United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 7, 2010 Decided June 1, 2010
No. 08-7087
VIJAYAKUMAR MOSES AND JANET M. NESSE,
APPELLANTS
v.
HOWARD UNIVERSITY HOSPITAL,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:01-cv-02528-PLF)
James C. Strouse argued the cause and filed the brief for
appellants. Janet M. Nesse entered an appearance.
Stephen E. Baskin argued the cause and filed the brief for
appellee.
Before: SENTELLE, Chief Judge, TATEL, Circuit Judge, and
EDWARDS, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
EDWARDS.
EDWARDS, Senior Circuit Judge: In 2001, Vijayakumar
Moses (“Moses”) filed suit against Howard University Hospital
(“Howard”) claiming retaliation in violation of Title VII of the
2
Civil Rights Act of 1964 (“Title VII”), as amended, 42 U.S.C.
§ 2000e et seq., and the D.C. Human Rights Act of 1977
(“DCHRA”), D.C. CODE § 2-1401.01 et seq. After filing this
lawsuit, Moses twice filed for bankruptcy in the District of
Maryland. However, in his bankruptcy filings, Moses failed to
disclose the existence of this lawsuit as required by 11 U.S.C.
§ 541. Upon discovering these failures to disclose, Howard filed
a renewed motion for summary judgment on the ground that
Moses’s claims should be barred by judicial estoppel. The
District Court granted Howard’s motion, and Moses now
appeals. On appeal, Howard raises two additional grounds to
support the dismissal of this suit. First, Howard argues that
Moses lacks standing to maintain this appeal. Second, Howard
contends that Moses’s notice of appeal was untimely under
FED. R. APP. P. 4(a).
We hold that Moses has standing to appeal. In June 2009,
Janet M. Nesse (“Nesse”), the trustee appointed to oversee
Moses’s Chapter 7 bankruptcy estate, abandoned the estate’s
claims in this case. See 11 U.S.C. § 554(a). “[W]hen property
of the bankrupt is abandoned, the title ‘reverts to the bankrupt,
nunc pro tunc, so that he is treated as having owned it
continuously.’” Morlan v. Univ. Guaranty Life Ins. Co., 298
F.3d 609, 617 (7th Cir. 2002) (quoting Wallace v. Lawrence
Warehouse Co., 338 F.2d 392, 394 n.1 (9th Cir. 1964))
(emphasis added). Once the trustee abandoned the estate’s
claims, Moses was free to seek redress as if no bankruptcy
petition had been filed. See 5 COLLIER ON BANKRUPTCY
¶ 554.02[3], p. 554-5 (15th ed. rev. 2008).
We also hold that Moses’s notice of appeal was timely filed.
On July 1, 2008, the District Court entered judgment for Howard
against Moses. On July 9, 2008, Nesse, acting as trustee, filed
a motion under FED. R. CIV. P. 59(e) to amend the District
Court’s opinion and judgment to clarify that judicial estoppel
applied only if Moses elected to pursue his retaliation claims in
3
his own right. Nesse’s Rule 59(e) motion tolled the 30-day
notice of appeal requirement of Rule 4(a). See FED. R. APP. P.
4(a)(4)(A)(iv). On August 25, 2008, while the time for appeal
was still tolled, Moses filed a notice of appeal in his own right.
The retroactive effect of the trustee’s abandonment ensured that
Moses had standing to file a notice of appeal on August 25,
2008. On February 19, 2009, the District Court resolved
Nesse’s Rule 59(e) motion and Moses’s previously filed notice
of appeal took effect.
Finally, we uphold the District Court’s application of
judicial estoppel and affirm the summary judgment granted in
favor of Howard. “Courts may invoke judicial estoppel ‘[w]here
a party assumes a certain position in a legal proceeding, . . .
succeeds in maintaining that position, . . . [and then,] simply
because his interests have changed, assume[s] a contrary
position.’” Comcast Corp. v. FCC, 600 F.3d 642, 647 (D.C. Cir.
