Judicial estoppel bars employment-related lawsuit.

• Author: Sanders, Carol McHugh
• Position: US 11th Circuit Court of Appeals

In a case of first impression, the 11th Circuit held that judicial estoppel bars a man from pursuing an employment discrimination suit that he had not disclosed in his concurrent bankruptcy proceeding. Although ruling that the claimant's suit for monetary damages was barred, the court said he could go forward with his claims for injunctive relief in his employment case.

Levi A. Billups III, the plaintiff in Burnes v. Pemco Aeroplex Inc., 2002 WL 1011339, had filed a Chapter 13 bankruptcy petition in July 1997. Billups, who was represented by counsel in the bankruptcy proceeding, also completed a form listing his assets that specifically asked if he any had any contingent or unliquidated claims of any kind. He responded negatively. Six months later, he, along with 35 other individuals, filed a discrimination charge with the U.S. Equal Employment Opportunity Commission against his employer, Pemco Aeroplex. He did not amend his Chapter 13 schedule of assets to include his lawsuit against Pemco.

In October of 2000, Billups asked the bankruptcy court to convert his Chapter 13 petition into a Chapter 7 case. As part of that conversion, the court ordered Billups to update his financial schedules to reflect any changes since his initial filing. In financial schedules submitted under oath, he did not report the pending lawsuit against Pemco. In January 2001, he received a "no asset" complete discharge of his debts, which totaled more than $38,000.

The district court in the employment discrimination suit granted Pemco's motion for summary judgment on all of Billups's employment-related claims. The court held that the doctrine of judicial estoppel barred Billups from pursuing his claims against Pemco because he had failed to disclose the litigation to the bankruptcy court.

Partially affirming the summary judgment, the 11th Circuit noted that debtors have a duty to disclose fully their financial affairs under the bankruptcy laws so that all assets or potential assets are known for the benefit of creditors. The purpose of the judicial estoppel doctrine is to protect the integrity of the judicial process by preventing parties from playing fast and loose with court filings. Thus, Pemco did not have to demonstrate prejudice from plaintiff's omission of the lawsuit information to succeed on its judicial estoppel defense.

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