Love v. Tyson Foods, Inc.

• Citation: 677 F.3d 258,114 Fair Empl.Prac.Cas. (BNA) 1189
• Decision Date: 12 April 2012
• Docket Number: No. 10–60106.,10–60106.
• Parties: Willie E. LOVE, Plaintiff–Appellant, v. TYSON FOODS, INC., Defendant–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

114 Fair Empl.Prac.Cas. (BNA) 1189

677 F.3d 258

Willie E. LOVE, Plaintiff–Appellant,

v.TYSON FOODS, INC., Defendant–Appellee.

No. 10–60106.

United States Court of Appeals, Fifth Circuit.

April 4, 2012.As Revised April 12, 2012.

Willie E. Love, Louisville, MS, pro se.

Walter James Brand, Sr. Atty., Robert B. Ireland, III, Watkins & Eager, P.L.L.C., Jackson, MS, for Defendant–Appellee.

Appeal from the United States District Court for the Southern District of Mississippi.

Before KING, WIENER, and HAYNES, Circuit Judges.

KING, Circuit Judge:

The district court granted summary judgment dismissing Willie E. Love's lawsuit against Tyson Foods, Inc. It held that Love was judicially estopped from bringing his claims against Tyson because he had failed to disclose them in his Chapter 13 bankruptcy proceeding. We AFFIRM.

I. FACTUAL AND PROCEDURAL BACKGROUND

Tyson Foods, Inc. (“Tyson”) hired Willie E. Love (“Love”) as a truck driver on July 23, 2007, but fired Love three days into his orientation after he disclosed that he had tested positive for drug use in 2001. Tyson cited safety concerns as the reason for dismissing Love. However, Love asserted that, because Tyson's employment application only required applicants to disclose positive drug tests within three years of applying for employment, Tyson had discriminated against him on the basis of his race by terminating him for drug use that occurred prior to the time frame listed in his employment application. Tyson subsequently rehired Love but required him to take monthly drug tests. Tyson terminated Love again on April 2, 2008, when Love tested positive for drug use. Love contended that an antibiotic he was taking caused a false positive result on the drug test, but Tyson declined to consider the results of any subsequent testing.

On May 30, 2008, Love filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”), asserting that Tyson subjected him to racial discrimination and that his second termination was in retaliation for his prior complaints of racial discrimination related to his first termination. The EEOC issued a notice of right to sue on December 16, 2008, and Love filed the present action on March 12, 2009. He asserted federal claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and under 42 U.S.C. § 1981, as well as a state-law claim for intentional infliction of emotional distress.

At the time Love filed both his EEOC charge and his complaint initiating the instant case, Love was a debtor in a Chapter 13 proceeding, having filed a petition for bankruptcy on May 1, 2008. “[T]he Bankruptcy Code and Rules impose upon bankruptcy debtors an express, affirmative duty to disclose all assets, including contingent and unliquidated claims.” Browning Mfg. v. Mims (In re Coastal Plains, Inc.), 179 F.3d 197, 207–08 (5th Cir.1999) (emphasis omitted) (citing 11 U.S.C. § 521(1)). “The obligation to disclose pending and unliquidated claims in bankruptcy proceedings is an ongoing one.” Jethroe v. Omnova Solutions, Inc., 412 F.3d 598, 600 (5th Cir.2005) (citation omitted). The disclosure requirement pertains to potential causes of action as well. See In re Coastal Plains, Inc., 179 F.3d at 208. Nonetheless, Love did not disclose his claims against Tyson and affirmatively stated “NONE” on Schedule B, item 21, which required the identification of “[o]ther contingent and unliquidated claims of every nature.” On September 22, 2008, the bankruptcy court confirmed Love's Chapter 13 plan, which did not mention the then-pending EEOC matter and provided that Love's unsecured creditors would receive no payment.

On July 16, 2009, Tyson moved for summary judgment, arguing that Love should be judicially estopped from pursuing his claims against Tyson because he failed to disclose those claims to the bankruptcy court. On July 22, 2009, Love filed an amended schedule in his bankruptcy case listing his claims against Tyson. On January 7, 2010, the district court granted Tyson's motion for summary judgment and dismissed Love's case. Love timely appealed.¹

II. DISCUSSION

A. The Doctrine of Judicial Estoppel

The doctrine of judicial estoppel is equitable in nature and can be invoked by a court to prevent a party from asserting a position in a legal proceeding that is inconsistent with a position taken in a previous proceeding. See Reed v. City of Arlington, 650 F.3d 571, 573–74 (5th Cir.2011) (en banc). The aim of the doctrine is to “protect the integrity of the judicial process.” New Hampshire v. Maine, 532 U.S. 742, 749–50, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001) (citation and internal quotation marks omitted). “Because the doctrine [of judicial estoppel] is intended to protect the judicial system, rather than the litigants, detrimental reliance by the opponent of the party against whom the doctrine is applied is not necessary.” In re Coastal Plains, Inc., 179 F.3d at 205 (citation omitted). Moreover, “ ‘the integrity of the bankruptcy system depends on full and honest disclosure by debtors of all of their assets.’ ” Id. at 208 (emphasis omitted) (quoting Rosenshein v. Kleban, 918 F.Supp. 98, 104 (S.D.N.Y.1996)).