2010) (quoting New Hampshire v. Maine, 532 U.S. 742, 749
(2001)). Even after he had filed for bankruptcy, Moses
continued to hold himself out before the District Court as a valid
plaintiff, a position which was “clearly inconsistent” with his
pursuit of relief in bankruptcy. See Maine, 532 U.S. at 750
(internal quotation marks omitted). “[J]udicial acceptance of an
inconsistent position in a later proceeding . . . create[s] the
perception that either the first or the second court was misled,”
thus posing a threat to judicial integrity. See id. (internal
quotation marks omitted). Moses “derive[d] an unfair
advantage” in maintaining and controlling this lawsuit by falsely
holding himself out as a proper party. Id. at 751. Therefore, the
District Court did not err in applying judicial estoppel against
Moses. Accordingly, we affirm.
I. BACKGROUND
On February 22, 1999, appellant Moses filed the first of two
lawsuits against Howard, his then-employer, alleging race
discrimination, national origin discrimination, and retaliation in
4
violation of Title VII; race discrimination and retaliation in
violation of the DCHRA; and age discrimination in violation of
the Age Discrimination in Employment Act (“ADEA”), 29
U.S.C. § 621 et seq. On January 30, 2001, the District Court
entered summary judgment for Howard on all counts except
those related to Moses’s ADEA claim. See Moses v. Howard
Univ. Hosp., Civ. Action No. 99-0410 (D.D.C. Jan. 30, 2001)
(“Moses I”). The parties subsequently settled the ADEA claim,
and the case was dismissed with prejudice. See Moses v.
Howard Univ. Hosp., Civ. Action No. 01-2528, slip op. at 2
(D.D.C. July 1, 2008) (“Moses III”) (describing the proceedings
in the initial lawsuit).
In October 2000, Moses was terminated by Howard.
Moses then filed complaints with the Equal Employment
Opportunity Commission (“EEOC”) and the District of
Columbia Office of Human Rights, contending that he was
dismissed in retaliation for filing the 1999 lawsuit against
Howard. On September 14, 2001, Moses received a “right to
sue” letter from the EEOC. He then filed the instant lawsuit
with the District Court. In his complaint, Moses alleged that
Howard had retaliated against him in violation of Title VII and
the DCHRA. Howard denied the charges and moved for
summary judgment.
While this lawsuit was pending in District Court, Moses
initiated two separate bankruptcy proceedings. On September
20, 2003, Moses filed for bankruptcy under Chapter 7 of the
Bankruptcy Code, 11 U.S.C. § 701 et seq. This action was
brought in the District of Maryland, with Nesse assigned to
serve as trustee of Moses’s bankruptcy estate. A Chapter 7
proceeding “authorizes a discharge of prepetition debts
following the liquidation of the debtor’s assets by a bankruptcy
trustee, who then distributes the proceeds to creditors. . . .
Under Chapter 7 the debtor’s nonexempt assets are controlled by
the bankruptcy trustee.” Marrama v. Citizens Bank of Mass.,
5
549 U.S. 365, 367 (2007). On January 5, 2004, Moses secured
a discharge of approximately $20,000 in debt pursuant to his
Chapter 7 bankruptcy petition.
In early 2007, Moses again filed for bankruptcy in the
District of Maryland, this time under Chapter 13 of the
Bankruptcy Code, 11 U.S.C. § 1301 et seq. “Chapter 13
authorizes an individual with regular income to obtain a
discharge after the successful completion of a payment plan
approved by the bankruptcy court. . . . [U]nder Chapter 13 the
debtor retains possession of his property” during the course of
the bankruptcy proceeding. Marrama, 549 U.S. at 367. The
bankruptcy court rejected Moses’s proposed payment plan and
his Chapter 13 proceeding was closed on June 25, 2007.
In each of his bankruptcy proceedings, Moses was required
to execute, under penalty of perjury, a “Statement of Financial
Affairs” setting forth “all suits and administrative proceedings
to which the debtor is or was a party within one year
immediately preceding the filing of this bankruptcy case.”
Moses III, slip op. at 5 (citing Defendant’s Statement of
Undisputed Material Facts in Support of its Renewed Motion for
Summary Judgement (“Def.’s Undisputed Facts”) ¶¶ 13-14,
reprinted in Joint Appendix (“J.A.”) 3). A debtor is required to
disclose all potential claims in a bankruptcy petition. See 11
U.S.C. §§ 521(1), 541(a)(1). This means that a debtor is under
a duty both to disclose the existence of pending lawsuits when
he files a petition in bankruptcy and to amend his petition if
circumstances change during the course of the bankruptcy. See
Jethroe v. Omnova Solutions, Inc., 412 F.3d 598, 600 (5th Cir.
