencing that the bankruptcy court has effectively adopted the debtor's position. Id. Again, as already noted, Payne, and Timmons each procured a full discharge without disclosing her potential claim against CRST. In contrast, in Stallings, we found no judicial acceptance of Stallings's inconsistent position because the bankruptcy court never discharged Stallings's debts based on the information that Stallings provided in his schedules. Id. at 1149. Payne filed her bankruptcy petition in 2005, prior to the institution of suit, but that does not spare her from possible judicial estoppel. Under the principles of judicial estoppel, she was still obliged to amend her petition to disclose her involvement or potential involvement in the post-petition lawsuit. Id. at 1148. As we stated in Stallings, a debtor who files h[er] bankruptcy petition, subsequently receives a right-to-sue letter from the EEOC, and then fails to amend h[er] bankruptcy petition to add h[er] lawsuit against h[er] employer as a potential asset is estopped from bringing the lawsuit because the debtor knew about the undisclosed claims and had a motive to conceal them from the bankruptcy court. DeLeon v. Comcar Indus., Inc., 321 F.3d 1289, 1291 (11th Cir.2003). Id. Under the final New Hampshire factor, the debtor's non-disclosure of the claim must not be inadvertent and must result in the debtor gaining an unfair advantage. Id. We have stressed that, pursuant to this third factor, a district court should not judicially estop a debtor whose prior inconsistent position was attributable to a good-faith mistake rather than as part of a scheme to mislead the court. Id. (quotations and citation omitted); accord New Hampshire, 532 U.S. at 753, 121 S.Ct. 1808 (We do not question that it may be appropriate to resist application of judicial estoppel when a party's prior position was based on inadvertence or mistake. (quotations and citation omitted)). That said, no evidence of any such good-faith error or omission is present in this case. In fact, some evidence suggests otherwise. As already noted, Starke herself concedes that the district court correctly judicially estopped her. Also, Timmons and her husband filed their joint petition an entire year after the EEOC instituted suit in this matter, indicating, at the very least, that they had notice of Timmons's potential claim. Finally, as the district court noted, [t]he actions of . . . Ms. Timmons are especially galling because she used the bankruptcy process to discharge or reduce debts owed to CRST and now seek[s] to recover funds from CRST free and clear of the bankruptcy process. CRST Van Expedited, Inc., 614 F.Supp.2d at 975 (citing New Hampshire, 532 U.S. at 750, 121 S.Ct. 1808). `Where a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him. ' New Hampshire, 532 U.S. at 749, 121 S.Ct. 1808 (emphasis added) (quoting Davis v. Wakelee, 156 U.S. 680, 689, 15 S.Ct. 555, 39 L.Ed. 578 (1895)). Accordingly, based on this record, we cannot conclude that the district court abused its discretion in judicially estopping Payne or Timmons from individually pursuing their respective claims against CRST for sexual harassment.