In determining whether to apply judicial estoppel, we primarily look for the presence of the following criteria: “(1) the party against whom judicial estoppel is sought has asserted a legal position which is plainly inconsistent with a prior position; (2) a court accepted the prior position; and (3) the party did not act inadvertently.” Reed, 650 F.3d at 574 (citations omitted). However, judicial estoppel is not governed by “inflexible prerequisites or an exhaustive formula for determining [its] applicability,” and numerous considerations “may inform the doctrine's application in specific factual contexts.” New Hampshire, 532 U.S. at 751, 121 S.Ct. 1808. This court has noted that “[j]udicial estoppel is particularly appropriate where ... a party fails to disclose an asset to a bankruptcy court, but then pursues a claim in a separate tribunal based on that undisclosed asset.” Jethroe, 412 F.3d at 600.

B. Standard of Review

“We review a judicial estoppel determination for abuse of discretion.” Id. at 599–600; see also Kane v. Nat'l Union Fire Ins. Co., 535 F.3d 380, 384 (5th Cir.2008) (explaining that a district court's application of judicial estoppel is reviewed for abuse of discretion, even when the district court granted summary judgment on that basis). “[D]eference ... is the hallmark of abuse-of-discretion review.” Gen. Elec. Co. v. Joiner, 522 U.S. 136, 143, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997). Nonetheless, “[a] district court abuses its discretion if it: (1) relies on clearly erroneous factual findings; (2) relies on erroneous conclusions of law; or (3) misapplies the law to the facts.” McClure v. Ashcroft, 335 F.3d 404, 408 (5th Cir.2003). Whether a debtor's failure to disclose claims was inadvertent presents a question of fact. See Robinson v. Tyson Foods, Inc., 595 F.3d 1269, 1275 (11th Cir.2010); cf. Cont'l Cas. Co. v. McAllen Indep. Sch. Dist., 850 F.2d 1044, 1046 (5th Cir.1988). As discussed above, the district court granted summary judgment in Tyson's favor, finding that Love had made no effort to demonstrate inadvertence. Reversal of this finding is proper if we find that there is a genuine factual dispute regarding whether Love failed to disclose his claims inadvertently. See Fed. R. Civ. P. 56(a) (“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law .”); Buffalo Marine Servs. Inc. v. United States, 663 F.3d 750, 753 (5th Cir.2011) (“We review a grant of summary judgment de novo, applying the same standard as the district court.”).

C. There is No Fact Issue Regarding Love's Inadvertence

Love's sole argument on appeal is that his failure to disclose his claims was inadvertent. “[I]n considering judicial estoppel for bankruptcy cases, the debtor's failure to satisfy its statutory disclosure duty is ‘inadvertent’ only when, in general, the debtor either lacks knowledge of the undisclosed claims or has no motive for their concealment.” In re Coastal Plains, Inc., 179 F.3d at 210 (emphases omitted). Love concedes that he knew about the undisclosed claims against Tyson, but he argues that he had no motive to conceal his claims.

In its motion for summary judgment, Tyson set forth a motivation for Love to keep his claims concealed—the prospect that Love could keep any recovery for himself. As one court has stated, “the motivation sub-element is almost always met if a debtor fails to disclose a claim or possible claim to the bankruptcy court. Motivation in this context is self-evident because of potential financial benefit resulting from the nondisclosure.” Thompson v. Sanderson Farms, Inc., No. 3:04CV837–WHB–JCS, 2006 U.S. Dist. LEXIS 48409, at *12–13 (S.D.Miss. May 31, 2006) (citation omitted). Similarly, this court has found that debtors had a motivation to conceal where they stood to “reap a windfall had they been able to recover on the undisclosed claim without having disclosed it to the creditors.” Superior Crewboats, Inc. v. Primary P & I Underwriters (In re Superior Crewboats, Inc.), 374 F.3d 330, 336 (5th Cir.2004). After Tyson set out this motivation to conceal, it fell to Love to show that the omission of his claims from his schedule of assets was inadvertent. See Jethroe, 412 F.3d at 600–01.

In response to Tyson's motion for summary judgment, Love failed to set forth any argument or otherwise create a fact issue regarding whether he acted inadvertently. Love's five-page brief discussed only two of the three criteria that are central to this court's judicial estoppel analysis and conspicuously omitted any discussion of inadvertence. The response even failed to mention the words “inadvertent,” “motive,” or “intent,” or to suggest that inadvertence had any bearing on the...