2005); In re Coastal Plains, Inc., 179 F.3d 197, 207-08 (5th Cir.
1999). And when an estate is in bankruptcy under Chapter 7,
the trustee is the representative of the estate and retains the sole
authority to sue and be sued on its behalf. See Parker v.
Wendy’s Int’l, Inc., 365 F.3d 1268, 1272 (11th Cir. 2004).
6
Nesse retained this authority as trustee in the Chapter 7
bankruptcy proceeding.
Despite these disclosure requirements, Moses failed to
reveal the existence of this lawsuit in either his Chapter 7 or
Chapter 13 bankruptcy proceedings. He did, however, disclose
his involvement in separate civil actions involving the
garnishment of his wages. See Moses III, slip op. at 5 n.3 (citing
Def.’s Undisputed Facts ¶¶ 13, 19, J.A. 3, 4).
Moses’s action in this case remained live in the District
Court during the course of both bankruptcy proceedings. On
February 12, 2007, the District Court “conclude[d] that genuine
issues of material fact remain[ed] with respect to Mr. Moses’s
termination claim[, and thus ruled that Howard was] not entitled
to summary judgment on this claim.” Moses v. Howard Univ.
Hosp., 474 F. Supp. 2d 117, 127 (D.D.C. Feb. 12, 2007)
(“Moses II”). The court also ruled that, “[w]ith respect to all
other adverse employment actions that Mr. Moses allege[d]
were taken in retaliation for his filing a discrimination complaint
and lawsuit, [it would] enter judgment for [Howard].” Id. The
District Court subsequently set a trial date for Moses’s claim
that his termination from employment constituted unlawful
retaliation.
While preparing for trial in this case, Howard uncovered
Moses’s Chapter 7 and Chapter 13 bankruptcy proceedings.
Howard also determined that Moses had neither disclosed this
action to the bankruptcy courts nor disclosed the bankruptcy
proceedings to the District Court. On December 6, 2007, with
this newly discovered information in hand, Howard renewed its
motion for summary judgment, arguing that judicial estoppel
barred Moses from maintaining this suit. In early 2008, after
Howard had revealed Moses’s failures to disclose, Moses moved
to reopen his Chapter 7 bankruptcy proceeding in the District of
Maryland to amend his original “Statement of Financial Affairs”
to reflect the existence of this lawsuit. On January 24, 2008, the
7
bankruptcy court granted Moses’s motion and reappointed
Nesse as trustee of the estate. While Howard’s renewed motion
for summary judgment was still pending before the District
Court, Nesse and Howard commenced negotiations over a
possible settlement of the pending retaliation claim.
On July 1, 2008, the District Court granted Howard’s
renewed motion for summary judgment. See Moses III, slip
op. at 1-13. On July 9, 2008, Nesse filed a Rule 17(a) motion to
substitute herself as plaintiff in this action. See FED. R. CIV. P.
17(a). On the same day, Nesse also filed a Rule 59(e) motion to
amend the opinion and judgment in Moses III, to clarify that
judicial estoppel would apply in this case solely against Moses
in the event that he acted in his own right to pursue the
retaliatory termination claim. See FED. R. CIV. P. 59(e). Moses
filed a notice of appeal on August 25, 2008, contesting the
District Court’s dismissal of his suit.
On February 19, 2009, the District Court approved Nesse’s
Rule 17(a) and Rule 59(e) motions. See Moses v. Howard Univ.
Hosp., Civ. Action No. 01-2528, slip op. at 1-8 (D.D.C. Feb. 19,
2009) (“Moses IV”). The District Court corrected the case
docket to show Nesse as plaintiff, and amended its July 1, 2008
judgment and opinion to clarify that its judicial estoppel holding
only applied to the extent that the retaliation claim was
“prosecuted by Mr. Moses on his own behalf.” Id. at 6.
Subsequently, when settlement negotiations between Nesse and
Howard failed to yield an agreement, Nesse notified the
bankruptcy court that she sought to abandon Moses’s claim in
this case as property of the estate. See 11 U.S.C. § 554(a). The
bankruptcy court approved Nesse’s abandonment on June 26,
2009. See Order Authorizing Abandonment of Property of the
Estate 1-2, reprinted in J.A. 494-95.
In this appeal, appellant Moses argues that the District
Court erred in granting summary judgment to Howard on
judicial estoppel grounds. Howard counters that judicial
8
estoppel applies in this case; Howard further contends that (1)
Moses lacks standing to pursue this appeal and (2) this court
lacks jurisdiction to hear the case because Moses failed to timely
file his notice of appeal within 30 days of the judgment below.
See FED. R. APP. P. 4(a).
II. ANALYSIS
A. Standing
“The Art. III judicial power exists only to redress or
otherwise to protect against injury to the complaining party,
even though the court’s judgment may benefit others
collaterally. A federal court’s jurisdiction therefore can be
invoked only when the plaintiff himself has suffered some
threatened or actual injury resulting from the putatively illegal
action. . . . [E]ven when the plaintiff has alleged injury
sufficient to meet the ‘case or controversy’ requirement, [the
Supreme] Court has held that the plaintiff generally must assert
his own legal rights and interests, and cannot rest his claim to
relief on the legal rights or interests of third parties.” Warth v.
Seldin, 422 U.S. 490, 499 (1975) (internal quotation marks and
citations omitted).
In the context of bankruptcy proceedings, it is well
understood that “a trustee, as the representative of the
bankruptcy estate, is the real party in interest, and is the only
party with standing to prosecute causes of action belonging to
the estate once the bankruptcy petition has been filed.” Kane v.
Nat’l Union Fire Ins. Co., 535 F.3d 380, 385 (5th Cir. 2008)
(per curiam). The commencement of Chapter 7 bankruptcy
extinguishes a debtor’s legal rights and interests in any pending
litigation, and transfers those rights to the trustee, acting on
behalf of the bankruptcy estate. See 11 U.S.C. § 541(a)(1)
(indicating that a bankruptcy estate includes “all legal or
equitable interests of the debtor in property”); id. § 323
(establishing the bankruptcy trustee as the “representative” of
9
the estate with the “capacity to sue and be sued” on its behalf).
Thus, “[g]enerally speaking, a pre-petition cause of action is the
property of the Chapter 7 bankruptcy estate, and only the trustee
in bankruptcy has standing to pursue it.” Parker, 365 F.3d at
1272; accord Turner v. Cook, 362 F.3d 1219, 1225-26 (9th
Cir. 2004); Detrick v. Panalpina, Inc., 108 F.3d 529, 535 (4th
Cir. 1997).
Howard argues that only Nesse, the trustee of the
bankruptcy estate, and not Moses, had standing to pursue the
claims in this case. That was true until June 2009, when Nesse
abandoned the estate’s claims in this case. An outstanding legal
claim that is abandoned by the trustee reverts back to the
original debtor-plaintiff. See 11 U.S.C. § 554(a) (directing that
“[a]fter notice and a hearing, the trustee may abandon any
property of the estate that is burdensome . . . or that is of
inconsequential value and benefit to the estate”); id. § 554(c)
(directing that “any property scheduled . . . [but] not otherwise
administered at the time of the closing of a case is abandoned to
the debtor and [considered] administered”). “‘[U]pon
abandonment . . . the trustee is . . . divested of control of the
property because it is no longer part of the estate. . . . Property
abandoned under [§] 554 reverts to the debtor, and the debtor’s
rights to the property are treated as if no bankruptcy petition was
filed.’” Kane, 535 F.3d at 385 (quoting 5 COLLIER ON
BANKRUPTCY ¶ 554.02[3], p. 554-5); see also Parker, 365 F.3d
at 1272.
Whatever interest passed to the trustee when Moses filed for
Chapter 7 bankruptcy was extinguished when Nesse abandoned
the cause of action in this case. Cf. Brown v. O’Keefe, 300 U.S.
598, 602 (1937). In other words, “when property of the
bankrupt is abandoned, the title reverts to the bankrupt, nunc pro
tunc, so that he is treated as having owned it continuously.”
Morlan, 298 F.3d at 617 (internal quotation marks and citation
omitted) (emphasis added). The retroactive effect of the
10
trustee’s abandonment ensured that Moses had standing to file
a notice of appeal on August 25, 2008, when he did. And, as
explained below, Moses’s notice of appeal was effective on
February 19, 2009, when the District Court disposed of the
trustee’s Rule 59(e) motion.
B. Timeliness
A court of appeals has no jurisdiction to entertain an appeal
that is filed outside of the time limits prescribed by FED. R. APP.
P. 4(a)(1)(A) and 28 U.S.C. § 2107(a). See Bowles v. Russell,
551 U.S. 205 (2007). These time limits are “mandatory and
jurisdictional,” and failure to file a timely notice of appeal
defeats the jurisdiction of a court of appeals. Id. at 210 (internal
quotation marks and citations omitted). Howard contends that
Moses’s appeal should be dismissed, because it was not “filed
with the district clerk within 30 days after the judgment or order
appealed from” was entered. See FED. R. APP. P. 4(a)(1)(A).
We disagree.
The District Court entered its original order granting
Howard’s motion for summary judgment on July 1, 2008. As
noted above, Nesse, acting as trustee, filed a Rule 59(e) motion
on July 9, 2008, seeking to amend the District Court’s judgment.
Rule 4(a) provides that “[i]f a party timely files [a motion to
alter or amend a judgment under Rule 59], the time to file an
appeal runs for all parties from the entry of the order disposing
of the last such remaining motion.” Id. at 4(a)(4)(A). In other
words, once Nesse filed her Rule 59(e) motion, this tolled the
time for the filing of an appeal.
Moses filed his notice of appeal on August 25, 2008, during
the time when the Rule 59(e) motion was still pending and the
time for filing an appeal was tolled. His notice of appeal was
thus early, not late. The trustee’s Rule 59(e) motion was not
disposed of until February 19, 2009, the date when the time to
file an appeal commenced to run for all parties. Where, as in
11
this case, the notice of appeal was filed before the District Court
resolved the pending Rule 59(e) motion, the notice of appeal
became effective when the order disposing of the 59(e) motion
was entered. See FED. R. APP. P. 4(a)(4)(B)(i) (“If a party files
a notice of appeal after the court announces or enters a judgment
– but before it disposes of any motion listed in Rule 4(a)(4)(A)
– the notice becomes effective to appeal a judgment or order, in
whole or in part, when the order disposing of the last such
remaining motion is entered.”). In other words, Moses’s early
notice of appeal was “in effect, suspended until the [59(e)]
motion [was] disposed of, whereupon, the previously filed
notice effectively place[d] jurisdiction in the court of appeals.”
See Advisory Committee’s Notes on FED. R. APP. P. 4(a)(4), 28
U.S.C. App.
On the record here, we conclude that Moses’s notice of
appeal was timely. The initial time for an appeal commenced
running on July 1, 2008. The 30-day limit was tolled on July 9,
2008, when Nesse filed her 59(e) motion. Moses’s August 25,
2008 notice of appeal was filed within this tolled period. And
as noted above, the retroactive effect of the trustee’s
abandonment ensured that Moses had standing to file a notice of
appeal on August 25, 2008. The time for an appeal began
running again on February 19, 2009, when the District Court
entered its order disposing of Nesse’s motion. Moses’s notice
of appeal, filed almost seven months earlier, thus became
effective on February 19.
Howard does not dispute these calculations, but instead
argues that Nesse’s Rule 59(e) motion could not have tolled
Moses’s filing time period, because Nesse was not a “party” to
the lawsuit when she filed her motion. This argument fails. At
the time when the trustee filed her Rule 17(a) and Rule 59(e)
motions, she was the only party who had a right to pursue the
cause of action that had been initiated by Moses. As noted
above, “a pre-petition cause of action is the property of the
12
Chapter 7 bankruptcy estate, and only the trustee in bankruptcy
has standing to pursue it.” Parker, 365 F.3d at 1272. Nesse’s
Rule 17(a) motion was a mere formality to confirm on the
court’s docket papers that the trustee, and not Moses, was the
proper plaintiff in this case. If there was a live case in the
District Court in July 2008 – and there was – the only proper
plaintiff was the trustee, not Moses. And the trustee surely had
the right to file a Rule 59(e) motion, because the District Court’s
decision in Moses III – dismissing the case on grounds of
judicial estoppel – directly affected the trustee’s authority to
pursue the cause of action on behalf of the estate.
It is also quite clear that the trustee cannot in any way be
faulted for her actions. Moses secured a discharge of his debt on
January 5, 2004, pursuant to the judgment entered in his Chapter
7 bankruptcy proceeding. It was not until early 2008, after
Howard had uncovered Moses’s failures to disclose, that Moses
moved to reopen his Chapter 7 bankruptcy proceeding in the
District of Maryland to amend his original “Statement of
Financial Affairs” to reflect the existence of this lawsuit. Nesse
became aware of the situation when the bankruptcy court
granted Moses’s motion and reappointed Nesse as trustee of the
estate on January 24, 2008. And after her reappointment, Nesse
commenced negotiations with Howard in an effort to settle this
lawsuit on behalf of the bankruptcy estate. Nesse then filed her
Rule 59(e) motion after settlement talks failed and the District
Court granted summary judgment in favor of Howard on
grounds of judicial estoppel. Nesse’s Rule 59(e) motion plainly
was an action taken by the real plaintiff in the case, for her
motion sought to alter the judgment in Moses III to clarify that
judicial estoppel did not apply to the trustee acting on behalf of
the bankruptcy estate. If Nesse had not secured relief under
Rule 59(e), the trustee would have been bound by the judgment
in Moses III holding that judicial estoppel barred further pursuit
of this case. This would have impaired the trustee’s authority to
pursue this cause of action on behalf of the estate. The trustee’s
13
Rule 17(a) and Rule 59(e) motions merely served to confirm,
not initiate, the trustee’s party status. Howard’s suggestion that
Nesse was not a party when she filed her Rule 59(e) motion is
thus without merit.
C. Judicial Estoppel
1. Standard of Review
The District Court granted summary judgment in favor of
Howard on the ground that Moses’s claim is barred by judicial
estoppel. This court reviews the District Court’s grant of
summary judgment de novo, see, e.g., Haynes v. Williams, 392
F.3d 478, 481 (D.C. Cir. 2004), and “must view the evidence in
the light most favorable to the nonmoving party,” Breen v. Dep’t
of Transp., 282 F.3d 839, 841 (D.C. Cir. 2002). The D.C.
Circuit, however, has yet to determine the standard governing
the review of District Court applications of judicial estoppel.
The Supreme Court has indicated that judicial estoppel “‘is an
equitable doctrine invoked by a court at its discretion,’” Maine,
532 U.S. at 750 (quoting Russell v. Rolfs, 893 F.2d 1033, 1037
(9th Cir. 1990) (internal quotation marks and citation omitted)),
and “[a] majority of [the] circuits that have addressed the issue
apply the abuse of discretion standard.” Stallings v. Hussmann
Corp., 447 F.3d 1041, 1046 (8th Cir. 2006); see also Alternative
Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 30-31 (1st
Cir. 2004) (citing In re Coastal Plains, 179 F.3d at 205;
Talavera v. Sch. Bd., 129 F.3d 1214, 1216 (11th Cir. 1997);
McNemar v. Disney Store, Inc., 91 F.3d 610, 616-17 (3d Cir.
1996); Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1565 (Fed.
Cir. 1996); United States v. Garcia, 37 F.3d 1359, 1367 (9th Cir.
1994)). But see Eubanks v. CBSK Fin. Group, 385 F.3d 894,
897 (6th Cir. 2004) (applying a de novo standard of review);
accord United States v. Hook, 195 F.3d 299, 305 (7th Cir. 1999).
We need not decide the question in this case. We find that,
whether reviewed de novo or pursuant to an abuse of discretion
14
standard, the District Court did not err in granting summary
judgment to Howard on grounds of judicial estoppel.
Furthermore, because “a federal court’s ability to protect
itself from manipulation should not depend upon the law of the
state under which some or all of the claims arise,” see Eastman
v. Union Pac. R.R. Co., 493 F.3d 1151, 1156 (10th Cir. 2007),
Moses’s pendent D.C. law claims, as well as his federal claims,
are subject to federal principles of judicial estoppel. See also
Ogden Martin Sys. v. Whiting Corp., 179 F.3d 523, 527 n.1 (7th
Cir. 1999); Rissetto v. Plumbers & Steamfitters Local 343, 94
F.3d 597, 602-04 (9th Cir. 1996); Edwards v. Aetna Life Ins.
Co., 690 F.2d 595, 598 n.4 (6th Cir. 1982); Allen v. Zurich Ins.
Co., 667 F.2d 1162, 1167 n.4 (4th Cir. 1982).
2. The District Court Did Not Err in Applying Judicial
Estoppel in This Case
Until 2001, with the issuance of the Supreme Court’s
decision in New Hampshire v. Maine, 532 U.S. at 742, judicial
estoppel was “disfavored” in the D.C. Circuit. So. Pac.
Transp. Co. v. ICC, 69 F.3d 583, 591 n.3 (D.C. Cir. 1995).
However, in Maine, the Court spoke approvingly of judicial
estoppel. The Court noted that judicial estoppel “‘prevents a
party from asserting a claim in a legal proceeding that is
inconsistent with a claim taken by that party in a previous
proceeding,’” Maine, 532 U.S. at 749 (quoting 18 MOORE’S
FEDERAL PRACTICE § 134.30 (3d ed. 2000)), and explained that
judicial estoppel is “‘an equitable doctrine invoked by a court at
its discretion,’” Maine, 532 U.S. at 750 (quoting Rolfs, 893 F.2d
at 1037). Since Maine, this court has recognized and applied the
doctrine as instructed by the Supreme Court. See Comcast
Corp., 600 F.3d at 647.
While “‘[t]he circumstances under which judicial estoppel
may appropriately be invoked are probably not reducible to any
general formulation of principle,’” Maine, 532 U.S. at 750
15
(quoting Zurich Ins. Co., 667 F.2d at 1166), we have explained
that “[c]ourts may invoke judicial estoppel ‘[w]here a party
assumes a certain position in a legal proceeding, . . . succeeds in
maintaining that position, . . . [and then,] simply because his
interests have changed, assume[s] a contrary position.’”
Comcast Corp., 600 F.3d at 647 (quoting Maine, 532 U.S. at
749). There are at least three questions that a court should
answer in deciding whether to apply judicial estoppel: (1) Is a
party’s later position clearly inconsistent with its earlier
position? (2) Has the party 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?
(3) Will the party seeking to assert an inconsistent position
derive an unfair advantage or impose an unfair detriment on the
opposing party if not estopped? See Maine, 532 U.S. at 750-51.
It appears that every circuit that has addressed the issue has
found that judicial estoppel is justified to bar a debtor from
pursuing a cause of action in district court where that debtor
deliberately fails to disclose the pending suit in a bankruptcy
case. See Eastman, 493 F.3d at 1157-60; Cannon-Stokes
v. Potter, 453 F.3d 446, 447-48 (7th Cir. 2006); Jethroe, 412
F.3d at 599-601; Barger v. City of Cartersville, 348 F.3d 1289,
1293-97 (11th Cir. 2003); Hamilton v. State Farm Fire & Cas.
Co., 270 F.3d 778, 782-85 (9th Cir. 2001); United States ex
rel. Gelbert v. Transp. Admin. Servs., 260 F.3d 909, 917-19 (8th
Cir. 2001); Payless Wholesale Distribs., Inc. v. Alberto Culver
(P.R.) Inc., 989 F.2d 570 (1st Cir. 1993); see also Eubanks, 385
F.3d at 898-99 (declining to apply judicial estoppel where
failure to disclose the claim to the bankruptcy court appeared
inadvertent).
We think it is clear from the Court’s discussion in Maine,
and at least implicit in the holdings of many of our sister
circuits, that a court may not invoke judicial estoppel against a
16
party (1) who has engaged in misconduct in a separate judicial
proceeding, (2) but there is no meaningful connection between
that proceeding and the judicial proceeding in which judicial
estoppel is sought. There must be a discernible connection
between the two proceedings. See, e.g., Cannon-Stokes, 453
F.3d at 447 (noting that the debtor “represented that she had no
[legal] claim[s] [before the bankruptcy court]; . . . [and] that
representation had prevailed; she had obtained a valuable benefit
in the discharge of her debts,” but “[n]ow she wants to assert the
opposite in order to win a second time”); Transp. Admin. Servs.,
260 F.3d at 918 (noting that the debtors “represented to the
bankruptcy court that they did not have any contingent claims”
and that they “stood to benefit from the inconsistent positions
put forward” because the new claim “was not theirs for purposes
of bankruptcy, but it was theirs for the purposes of a later . . .
action”); Hamilton, 270 F.3d at 784 (noting that the debtor
“failed to list his claims . . . as assets on his bankruptcy
schedules, and then later sued . . . on the same claims”)
(emphasis added); Payless Wholesale Distribs., 989 F.2d at 571
(The debtor, “having obtained judicial relief on the
representation that no claims existed, can not now resurrect them
and obtain relief on the opposite basis.”). In short, a court may
not invoke judicial estoppel against a party who has engaged in
misconduct in a separate proceeding if that proceeding is
unrelated to the current proceeding.
With this caveat, and taking into account the three
considerations addressed in Maine, we are satisfied that the
District Court did not err in applying judicial estoppel in this
case. First, Moses continued to hold himself out before the
District Court as a proper plaintiff, a position which was clearly
inconsistent with his pursuit of bankruptcy. The inconsistency
did not arise simply as a result of the fact that “neither [Moses]
nor [his] attorney ever listed the discrimination claim as an
asset” in his bankruptcy proceedings. Barger, 348 F.3d at 1295.
Rather, the inconsistency stems from the fact that Moses “had
17
already filed and was pursuing [his] employment discrimination
claim at the time [he] filed [his] bankruptcy petition[s].” Id. at
1294-95. He continued to pursue his initial discrimination claim
even though he was no longer a proper plaintiff once he sought
Chapter 7 bankruptcy.
Second, the bankruptcy court’s decision to initially
discharge Moses from Chapter 7, and the District Court’s
decision to allow this case to continue even during the pendency
of Moses’s bankruptcy proceedings, leaves little doubt that
Moses succeeded in hiding the inconsistency from the courts
and “creat[ing] the perception that either the first or the second
court was misled.” Maine, 532 U.S. at 750.
Third, Moses’s assertion that he did not derive any unfair
advantage because Howard “was not a creditor nor had any
interest in . . . [his] bankruptcies,” Appellant Br. at 19, is
misguided. In maintaining this suit without disclosing it in his
bankruptcy proceedings, Moses set up a situation in which he
could gain an advantage over his creditors. In other words, had
he prevailed in his lawsuit against Howard, he would have kept
any damages for solely himself, to the detriment of his creditors.
Moses’s inconsistent positions also adversely affected Howard.
Had the trustee known of this lawsuit during the Chapter 7
bankruptcy proceedings, she might have settled this case early
or decided not to pursue it, actions that might have benefitted
Howard.
Finally, it is clear here that Moses’s actions in the
bankruptcy proceedings and before the District Court were
related. Moses “represented that [he] had no [legal] claim[s]
[before the bankruptcy court] . . . [and] that representation had
prevailed; [he] had obtained a valuable benefit in the discharge
of [his] debts,” but “[n]ow [he] wants to assert the opposite in
order to win a second time.” Cannon-Stokes, 453 F.3d at 447.
Moses offended the integrity of the District Court by presenting
himself as a proper party in that court on the basis of a position
18
that was flatly inconsistent with the position taken in the
bankruptcy proceedings. Payless Wholesale Distribs., 989 F.2d
at 571.
Moses cannot avoid judicial estoppel by claiming that his
failure to disclose this lawsuit in the bankruptcy court or his
maintenance of the suit in District Court were the result of
“‘inadvertence or mistake.’” See Maine, 532 U.S. at 753
(quoting John S. Clark Co. v. Faggert & Frieden, P.C., 65 F.3d
26, 29 (4th Cir. 1995)). Moses failed to disclose the existence
of this case in two separate bankruptcy proceedings, yet in both
of those proceedings he listed pending lawsuits that, unlike the
instant case, reduced the overall value of his assets through
wage garnishment. See Moses III, slip. op. at 5 n.3 (citing Def.’s
Undisputed Facts ¶¶ 13, 19, J.A. 3, 4).
And Moses’s argument that he cured his failure to disclose
by reopening his Chapter 7 case, amending his “Statement of
Financial Affairs,” and inviting Nesse to intervene in the suit, is
wholly unpersuasive. As the Eleventh Circuit noted, allowing
such a debtor to “back-up, re-open the bankruptcy case, and
amend his bankruptcy filings, only after his omission has been
challenged by an adversary, suggests that a debtor should
consider disclosing potential assets only if he is caught
concealing them. This so-called remedy would only diminish
the necessary incentive” for the debtor “to provide the
bankruptcy court with a truthful disclosure of [his] assets,”
Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282, 1288 (11th Cir.
2002), and would similarly diminish the doctrine’s ability to
deter the debtor from pursuing claims in the District Court to
which he is not entitled. See also Eastman, 493 F.3d at 1160;
Barger, 348 F.3d at 1297; Krystal Cadillac-Oldsmobile GMC
Truck, Inc. v. Gen. Motors Corp., 337 F.3d 314, 321 (3d Cir.
2003).
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III. CONCLUSION
For the foregoing reasons, the judgment of the District
Court is affirmed.